To Gouge Or Not To Gouge?

Nov 4 2012 @ 6:16pm

Reason checks in on the New York area gasoline shortage:

Like Perry and Zwolinkski, Matt Yglesias advocates price gouging:

[W]hen it comes to things like gasoline and bottled water, neither the short-term nor the long-term supplies are genuinely fixed. Transportation routes into the area have been severely disrupted and many gas stations' supplies are hard to access due to power outages, but it's not impossible to transport this fuel from where it is into people's cars and generators. It's just much more annoying and difficult than usual. But the possibility of windfall profits is exactly the lure we need to get people to start making extraordinary efforts to get more fuel to the people who need it. There are things people will do to sell gasoline for $10 a gallon that they won't do to sell gasoline for $3.40 a gallon (note that in Norway this is what gas costs all the time) and that's what we need.

He follows up here. Alec Liu disagrees with Matt:

[T]rying to milk victims of a natural disaster in need is an asshole move. Which undermines the sense of togetherness we need during times of human tragedy. Trying to make a few extra bucks off your neighbor kills the good vibes we’re all collectively trying to harness. There are also risks to planting the seeds of ill will during a crisis. The art of price gouging is by no means scientific. A wily businessman could have great success raising prices 300 percent. Another entrepreneur in another neighborhood might incite a riot with an increase of only 30 percent. Who knows?