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Ashish's Niti

Niti in Sanskrit means policy/strategy/vision. This blog hosts my political views, along with news and commentary. This blog has moved here.

Wednesday, August 18, 2004

Natural disasters and price-gouging

CafeHayek has a good post explaining that "price-gouging" is nothing but reflection of reality of lower supply and higher demand. Catallarchy points out fallacy of accusing merchants with the 'G' Word.

Mises's blog also points out the stupidity of controlling prices. The post has some very interesting Test Questions on the issue of "price gouging".

If certain goods are in demand after natural disaster strikes how can one expect to increase their supply by forcing lower prices?

In the comments section to Roderick Long's blogpost on Liberty & Power (mentioned above by Gil), Mark Fulwiler writes:

If you charge less than the competition, you are guilty of "unfair competition." If you charge the same as the competition, that's "collusion." If you charge more than the competition, or more than the government thinks is "fair," that's "price gouging"!

I believe the above quote is from Ayn Rand's "Capitalism: The Unknown Ideal."

I forgot where I read a letter to the editor saying something to this effect:

As long as needs of some are considered as a moral claim on others property there will be no freedom.

Common Knowledge praises price-gouging and correctly points out that criminalizing price-gouging serve to eliminate an option for people in need. Only an idiot will think that this helps the people in need.

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