Chennai floods: markets working or failing?

Chennai floods has again exposed India’s growing urbanisation woes. It is a time bomb which keeps exploding once a while. There has been a lot of positive news about who people have rallied to help each other. This is where humanity triumphs over everything else. No amount of government organisation or funds can supersede the collective might and spirits of people. And not just Chennai but people have responded from all corners of the country. Though, the government could have avoided part propaganda  during this time. It was a very very inhumane thing to do at this hour. How mall thisuch time must have been wasted in all this branding?

Given this, there was some news over certain markets in the city. There was scarcity all around and as economics teaches you, prices should rise. This is what happened. Airline prices zoomed,  prices of essential commodities and milk jumped manifold. This is not new to Chennai. It happens all the time in any crisis. In all this rallying and support for humanity, the market forces still take over and create its own issues.

These are the days and times when philosophers find issues with relying on markets for all allocation decisions. They just don’t look good at all. Likes of Michael Sandel will use such cases to show why replying on markets is problematic. But then market supporters might argue that all this was eventually due to huge government intervention over the years. If markets were allowed to function, then all this random construction and lake filling might have never happened. So markets came back with a venom to show what happens when you do not allow them to function.

How should we think about markets in case of crisis like these? They do what they are expected to do but face a lot of flak from people..


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