Free lunches leave a bad taste

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The Richmond Times-Dispatch reports (with great pictures):

Chaos erupted this morning at the Richmond International Raceway as thousands of people stampeded through the gates in a rush to buy used iBook laptop computers for $50 each.

This reminds me why poorly-targeted subsidies are such a terrible idea: the rent-seeking activity (queuing, lobbying) can waste the entire subsidy, or more if people miscalculate. In this case there was only one person hospitalized, but people have died in such giveaways (for instance, at Ikea in Jeddah in the summer of 2004). Those who want to find out a bit more can read my Financial Times op-ed on the subject.

Update: Alex Tabarrok at Marginal Revolution has the Econ 101 diagram for your edification. Second update: And more discussion - what if the poorest are the ones who queue? The short answer: it doesn't help much.

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