Price gouging is good! Misguided criticism of price
gouging follows earthquakes in California, as it follows Hurricanes Florida,
and floods in the Midwest.
Price gouging provides extra money for suppliers to buy
larger shipments of necessities and pay added costs for urgent delivery and
extra employees under crisis conditions. Wholesalers and distributors
quickly reroute supplies to disaster areas where increased demand covers the
added costs and permits a greater profit. To defeat price gouging further
hurts those who are already hurting.
Price gouging is great! Higher prices cause people in
non-damaged areas to delay purchases of building materials, freeing the material
up for sale in disaster areas. Protests of price gouging are made by
the same people who whine about bare shelves in non-gouging stores. Price
gouging is how free market pricing restrains buyers who would rush into non-gouging
stores before or during a crisis and leave nothing but anchovies (but at the
non-gouged price, of course).
All goods are private property and sellers can charge
whatever they wish or not sell at all. Anti-gouging laws cause sellers
not to reroute items to disaster areas and to delay selling near disaster
areas. People who support anti-gouging laws are ignorant statists who
cut their own throats (and others').
Price-gougers should be praised. Sellers who do
not gouge prices do not do themselves or consumers any favors. They
encourage hoarding and lessen their ability to increase replenishments.
Any Libertarian or Objectivist will point out that anti-gouging
laws achieve the opposite of what was intended. Eastern Europe, the former
Soviet Union, China and other socialist economies demonstrate that government
attempts to suppress prices causes greater shortages and suffering.
The laws of supply and demand do not change by popular edict.
Mandating price gouging would make more sense than banning
it, though no law at all is best. The "correct" price for all goods
at all times is the highest price anyone will pay. That is how Capitalism
creates abundance and prosperity. Price gouging is beneficial.
