As I record this episode in late March 2020, the world is living through the Coronavirus crisis. Recently my wife and I were discussing the toilet paper shortage. I explained that the reason there isn't any toilet paper now is because the stores did not raise the price when they saw a surge in demand. She argued that price gouging during a crisis is wrong and immoral. I tried to explain why it is actually a good thing. Full disclosure: She was not convinced. Hopefully you will be after listening.
We discuss some basic economic concepts like: What is a price and how do they fluctuate. Then we dive into the topic at hand - price gouging. This is followed by an examination of pandering politicians and price controls and the morality of price gouging. We wrap up the episode discussing the benefits of price gouging and whether or not these arguments hold up when a crisis is regional versus worldwide.
Bob Murphy - Hurricane Sandy and Gas Lines
Walter E. Williams – Hillsdale College Speech
Tom Woods Episode #987 - Price Gouging is Urgently Necessary
Words & Numbers Podcast - Price-Gouging Bans Don't Make Things Cheaper, They Make Them More Scarce.
Basic Economics, Thomas Sowell
- Anti-gouging Laws are the Reason There is a Toilet Paper Shortage
- 3 Good Things about “Price Gouging
- Price Gouging: A Life-Saving Market Mechanism
- Greedy Capitalists Take Advantage of People in Natural Disasters
- Texas Price Gougers are Hurricane Heroes