Economics Crimes

by Russ Roberts on August 19, 2008

in Prices

It is a crime to profit from helping others. (HT: Bill Eilberg) Much better to keep the price low and reduce the incentive for people to help. True, there will be less help. But no crimes. Phew.

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{ 6 comments }

LoneSnark August 19, 2008 at 4:31 pm

Would it improve outcomes if non-residents flooded the call center with reports of price gouging by city and state officials?

Unit August 19, 2008 at 8:00 pm

Don needs to write a letter to the editor of Naples Daily News…..

Ronald Hayden August 20, 2008 at 3:09 am

Given how this gives people the power to tattle as a form of general retribution, and given how any price at all can be called gouging in an emergency, were I a vendor in this region, I think I'd just close up shop and wait it out.

Depriving people of needed goods is terrible, but being put at the mercy of any scold or person with a grudge may be untenable.

I assume if enough vendors take this approach, the government reaction will be (if it isn't already) to force you to sell goods, and at a "reasonable" or, more likely, set price.

Doug August 20, 2008 at 8:32 am

I think the definition of price gouging should be to transact business at above the market clearing price.

It should also be a crime to sell below the market clearing price – this has a very negative effect on human well being as has been pointed out in earlier EconTalk podcasts.

Hammer August 20, 2008 at 11:01 am

I am waiting for the government to decree that charging any price during an emergency is illegal, and the cost of doing business in an area will be voluntarily rationing free goods to those who show up to ask.

It is obviously the next logical step, since there is apparently a moral issue with profiting when people need something, whether they could have bought it the day before or not. Of course, the next step is to apply the rule to private citizens, not only public stores, so having bought supplies the day before only means you will be forced to give them away to those who didn't plan ahead the day of an emergency.

I_am_a_lead_pencil August 21, 2008 at 8:33 am

Ronald Hayden said:

I assume if enough vendors take this approach, the government reaction will be (if it isn't already) to force you to sell goods, and at a "reasonable" or, more likely, set price.

Either that or they will set up FEMA "stores" to sell all "needed" merchandise.

The US DOE is on the case as well.

At least there is a clear way to determine who the offenders are.

So far, there are allot of complaints and some are under "suspicion."

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