Buffalo News 1 News Plaza Buffalo, New York 14203
On Tuesday, the News reported on those who exploited the record snowfall for their own selfish purposes. Contrary to the gist of the article, however, it is not private snow-removal contractors, but politicians, who are doing the exploiting. The politicians — those who have run the City of Buffalo so well that most people want to merge it out of existence — claim that the contractors were "price-gouging" senior citizens who needed their driveways plowed out. Such a claim reveals their ignorance of basic economics.
This was the most concentrated snowfall in Buffalo history. The demand for rapid snow removal was the highest ever. Therefore, the supply of available contractors was unable to meet the demand all at once. Competition among consumers then drove up the price, and those who most urgently needed snow removal paid the steep prices, while those who could afford to wait a day or two were able to pay less. The free market worked beautifully. In contrast, on my North Buffalo street, I saw one municipal snow plow and no garbage trucks in the last week. On the South Buffalo street where my parents live, I struggled to drive down the publicly-plowed street, but had no problem pulling into the privately plowed driveway.
It is amazing that in the 21st century, people still favor price controls. Price controls always and everywhere create shortages and lines and reduce the incentive for people to invest in the capital and equipment needed to supply goods and services. They reduce competition by reducing anticipated profit margins. The article points out that contractors came from Rochester. This is a good thing. The market does that — it spontaneously reacts to meet consumer demand. Why didn’t the City get plows from Rochester? And finally, why should we take advice on economics from politicians who have ruined our once vibrant local economy?
January 5, 2001
James Ostrowski is an attorney practicing at 984 Ellicott Square, Buffalo, New York 14203; (716) 854-1440; FAX 853-1303. See his website at http://jimostrowski.com.