by Matt Barr

Carnival of Liberty XXII

Carnival of Liberty XXII is up at Below the Beltway. Among the entries this week, SpeckBlog takes on the fallacy of "price gouging."

There is no such thing as price gouging. If you think you’re the victim of price gouging, you’re not. Sure, it hurts when prices go up. It’s supposed to. What that pain is telling you is that the resource you want is in much greater demand relative to its supply and therefore you need to conserve. Since you have a finite supply of resources with which to meet your needs this forces a reshuffle of priorities. In some cases you’ll forgo some less important needs and in others you’ll forgo the need you sought to meet with the resource that rose in price or meet it less fully.

I agree. You have a different situation when a service provider agrees to provde a service for a certain price but raises that price as to certain individuals -- take the example of a man with a snowplow who charges $20 to plow snow from a driveway but raises his price to $20,000 when Mr. calls frantically for a plow because Mrs. just had a heart attack and has to get to the hospital but the ambulance can't use the driveway. Some principles are the same -- the market is what someone is willing to pay at the time of the transaction -- but there is a moral and just argument against that kind of pricing. But the justice argument against price gouging laws Marty Speck gives us is right on.

Rick Sincere posts about a George Will column this week with a shocking premise: "libertarian conservatives can have a genuine, positive effect on government by reining in its size and scope." Will cites Virginia Postrel's treatment of statists vs. dynamists, and he, and Sincere, conclude that we need more dynamists in public office. Boy, do we.

Finally, Different River asks, Will the FDA kill Brian White?

This is not like people who die waiting for organ transplants, or people who die waiting for a treatment to be invented. These people are dying waiting for a signature on a piece of paper.

Why is this? In 1962, Congress passed the Kefauver-Harris Amendments, which changed the Federal Food, Drug, and Cosmetic Act to prohibit the sale of any drug that had not been determined by the FDA to be "safe and effective." The law didn't say how the FDA was to determine that, so the FDA prescribed a long, complex, and expensive process that companies must go through before the FDA approved their drugs. Prior to 1962, the requirement was the that the FDA find the drug "safe" – and furthermore, the FDA has 180 days to act on a drug application, after which, if it was not unsafe, it could be sold. The 1962 amendments removed the 180-day limit, added the "effective" requirement, and set the stage for thousands of people to die while the FDA spends years processing each new drug application. The FDA’s own history of itself calls this, "a milestone advance in medical history."

One can only ask what kind of a "milestone" this is when applied to a treatment for a fatal disease for which no other treatment is available.

As always, only a sample. Head over to the Carnival to read more.

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economics Virginia+Postrel dynamism FDA drug+approval