Tag Archives: Price Gouging

Natural Disaster Relief Efforts

As I would have expected, the cult of altruism has yet again created an immoral situation out of a moral one. On September 20th of 2017, Hurricane Maria made landfall on the island of Puerto Rico and created a humanitarian crisis for its population. Thus, the Puerto Rican people were thrust into a state of emergency. What is an emergency? As I’ve said before, “an emergency is an unchosen, unexpected event, limited in time that creates conditions under which human survival is impossible. In an emergency situation, men’s primary goal is to combat the disaster, escape the danger, and restore normal conditions.” Since man is not omnipotent and cannot control the weather, or even predict natural disasters sufficiently far in advance, the devastation caused by this hurricane was clearly an emergency for the island of Puerto Rico.

The Puerto Rico Electric Power Authority (PREPA) responded by quickly entering into a $300 million contract with a company called Whitefish to repair their island’s energy grid. Whitefish charged 2-3 times the normal rate for repair efforts in the contract, but their company website boasts their ability to mobilize quickly and work in challenging situations. PREPA’s decision makers were on the island and in the emergency themselves, and no amount of money could outweigh the value they put on their own lives. Thus, it was entirely moral for PREPA to have agreed to the contract with Whitefish, since they believed Whitefish had the ability to restore their conditions to normal. In fact, it would have been irrational and immoral for them to have entered a contract simply because it was less costly in dollars, as it would provide fewer resources and incentive for help to come quickly and effectively.

As a Montana-based startup, Whitefish has no apparent personal ties to the people of Puerto Rico. Therefore, the majority of Puerto Ricans can be assumed to be strangers to Whitefish’s decision-makers, and therefore fairly low in their value hierarchy. In any typical situation, it would have been immoral for Whitefish to risk sacrificing their company’s welfare (since PREPA was bankrupt, and the contract itself was risky) and their employee’s lives for Puerto Rico. However, this was a special situation. Puerto Rico in a state of emergency, as I proved above. Additionally, Whitefish’s website boasted that the company was particularly quick and skilled in challenging conditions, and therefore reasonably equipped to help Puerto Rico. Since Whitefish had the ability to help, and Puerto Rico’s situation was an emergency, it was moral for Whitefish to risk sacrifice in this scenario. Yet, Whitefish acted even more rationally than expected by charging higher prices to help compensate for the risks that they were taking. This was specifically Whitefish’s reasoning behind their prices, as explained by their spokesman to the public, and so this is not simply an assumption, but a matter of fact.

However, the evils of altruism couldn’t simply let the virtue of selfishness restore Puerto Rico in a timely and rational manner. Public and political outrage over the higher prices agreed upon in the contract began to influence PREPA away from their initially moral behavior. This outrage was fixated on Whitefish, accusing the company of “price gouging” in an emergency situation. But, if the extra money had not incentivized Whitefish’s contractors to work in these extreme, life-threatening conditions, help would not have come so quickly or effectively to Puerto Rico. Is money actually valued higher than the safety of one’s life? I think not, with the exception of the “altruist” perspective.

A month after Maria hit, PREPA’s CEO caved to altruist pressure and cancelled the deal with Whitefish, explaining that he was “making this determination because it is in the best interest of the people of Puerto Rico.” Due to public criticism for the increased costs that Whitefish was charging, PREPA “unselfishly” ceased construction on the island’s main transmission line that desperately needed repair. Payments were delayed, along with the restoration of power to the island of Puerto Rico. Still, Whitefish retained their morality by making the decision to leave the island when they did not receive the payments that they felt would outweigh the risks they were taking with their own lives. It never ceases to amaze me how irrational the altruistic public can be: without their intervention, fellow human beings would have been willingly and ably saved from this emergency situation. If only the public had not prompted PREPA to question their decision to enter the contract, the situation would have remained moral and rational. I’d love to sincerely ask some of the authors of these articles: how much does a dollar cost, when your life is at risk?

https://www.nytimes.com/2017/10/29/us/whitefish-cancel-puerto-rico.html

https://www.nytimes.com/2017/11/12/us/whitefish-energy-holdings-prepa-hurricane-recovery-corruption-hurricane-recovery-in-puerto-rico.html

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