Wednesday, June 13, 2012
The Ethics of Price Gouging
Price gouging is a highly politicized economic occurrence that happens when the demand for a particular product rises dramatically. One of the reasons price gouging is so controversial, is because of it's initial negative effects on consumers. For example, following Hurricane Katrina, the price of gas, water, ice, and other necessities was hiked to accommodate the increased demand for these items. This brought up an ethical question for many people. How can you charge someone who just lost everything they own $12 for a bag of ice or $30 for a clean shirt? On a less dramatic scale, many argue that gas prices these days are unnecessarily and unfairly high. But supply and demand are in equilibrium for these items. Suppliers can't control these factors, they can only adjust prices accordingly. Is it wrong for businesses to not want to go bankrupt by failing to keep up with these changes? Or is it their responsibility to make sure people are able to buy the things they need to survive at a "fair" price? If not suppliers, who gets to determine what that price is?
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About Me
- jpgreenapple
- Gastonia, North Carolina, United States
- Hi! My name is Haley and I'm a junior studying Political Science and International Business at Montana State University. I grew up in Savannah, GA and will be leaving in September for a year study abroad in England. I am obsessed with The Beatles (hence my domain) and also really enjoy the TV show Mad Men. In my free time, I love to go hiking and camping and just hang out with friends and family. Some fun facts about me: I am terrified of birds and refuse to eat anything blue.
The government because they control standing armies. Lol, beyond that: the economist would say there is no such thing as price gouging and that hikes ensure there are no shortages...and if there are they are short lived. Me, I think economist do not take into the account the violent side of marginal social benefit. That is where everyone is waiting for gas, the prices skyrocket. Then people decide that money is useless for trade because they do not have enough of it. So...someone throws a rock and a riot is in progress. Then the supplies flow to those how are willing to fight for it hardest rather than sacrifice the most cash resources for it. Currency becomes blood and bullets, still those that are most willing to sacrifice for the resources get it. The supply is exhausted and the market will calm as it adjusts to dealing without that resource. In this I argue against the economist: that there should be a price ceiling.
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