It’s not necessarily clear that disaster relief is better handled by the government. A few things to keep in mind:
It’s not a choice between markets or government. You can have both. (e.g: The army and rescue services organizing huge logistics efforts to resupply effected regions/clear roads. At the same time supermarkets are allowed to sell goods at inflated prices, incentivizing them to store a surplus in future cases where disasters may happen as they can make a profit large enough to offset the cost of keeping excess stock in inventory.)
The same incentive problems that apply to gov’s generally also apply here. A shop owner, assuming price gouging is allowed, is incentivized to keep a small surplus of disaster items in stock even though they won’t sell in normal times because of the small chance of an extraordinary profit if a disaster strikes. The government, even thought it should ideally keep track of and prepare for disasters, often won’t due to it being in no individual’s interests to do so. e.g: Lack of food stockpiling in New Orleans prior to Katrina.
It’s not necessarily clear that disaster relief is better handled by the government. A few things to keep in mind:
It’s not a choice between markets or government. You can have both. (e.g: The army and rescue services organizing huge logistics efforts to resupply effected regions/clear roads. At the same time supermarkets are allowed to sell goods at inflated prices, incentivizing them to store a surplus in future cases where disasters may happen as they can make a profit large enough to offset the cost of keeping excess stock in inventory.)
The same incentive problems that apply to gov’s generally also apply here. A shop owner, assuming price gouging is allowed, is incentivized to keep a small surplus of disaster items in stock even though they won’t sell in normal times because of the small chance of an extraordinary profit if a disaster strikes. The government, even thought it should ideally keep track of and prepare for disasters, often won’t due to it being in no individual’s interests to do so. e.g: Lack of food stockpiling in New Orleans prior to Katrina.