Are anti-price gouging laws good or bad? During an emergency or crisis, the demand for goods suddenly skyrockets. Examples could be hand-sanitizer and masks during a disease pandemic, or water
Are anti-price gouging laws good or bad? During an emergency or crisis, the demand for goods suddenly skyrockets. Examples could be hand-sanitizer and masks during a disease pandemic, or water bottles, toilet paper, food, generators, and batteries during a hurricane. This would drive the price up for these goods in a free market, but many governments intervene and pass laws to forbid such price increases.
A benefit of an anti-price gouging law is lower, more affordable prices for goods during a crisis, at least for those who can buy them in time. This would help some people, especially the poor, who buy the goods in time before they run out. Some believe that these laws help protect the consumers from greedy suppliers who would otherwise “gouge” consumers with high prices.
On the other hand, according to economic science, the main disadvantage of anti-price gouging laws is that they create shortages by two separate mechanisms: 1. increasing quantity demanded, and 2. reducing quantity supplied. A typical visual example of this is empty grocery store shelves. The higher free market price will tend to allocate the goods according to who wants/needs them most, conserving and spreading out the distribution of goods. But, anti-price gouging laws tend to allocate such goods on a first come, first serve basis, by whoever is lucky or fast enough to get to the store first, and allow the first takers to buy and hog all the goods, leaving none for others who arrive at the store later.
So, do the benefits of such laws outweigh the costs?
And, regardless of practical benefits, are such laws morally permissible or unjust?
I’ll give a presentation on some arguments about this topic. After the presentation, we’ll all chat about it over beers.
This event is a part of a recurring monthly open and public event at this location. The point is to have thought-provoking discussions about themes in political philosophy, economic science, political ethics, and sometimes history. It will not be about annoying petty day-to-day politics, but instead about fundamental principles, usually of political philosophy and economics. It seems to me a good tradition to talk of such matters over beers. There’s something beautiful about it. So, come and join us.
(Thursday) 7:00 pm - 9:00 pm
Growler Haus Village of W Gvl
12 Lois Ave