- Price gouging is sometimes less than optimally moral and efficient.
- The status as immoral or inefficient depends in part on the degree of gouging.
- It should be legal anyway.
Common sense pro my position:
- Price gouging is probably not bad if the recipient is happy after all
- If they aren’t happy you may be a dick, and dick moves are generally not morally optimal
- All things in moderation, goldilocks usually in middle: optimal is prob between perf gouging and charity
- Argument from coercion
- If alternative is buy or die, coercion is being conducted.
- Smaller degrees of harm also count as coercion.
- Some people think coercion is morally suboptimal and/or inefficient
- Although personally I don’t necessarily think that’s the case.
- Argument from charitable utility
- My personal favorite argument against price gouging.
- It could be that (omg no way) giving a starving guy food for free is morally optimal and/or efficient.
- Some non-heartless people actually get utility from such things as helping others
- Argument from religion
- What is the best thing to do in a price gouging situation? First, realize that “best” is a moral or normative term and requires a justified moral framework to answer in a rigorous way.
- Divine command theory (or divine will theory) is perhaps the best moral framework.
- If certain religions are your moral standard then gouging is immoral.
- Usury is considered immoral in Christianity, and while usury is technically a lending consideration, there is a general moral principle along the same lines which is don’t take advantage of the weak or needy.
- However, foregoing earnings or being irresponsible with wealth is also condemned in the Parable of Talents in the New Testament. So it’s not clear that perfect charity is ideal either.
- Argument from empathetic guilt and/or subjective value
- Personally I would feel guilty charging $10k for a gallon of water to a guy dying of thirst.
- If my conscience is a guide to the morally optimal choice then charging as much as possible is not the “best” thing to do.
- If value is truly subjective, then that is not the efficient thing to do either.
- Also, guilt itself is a reduction in utility, so charging less would be better inclusive of charitable utility. Morally and in terms of utilitarian and economic efficiency.
Rebuttle of pro opposition arguments:
- Incentives argument is true, but perfect gouging not needed for these incentives; only partial gouging
- Going to hell is a solid incentive as well
- Efficiency is not a clear moral standard. Divine command or will theories are better.
- Not that clearly efficiency is clearly immoral either. It seems morally neutral. That is not a way to determine which choice is best.
- Efficiency depends on perceived or anticipated costs and benefits, not accidental ones.
- Accidental earnings are shocks which cause calculation issues and actually inhibit efficiency.
- If you intentionally aid a disaster area though, that is different.
- So gouging in a shock scenario is opportunistic and unnecessary, not efficient, but planned “gouging” is the natural working of the market when demand rises.
- However, planned gouging presupposes available information which will likely lead to competition among suppliers, dampening the severity of any price increase.
- Shock scenarios of spiked demand with limited supply prevents proper competition from dampening the severity of price increases. In effect, an opportunistic gouger can act as a monopolist, which is neither efficient nor morally optimal.
Why should it be legal anyway?
- Efficiency: Calculation problem. What degree is optimal? Government is a bad calculator.
- Moral: Laws should be based on a moral truth. The moral status here is variable, not certain.
- Pragmatic: Laws in general should be minimized. If we aren’t sure of a law, don’t have it.
- Slippery slope: give government an inch and they will take a mile. don’t empower them.