Price gouging...fair or unfair?

Price gouging. It was the obvious hot topic in this week’s class. An issue like price gouging is always going to be debatable, mainly because it is something that will arise compassion in some people, and realism in others. Before writing this blog, I started off by trying to do a little research. Even typing “price gouging” into Google returned some extremely varied results. A “Price Gouging Saves Lives” link is below a link to report price gouging to police. I wanted to figure out where I stood on this issue.

According to thefreedictionary.com, price gouging is pricing above the market price when no alternative retailer is available. I learned that here in Florida, price gouging is illegal, "It is illegal to charge unconscionable prices for goods or services following a declared state of emergency." Again, subjective words such as “unconscionable” really get under my skin in economics. Do you think any form of extortion and/or profit making really haunts MOST business owners’ consciences at the end of the day when they open the register? I didn’t think so either…but that was sort of a side tangent of mine, sorry readers….Moving on, as a part of my research I watched the John Stossel video on price gouging. I found it very interesting and he makes a good argument. Within the video, it had the story of a man who bought generators during Katrina and drove to Mississippi to sell them to families and people who needed them desperately, only he wanted twice what he had paid for them. Although people were excited about the generators and willing to pay, the man was thrown into jail and the generators confiscated.

This honestly disturbed me. I’m not saying the man was a hero, but to throw him in jail and confiscate the generators for evidence and deprive the desperate people of them downright stinks. But after watching that video and researching, I’m still not a 100% convinced either way. No, I don’t think it is exactly fair to charge $20 dollars for a bottle of water after a natural disaster, but I’d rather buy that bottle for $20 and have water, rather than go to the store and have every single pack of bottled water be sold out because people could afford to stock up for the next year. Yet, I know it is easy for myself and these Nobel-winning economists to sit back in our lovely houses with all the necessities in life and say “yeah sure price-gouging is great!” The realistic side of me says that in theory, price gouging makes sense, but my heart tells me if I was in a natural disaster or someone close to me was, I wouldn’t be so quick to jump on the price gouging bandwagon… Tell me what you think!