Bans on price gouging

[DGuller]

Yi brought up a point in the coronavirus thread about price gouging, and how crackdowns on price gouging can lead to shelves unnecessarily emptying out.  Let's start a rational discussion about the pros and cons of banning price gouging during a situation like this, and whether banning the practice helps or hurts in the aggregate. 

What does Languish think?  Are these bans necessary for the proper functioning of society, or do they just lead to the further breakdown of supply chains during a crisis?

[The Brain]

Define price gouging.

[DGuller]

Define price gouging.

There is a probably a tedious legal and economic definition, but let's just say that you know it when you see it.  Selling soap for $1.50 instead of $0.99 is not it, selling it for $5 is.

[Barrister]

Count me on the "it's not price gouging, its the free market at work" side of things.

[Grey Fox]

and Yi argues that capitalism isn't about screwing someone over.

[DGuller]

Count me on the "it's not price gouging, its the free market at work" side of things.

I think most people will concede that free market as a general concept leads to better social outcomes in steady state (though they may debate about how often market failures happen and what to do about them).  However, is it still reasonable to assume that this holds in a situation where panic can feed upon itself, and where people either individually or collectively can become highly irrational?  Honest question, I don't know the answer, or whether this has been studied professionally.

[Habbaku]

and Yi argues that capitalism isn't about screwing someone over.

You have not made a convincing case that a single person buying up thousands of bottles of hand sanitizer at $0.99/each during a crisis is a good thing. How is that not screwing people over?

[DGuller]

and Yi argues that capitalism isn't about screwing someone over.

You have not made a convincing case that a single person buying up thousands of bottles of hand sanitizer at $0.99/each during a crisis is a good thing. How is that not screwing people over?

I think many people do not realize that cornering the market is actually an anti-free-market activity.  Free market doesn't mean that anything goes, is still requires the government to enforce certain laws to prevent anti-competitive practices.

[Grey Fox]

and Yi argues that capitalism isn't about screwing someone over.

You have not made a convincing case that a single person buying up thousands of bottles of hand sanitizer at $0.99/each during a crisis is a good thing. How is that not screwing people over?

Oh, it is too. It's all Capitalism.

[Iormlund]

Count me on the "it's not price gouging, its the free market at work" side of things.

In a state of emergency the free market is hardly free.

I can't choose to go to the cheaper supermarket at the other side of town.

[Josquius]

The free market is like fire.
Necessary to keep you warm.
But it needs to be properly controlled and harnessed

[DGuller]

But it needs to be properly controlled and harassed

[Tonitrus]

The free market is like fire.
Necessary to keep you warm.
But it needs to be properly controlled and harassed

Fire is rather simplistic.

"The free market is like a fission reactor..."

[The Brain]

But it needs to be properly controlled and harassed

Hare-assed, ie sexy.

[grumbler]

Count me on the "it's not price gouging, its the free market at work" side of things.

The "free market" is a theoretical concept that does not exist in the real world.  It is the economic equivalent of "perfect vacuum" or "free will;" useful for studying theory, but not the basis for an appeal in the practical reality.