Generator Rental as Free-Market Disaster Relief

In an emergency like a natural disaster, the primary impact of the storm is certainly deadly, but the secondary effects like loss of power and damaged infrastructure can sometimes be even more destructive. After a disaster like Hurricane Sandy, hundreds of thousands of people could be left without power. The loss of power does not simply deprive individual businesses and households of a luxury; it cripples the economy's ability to function properly. In our world, everything requires electricity, and the complex distribution of goods and services breaks down without it.

For this reason, there is a dramatic increase in the demand for generators that can function in the wake of a disaster; however, most businesses fail to prepare ahead of time or do not have the funds to do so, and thus the supply of generators is not adequate to the post-disaster demand. This leads to a shortage of generators, which will inevitably lead to higher prices. Oftentimes, these generators are unaffordable to all but a few.

Generator rental can be a good solution to the difficulty. Rentals provide businesses with incentive to transport generators from unaffected areas, but it does not force the people affected to purchase something that they will likely only need for a few days. There is a free market harmony of interest in this situation: entrepreneurs discover the most efficient way to transport these generators, businesses make a profit, and those affected by disaster have power. Society can slowly return to normality.

Rentals are perhaps one of the most overlooked solutions with regards to disaster relief. Many politicians focus on either FEMA or price ceilings as methods for dealing with catastrophic events--yet, FEMA can be augmented by free-market cooperation. Furthermore, price ceilings lead to fair distribution of goods but discourage the free-market allocation of generators from unaffected areas to the affected. Generator rentals provide a better alternative than price gouging, but a more efficient one than simple price ceilings. In short, disaster relief demands that there be more generators than normal, but there must be sufficient incentive to get them there. These incentives cannot come at the expense of the affected and generator rental provides this solution.