Hurricane Price Gouging Is Despicable, Right? Not to Some Economists
Meanwhile, he suggested, “You discourage conservation of needed goods at exactly the time they are in high demand.”
He added, “In a classic case of unintended consequences, the law harms the very people whom lawmakers intend to help.”
The result, he contended in a paper titled “The Ethics of Price Gouging,” is
that allowing higher prices “increases the available supply — as a result of consumers’ economizing behavior, more hotel rooms are available to individuals and families who need them most.”
Of course, these arguments may make sense in the most theoretical context,
but when it comes to trying to protect the poorest among us, who can’t afford the most basic of goods, they seem like an inhumane affront to our sensibilities.
“If the store doesn’t raise prices, attentive customers may buy up the whole stock,
resell it during the emergency and price gouge themselves,” he wrote last week.
“Price caps discourage extraordinary supply efforts
that would help bring goods in high demand into the affected area,” Michael Giberson, an instructor with the Center for Energy Commerce in the Rawls College of Business at Texas Tech University, wrote in an opinion piece from several years ago that was widely circulated around parts of Wall Street this weekend.
But the fact remains that there is a gaping hole in the price-gouging-is-good argument: how to make resources “available to poor individuals
and families, many of whom may barely be able to afford normal prices,” said Joe Carter, a senior editor at the Acton Institute, a right-wing think tank.
They also say that the incentive for suppliers to bring goods to dangerous areas — or keep
extra stock on-hand before disasters — becomes distorted in ways that hurt people.
