Is Price Gouging good or bad?
We read a short story called “Justice” by Michael Sandel about how many firms increased the prices of necessities when hurricane charley swept across florida.
What is price gouging?
Brian: First of all, what exactly is price gouging?
Price gouging is a term that refers to a situation in which a seller raises the prices of a good or commodity at a level much higher than is considered reasonable or fair. This rapid increase in prices occurs after a demand or supply shock, usually caused by natural disasters. Different groups of people in the community have different ideas on whether or not price gouging is “moral”. Today we will be talking about weather or not Price gouging should be made illegal or legal and if it is “moral” or “immoral”. I believe that to figure out whether or not price gouging should be made illegal or not, we have to look at the pros and cons of each situation as well as looking at the different ways of knowing (emotion, language, perception and reason). Today our group will be focusing on reasoning, by doing so we can look at weather or not our arguments are valid or invalid and thus attempt to draw a conclusion to this controversial topic.
Gabby: For or against Price gouging?
Economists believe in the idea of price gouging because what most people call price gouging is, to them, simply an example of the laws of supply and demand working as they should and rarely has anything to do with suppliers taking advantage of consumers. Example- if a hurricane destroys oil platforms in Mexico, then the supply of oil decreases. If a businessman owns a gas station in Atlanta which gets most of its supply from those platforms, then this means that he might not be able to resupply his stock of gasoline once he sells it. The only logical thing for him to do is to increase the price of the gasoline. If this price is $6.00, then so be it. Is he attacking consumers by taking this action? I don’t believe so, and if he were to leave the price unchanged his gas supply would run out quickly and he would have to close down. If a consumer is willing to pay a certain price, then the consumer is not being gouged. If the consumer is not willing, then he can look for a substitute or do without.
However, many others will argue that morally- it is wrong to take advantage of another’s pain for one’s own gain, as it is believed to be greedy and selfish. A society in which people exploit their neighbors for financial gain in times of crisis is considered to not be a good society. Let’s say a person who was left with nothing after a crisis comes to a motel and cannot afford to stay because the price has been raised. Is there any way to justify turning them away? Or maybe they can afford to stay in the motel, even with the raised prices, but then they can’t afford any food? There is no way to justify the preventable deaths of people in a crisis. In a normal situation, prices being raised is an annoyance at best, a serious issue at worst. In a crisis like a hurricane or other disasters, however, you cannot look at it from a viewpoint of economics. If you do, people’s lives are put at risks, which is unacceptable. Denying a refugee food or water or shelter because they cannot afford it is just as bad as killing them yourself.
Julian: Is there a right or wrong answer?
There are really 2 perspectives we can look at this problem from- the “economics” point of view or the view where we prioritize consumer wishes. Economics associates with the laws of supply and demand. The regulation of prices help to ensure that goods go where they are most valued, therefore preventing the wasting of resources. However, if we look at this problem through the consumers point of view, this is seen as unfair and unjust. Many would argue that it is wrong to take advantage of another’s pain for one’s own gain.
Louise: In our opinion, price gouging can be painful, and it doesn’t always allow people to obtain the products they desperately need. However, if price gouging is made illegal, goods would be more accessible to people in need. Price gouging occurs simply because the people who sell the goods are taking the opportunity given to them, to make more money.