We received a letter from Jim Wells, truffle expert extraordinaire and, for a long time, owner of Oregon Wild Edibles. He has contributed to the Pundit before:
Jim read our piece on the water situation — Water: What Does It Mean To Have A Shortage Of Something That Sells For Less Than A Penny A Gallon? Can We Secure Farmer’s Rights To Ground And River Water? Why Raising Price Is Better Than Restricting Usage — and had this to say:
Water: If water costs more, the wealthier will get a greater percentage of it. In other words, get wealthy or get thirsty. How classically twisted Randian can one get?
We will leave aside the critique of Ayn Rand for another day and simply point out that she has sold over 26 million books and that in a Library of Congress survey, her magnum opus, Atlas Shrugged, was ranked as the most influential book in respondents’ lives after the Bible and that her vision of man has inspired many:
“In creating her novels, Rand sought to make real her exalted view of man and of life — “like a beacon,” she wrote, “raised over the dark crossroads of the world, saying ‘This is possible.’” For millions of readers, the experience of entering Rand’s universe proves unforgettable.”
For now, though, we will stick to water and simply point out that keeping the price on something low both discourages new sources of supply and conservation efforts.
This is why we don’t put price controls on food, but instead give out food stamps.
If we want to help poor people get food, water, clothing, shelter, etc., putting price controls will result in artificial shortages, so the thing to do is let prices rise to market levels, then give out aid sufficient to ensure the poor can live at the standard we consider acceptable.
But artificially depressing prices distorts markets in ways not helpful to anyone, including the poor.
Many thanks to Jim Wells for weighing in on this important question.