Politicians are famously befuddled by the dismal science. But even those who were econ majors before law school get stupid in a hurry when enraged voters jam switchboards to report gas rip-offs and scamming pump jockeys.
It seems nobody loves a gouger, especially in times of crisis. Elected officials try to calm the angry mob by offering investigations, hearings, and “tough questions” for uncomfortable-looking oil company executives in suits. The outcome of these hearings doesn’t matter to them, but if a circus is what the voters want, a circus is what they’ll get.
John Stossel exposes their hypocrisy and praises gougers:
Consider this scenario: You are thirsty — worried that your baby is going to become dehydrated. You find a store that’s open, and the storeowner thinks it’s immoral to take advantage of your distress, so he won’t charge you a dime more than he charged last week. But you can’t buy water from him. It’s sold out.
You continue on your quest, and finally find that dreaded monster, the price gouger. He offers a bottle of water that cost $1 last week at an "outrageous" price — say $20. You pay it to survive the disaster.
You resent the price gouger. But if he hadn’t demanded $20, he’d have been out of water. It was the price gouger’s "exploitation" that saved your child.
In Gouging? No Such Thing, Iain Murray takes a different approach, arguing that gouging does not even exist. He also describes what happens when anti-gouging laws appear:
Rather than "gouging" members of the public, gas station owners are actually helping them by raising prices. This may seem counter-intuitive, but we have to consider how supply, demand and price interact. Normally, supply and demand dictate price, as is the case when gas prices spike. When price, however, is fixed, as would be the case if an "anti-gouging" law was in effect, then demand will outstrip the supply available. Shortage is the inevitable result. Gas would be rationed in some way, whether it is by some arbitrary legal fiat or by long lines at the pump. A black market is also more likely.
Read both articles if you have time – they’re excellent.