Snyder, Jeremy (2009) - What's the Matter with Price Gouging.pdf

Snyder, Jeremy (2009) - What's the Matter with Price Gouging.pdf

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What's the Matter with Price Gouging? Jeremy Snyder ABSTRACT: When prices for basic commodities increase following a disaster, these price increases are often condemned as 'price gouging.' In this paper, I discuss what moral wrongs, if any, are most reasonably ascribed to accusations of price gouging. This discus- sion keeps in mind both practical and moral defenses of price increase following disasters. I first examine existing anti-gouging legislation for commonalities in their definitions of gouging and then present arguments in favor of the permissibility of gouging, focusing on the economic benefits of price increases following disasters. I argue that gouging takes the form of a specific failure of respect for persons by undercutting equitable access to essential goods. While I discuss anti-gouging legislation throughout this paper, my aim is to give an account of the moral wrongs associated with gouging rather than guidance for developing morally defensible anti-gouging legislation. P RICES FOR ESSENTIAL GOODS are likely to increase when a disaster strikes, should that event decrease available supplies of these goods, increase demand, or both.' Sometimes these price increases are condemned as 'price goug- ing' or 'profiteering.' Such labels are not intended as simply descriptions of price increases; rather, they carry a strong negative moral valence. In many cases, the moral wrong of these price increases is identified as wrongfully gaining from another's misfortune. Consider the common view that "[t]hings like selling generators for four and five times their cost is not free enterprise, that's taking advantage of other people's misery" (Rushing 2004, A-1). In other cases, price gouging is condemned as unfairly taking advantage of others' needs, language that is often associated with exploitation.^ But it isn't clear from these kinds of sentiments when a price increase amounts to price gouging or why, if at all, certain price increases following disasters are mor- ally worrisome. Moreover, there are many reasons to think that price increases can create a net benefit for a community following a disaster. As one critic of anti-price gouging legislation puts it: Price to the left of the intersection of the supply-and-demand curve and you are guaranteed to vaporize whatever you are attempting to keep inexpensive .... The reason that gasoline is disappearing from service stations across the nation is because station owners aren't gouging with sufficient gusto. Whether out of a misguided sense of kindness, concem about what politicians might think, fear of bad press, or the desire to keep customers happy, they are pricing below what the market would otherwise bear and, as a result, their inventory has disappeared. Now, how are the poor being helped by service stations closing down for lack of fuel? Gas at $6 a gallon, after all, is better than gas unavailable at any price. (Taylor 2005) ©2009 Business Ethics Quarterly 19:2 (April 2009); ISSN 1052-150X pp. 275-293
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276 BUSINESS ETHICS QUARTERLY
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