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IPFS News Link • Price Gouging

Repeal Anti-Gouging Laws

• https://www.fff.org, by Jacob G. Hornberger

Anti-gouging laws prohibit sellers of certain important items from significantly raising their prices in emergency conditions. The goal is to help people in the affected area to be able to purchase essential items at reasonable prices.

As with so many other governmental interventions into economic activity, anti-gouging laws only make the situation worse.

During hurricanes and other natural disasters, there are items that are in scarce supply. That's just the way it is. There is nothing public officials can do to increase that supply.

Thus, the question becomes: How should those particular items be allocated? There are only two ways: One is by governmental decree and the other is through the price system.

Let's say that there are 100 bags of ice in the affected area. Before the hurricane, they were selling for $10 a bag. Suddenly the hurricane hits and people are clamoring for ice.


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