Snow chains, huh? Guess I’m not familiar with them, except for like farm tractors and pickups. Does Oregon not have plows?

But honestly, when I think of price-gouging I think back to 9/11/01. I was in Oklahoma and people were freaking out at the gas pumps. I’m talking about pandemonium. Some of the retailers decided this was a good opportunity to hike up gas prices. The state severely punished these retailers with hefty fines. So I guess in my mind gouging sounds bad. Even the word “gouge” seems to have a negative connotation. It reminds me of “eye-gouging”.

Yeah, I’m with you, GoogleBot/Darius.

I’m a big proponent of the free market. I don’t want government interfering by passing anti-gouging laws. But I do believe Jesus was serious when he commands us to feed the hungry, clothe the naked, and tend to the sick. We are commanded to help those in need. That’s not optional for a Christian.

In Colin’s specific situation, I’d say that the shopkeeper should have recognized the limited supply of snow chains. He should have sold them only to those with a real need.

The gouging I think of was after Hurricane Katrina and a bunch of hotels doubled their prices for the people who were without homes… Disgusting, but I’m not sure what (if anything) government should do about it.

It’s not disgusting Darius. It’s essential to make a shortage of space be used economically. Hotels keeping their prices low has the same effect as rent controls - inefficient use of space in an emergency.

So take a shortage of water. Raise the price of water to $15 a gallon. Most people can still afford this, and will prioritize their budgets to account for water. For the rare person who still can’t afford this, the shopkeep should “buy the product for them” - and essentially pay the difference in the price.

But honestly, when I think of price-gouging I think back to 9/11/01. I was in Oklahoma and people were freaking out at the gas pumps. I’m talking about pandemonium. Some of the retailers decided this was a good opportunity to hike up gas prices.

Chris, I remember this as well. But we have to take out the “profiteering motives” for a moment and look at it rationally. After 9/11, we all were convinced there was a likely gas shortage on the way. Demand goes up in such a situation and the price has to go up to ensure that everyone can still get gas. Gas companies that hedge against possible shortages are only being wise - and are doing us a great service, even if it seems “evil” in the short run.

Yeah, I see what you’re saying. But in Oklahoma it wasn’t a case of gas companies forecasting possible shortages, it was individual gas stations and convenience stores that were hiking up prices. It wasn’t widespread gouging. It was just in certain places. Maybe they didn’t have bad motives, but I’m just saying when I think of gouging that’s what comes to mind. Their actions may not have been evil, and I’m not accusing them of that, its just that the idea of price-gouging triggers the memory of that day.

Market cost of a good DOES increase during an emergency or panic though. If the price does not increase or some kind of rationing takes place, all that will happen is that the product will become unavailable. Gasoline will run out, tire chains will be sold out, hotel rooms will be under utilized (one person per room instead of 4), and goods will be used inefficiently. That said, I do not believe that a seller has a moral obligation to sell their goods efficiently. A seller who would rather sell at a low cost to “preserve good will with ignorant customers”, they have the right to do so. The gas station has the RIGHT to value the “first comer” over the “highest bidder” if they choose to do so.

Chris Austere wrote:
Yeah, I see what you’re saying. But in Oklahoma it wasn’t a case of gas companies forecasting possible shortages, it was individual gas stations and convenience stores that were hiking up prices.

When demand goes up, you raise prices or run out of supply. The gas stations that raised prices did so assuming that if they didn’t they’d run out of gas. The ones that kept prices the same assumed the panic would not cause them to run out of gas. Any intelligent buyer would have bought gas at the lower price, and not been gouged. Only when less expensive gas was unavailable would an intelligent buyer pay inflated costs. It is not the sellers responsibility to ensure that their buyers are not idiots.

I agree.

Exactly, Colin. I agree. That seems like the only reasonable solution to me. If we try to solve the problem through anti-gouging legislation, we just end up with the situation you found yourself in.

Colin said:
So while I think business on the ground can make better command-type decisions than a government, I think the market will still deliver the best and fairest distribution.

The problem is, of course, when someone cannot afford an essential service. Even you admitted to such conditions above with your acknowledgment that sometimes a charitable store owner should buy the product FOR the needy person without ability to purchase it. The market does not maximize efficiency, a fully knowledgeable command economy maximizes efficiency. It is because all the data CANNOT be obtained in the general case that a market based system wins over a command economy for large economies. In the case of an emergency, inefficiencies can readily be introduced based on panic (not a rational recognition of need) and varied resources.

Example: the rich man can buy water at $5,000 a cup, which the poor man cannot afford. I know that we have barely enough water to keep everyone alive until more water comes, so I will override the panic induced attempt by the rich man to buy all the water to hoard for his own use. In this limited case, it is possible for an individual to know enough about the conditions to effectively run a command economy.

The biggest problems of a command economy have never been theoretical, but that it cannot scale. Finding charitable commanders and enough information to make all interrelated decisions is what makes it inefficient. In an emergency, if enough information is available it can be more efficient to simply command the economy rather than wait for the information to infiltrate the minds of all buyers and then wait again for them to come to rational decisions based on market pressures. By the time my hypothetical rich man learns that more water really was coming, several of the poor men may already have died of thirst. With most of the normal variables removed due to the emergency, a command economy becomes workable. (Though it still requires high information and intelligence to be effective.)

I’m sure I must be missing something. Those who were fleeing the storm were charged double what other customers were charged??