Editors at Issues and Insights examine misguided political attacks against so-called price gouging during emergency conditions.
Government officials waste no time threatening to crack down on “price gouging” during catastrophic events. Because they care. But of course they don’t. If they did, they’d let the market take care of pricing. Instead, they’ll deny storm victims the necessities they need to get through the disaster.
Vice President Kamala Harris has warned merchants and entrepreneurs that Big Brother Columbia is “monitoring” stricken areas “for allegations of fraud and price gouging and will hold those taking advantage of the situation accountable.” Federal Trade Commission Chair Lina M. Khan says “no American should have to worry about paying grossly inflated prices when fleeing a hurricane,” and promises that “in partnership with state enforcers, the FTC will keep fighting to ensure that Americans can get the relief they need without being ripped off by bad actors exploiting a crisis.”
Their rhetoric is meant to reassure. They are proud of themselves. And quite willing to claim scalps, even if means victims are unable to obtain the goods they desperately need. …
… Yes, it might seem on the surface that jacking up prices during an emergency is unethical. Yet it can be the best way to deal with a crisis. High prices not only discourage hoarders, they also send suppliers an important signal: They need to rush more goods into production and increase their shipments into the disaster zone. It’s basic economics. Buyers might grumble about the costs, but at least they can get what they need. …
… “High prices are an essential way to ensure that resources get where they are desperately needed. Imposing artificially low prices creates shortages of vital supplies and makes it harder for people to recover from disasters.” — Don Boudreaux
