News & Politics

Price-Gouging Profiteers in the Age of the Coronavirus

Kirkland Fire and Rescue ambulance workers walk back to a vehicle after a patient was loaded into an ambulance, Tuesday, March 10, 2020, at the Life Care Center in Kirkland, Wash., near Seattle. The nursing home is at the center of the outbreak of the new coronavirus in Washington state. (AP Photo/Ted S. Warren)

It’s inevitable in a crisis where some vitally needed commodities are in short supply that there will be those who seek to profit from the misery of others by playing on people’s desperation to charge exorbitant amounts of money at an astronomical mark-up.

Thus has it always been and thus it will always be. Where most see tragedy, others see opportunity. There were the brothers in Tennessee who hoarded 17,000 bottles of hand sanitizer, hoping to sell them online for a huge profit. Amazon flagged the sale and authorities considered charging the men with price gouging. They ended up donating the bulk of their stockpile to local churches.

Now, out of Texas, comes the story of an auction website offering 750,000 medical-grade masks, as well as other products associated with the COVID-19 outbreak. If you’re an auction winner, you could receive a package of 16 masks for $170. The masks normally sell for $3 each.

Caveat emptor and carpe diem, baby.

Bloomberg:

The week-long bidding that ended Tuesday was hosted by the website Auctions Unlimited. The health-related products pulled in $154,000 in sales, according to Houston-based website owner Tim Worstell. He estimated that he personally made as much as $40,000 on the sales.

Worstell would not publicly divulge the names of the buyers, and he identified the sellers only as “large companies.” He said the companies commissioned his website to sell masks, disinfectant wipes, cleaning solutions and hand sanitizer, all items in high demand as coronavirus spreads. Because the Texas attorney general issued a cease-and-desist order on March 20 to block the sales during a state of emergency, which was declared March 16 by Governor Greg Abbott, Worstell said the transactions couldn’t be completed without approval from law enforcement.

If permission is withheld, Worstell said he’ll re-auction the items starting at $1 as soon as the state of emergency is lifted. He said he’d already turned over the names of the sellers to Houston law enforcement and the state Attorney General.

States are scrambling to buy enough supplies to meet the ever-growing demand of hospitals and emergency workers for masks, gowns, ventilators, and other critical items that are growing scarcer and scarcer. For some, like Mr. Worstell, the opportunity is just too good to pass up. Where he got 750,000 medical masks when hospitals and governments around the world are scrounging for them, he hasn’t said. Probably some other profiteer who let the masks go to Worstell for a big mark-up.

Socialists will point to this incident as an example of why capitalism is evil. I’ve got news for them: it’s worse in socialist countries. When the Chernobyl nuclear accident occurred in 1986, the entire region was inundated with price-gouging profiteers selling everything from bottled water to “cures” for radiation sickness. They were willing to risk death from the state security apparatus to improve their lives. These people were already desperate and miserable because of their day-to-day living conditions. The tragedy gave them an opportunity that, ordinarily, would never have presented itself.

It is what it is. And what is, will always be.