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Let Gougers Gouge?

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11/6/2012 3:26:51 PM
Posted: 7 years ago
From Wikipedia:

Price gouging is a pejorative term referring to a situation in which a seller prices goods or commodities much higher than is considered reasonable or fair. This rapid increase in prices occurs after a demand or supply shock: examples include price increases after hurricanes or other natural disasters. In precise, legal usage, it is the name of a crime that applies in some of the United States during civil emergencies. In less precise usage, it can refer either to prices obtained by practices inconsistent with a competitive free market, or to windfall profits. In the Soviet Union, it was simply included under the single definition of speculation.

Note that price gouging is illegal in 31 states.

Many people believe that price gouging is a good thing and it should not be legal. Here is Art Carden:

Laws against price gouging create shortages. In the aftermath of a disaster like Hurricane Sandy, people want a lot more gasoline, flashlights, bread, and water at any given price. For sellers, costs have risen. It may come as a surprise to some commentators, but gas station owners and other sellers of disaster relief supplies probably have their own shattered lives to attend to. A high price offers them an inducement to go into the market and provide disaster relief supplies instead of closing up shop. Higher prices are also like signal flares that attract entry from suppliers outside the affected market.

Note that you can see Art Carden explain more on John Stossel here

What do you think of price control and gouging?
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