In North Carolina Hurricane Sandy took out significant chunks of coastal highways making them impassable. There is a route around the damaged areas of highway, but it goes over sandy and rough terrain not navigable by vehicles without four-wheel drive and/or low clearances.
In response, enterprising locals have created a service for “sand taxis” which load smaller vehicles onto trailers to that they can be towed through the damaged areas. For around $25, someone will load your car onto a trailer (perhaps with you and your family inside) and tow it over the rough areas of road.
“A good example of the invisible hand at work,” writes Professor Mark Perry. “At least until the local government shuts down the “sand taxis” for: a) price gouging, or b) operating a taxi/transport service without the proper “permission slip”/license from the government.”
If the government does do that they’ll say they are protecting the consumers. From what? Apparently from services they need at prices they can afford.
But isn’t it interesting how services like this, based on mutually-beneficial transactions, crop up without any need for direction from some government planning committee or disaster response team?
From Hayek’s Freedom and the Economic System:
[W]e can plan a system in which individual initiative is given the widest possible scope and the best opportunity to bring about effective coordination of individual effort. Or we can ‘plan’ in the sense that the concrete action of the different individuals, the part each person is to play in the social process of production — what he is to do and how he is to do it — is decided by the planning agency… The planning of the planners of our time… involves the idea that some body of people, in the last instance some individual mind, decides for the people what they have to do at each moment.
Things work best when individuals, whatever the circumstance, are allowed to plan and choose for themselves.