One More Thought on "Price Gouging"
Blogging on post-hurricane price-gouging is quite the rage these days. My friends, and in the first case, former professor, Don Boudreaux at Cafe Hayek and Glen Whitman at Agoraphilia said most of what I'd say. However, I do want to make one more point. I find it interesting that most of the charges of "gouging" involve those who sell material goods, such as lumber or shingles or generators. Both Boudreaux and Whitman only give examples involving physical goods.
What you almost never hear are any complaints about gouging when the very same sorts of supply and demand considerations raise the wages of carpenters, carpet-layers, lumberjacks, etc.. Evidently, it's okay for sellers of labor services to benefit from emergency conditions of supply and demand, but not people who sell material goods. That observation then leads me to wonder why the difference. Certainly, the belief that "people like us" are the direct beneficiaries of higher wages while higher prices for "stuff" is seen to mean profits for nameless, faceless corporations might explain a lot of it. (Of course the profits to those firms means higher incomes for owners, who include "people like us" directly for small businesses and indirectly for stockholders and those with stock-driven retirement funds.) Perhaps there is something about the directness per se that leads folks to be more sympathetic and not see higher wages as "price gouging." It may also be that individuals are just more sympathetic than institutions in general.
It would be interesting indeed to see some attorneys general start proceedings against carpenters who start earning twice their normal wage in the wake of a hurricane. I'm not holding my breath.
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David Vyron Youngberg - 8/20/2004
Steve, I could talk about this via e-mail but since you havn't e-mailed me back (thank you guilt trip), I'll have to take some time from writing for lawlegislationandlunacy.blogspot.com (thank you shameless plug) and add a comment.
You make an interesting point-people better identify with the working man making more money. But I agure that people don't even think about that. I'm convinced that the public thinks of wages as a completely separete entity from the rest of economic activity, as if a few hunderd people collective own this Vault of Wealth that's inifintely large and salaries slowly trickle from it to the People (which is why when the People try to take it, the outcome is always worse; the Vault is a fantasy). That's why Kerry's miniumum wage increase proposal is so popular...he's forcing the Rich to open the Vault a little more.
Ok, so the lack of faith I'm putting in the American people is rather insulting, but it has some truth to it. People tend to think wages as a completely different expense. If, perhaps, we would remind them that it's just another cost and the construction workers will be paid more because they are working longer hours, perhaps so-called price gouging would be more tolerated.