Mayank Gandhi & Shrey Shah
My mother told me in panic, “Shrey, hand sanitizer bottle is finished, please go and get a new one from Velji bhai. His shop might be open. What will we do without sanitizers?” Avoiding marauding policemen, I entered Veljibhai’s shop from the back (he was closed from the road-facing side).
But now let us consider what happens in extra-ordinary situations like the one Veljibhai and I were in. With supply remaining the same (you cannot simply wave a magic wand and hope for increase in production) the demand has now increased. (Instead of purchasing just 1 bottle, I asked for 12) Thus, as indicated in the graph below (1.b), an increase in demand (from D1 to D2) with supply remaining the same changes the point of equilibrium. This change in equilibrium naturally leads to increase in price of the product. Thus, what Veljibhai was doing could have been not an immoral act. He could have been just following Economics which informed us that this increase in price of the commodity was a natural by-product of free-market (where demand and supply interacted without any other influence) economics.
- . Freedom- What exactly is the meaning of freedom? If there are buyers who are willing to purchase at a given price, should the freedom of sellers be curtailed and they be asked to sell at a cost decided by the society at large? If so are we really respecting individual freedom? From Immanuel Kant to John Rawls, almost all modern philosophers have argued that a just society is one where individuals respect each other’s freedom and give them the option to live their own concept of good life.
- Greed- However, what is more important, is it the freedom of buyers and sellers or preventing greedy businesses from resorting to unjust price discrimination for earning profit? The anger of the society at such increase in prices is not against profit maximization but it is an anger against profit maximization at the time of crisis.
- Virtue and Vice- Both the above point is fundamentally a conflict not only between Ethics and Economics but between Vice and Virtue. The conflict before us has and maybe will always be, what is virtue through the eyes of one individual is a vice for few others. Therefore, this conundrum between respecting freewill of buyers and sellers v.s earning profit at the expense of others during crisis is a never ending one.