Why Price Gouging Laws Are a Bad Idea

What politicians call "gouging" is just supply and demand. Prices rise and fall all the time.


"We don't have any…!" Fill in the blank.

People are stocking up on things, fearing that we will be stuck in our homes, under quarantine, without essential supplies.

Some hoard toilet paper. A popular internet video features someone driving up to what appears to be a drug dealer but is really someone selling toilet paper.

When it became hard to find hand sanitizer in New York, Governor Andrew Cuomo said the state would produce its own, made by prison labor.

Yet in-demand items like masks and hand sanitizer can still be found. It's just that we have to pay an inflated price.

People on social media are outraged by that. They post pictures showing stores charging high prices, like $19.99 for a can of Lysol spray and $22.99 for a 12 oz bottle of Purell.

We're encouraged to report such high prices to the government because "gouging" is illegal. New York has an online "price gouging complaint form" that people can fill out if they are charged "unconscionably high prices."

"On my watch, we will not tolerate schemes or frauds designed to turn large profits by exploiting people's health concerns," said New York's economically clueless Attorney General Letitia James. "Some people are looking to prey on others' anxiety and line their own pockets."

Well, yes.

People always look for ways to line their own pockets.

But what politicians call "gouging" is just supply and demand. Prices rise and fall all the time.

Most state's anti-gouging laws never even say exactly what is "unconscionably excessive." That invites abuse. Vague laws give politicians dangerous power. They can use anti-gouging law to punish any merchant who doesn't give them money or kiss their rings.

It seems cruel to charge customers more during a crisis, but when there are no laws against sharp price increases, people don't experience long lines and shortages.

Think about what happens when stores don't raise their prices: People rush to buy all they can get. The store sells out. Only the first customers get what they want.

But if the store charges more for items in extraordinary demand, people are less likely to hoard. Customers buy what we need and leave some for others.

Prices should rise during emergencies. That's because prices aren't just money; they are signals, information. They tell suppliers what their customers want most.

Entrepreneurs then make more of them and work hard to get them to the people who need them most. If "anti-gouging" laws don't crush these incentives, prices quickly fall to normal levels.

Stossel in the Classroom contest winners explained that in a video.

Last week, some people bought lots of hand sanitizers and masks and then sold them on the internet. One couple boasted that they made over $100,000 reselling Lysol wipes.

They're not bad people. Their actions allow people desperate for supplies to buy what they need, even if it's at a higher price.

We're supposed to stay indoors, so it's good that we can get these products online. Then we don't leave home and infect others.

Unfortunately, Amazon, eBay, and Facebook, worried about accusations of "profiteering," cracked down on resellers. The companies removed listings for masks, hand sanitizers, and disinfectants.

This will only cause more shortages. Bigger profit was what encouraged people to sell online. Now no one gets those products until the market returns to normal.

In China, there was a severe mask shortage. That raised the price of masks and kickstarted production of face masks all around the world. A factory in France hired more people and raised its production of face masks from 170 million a year to half a billion.

The French company didn't do it only because they want to help people in China. Extra profit motivated them.

Price "gouging" saves lives. In a crisis, we like to think that everyone will volunteer and be altruistic. But it's not realistic to believe that all will.

If we want more supplies, we ask sellers to risk their money, their safety, and comfort. (Sellers often travel long distances to reach people most in need.) Most sellers won't do that unless they'll profit.

Government should dump its anti-price gouging laws and let the free market help those in need.


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  1. Amazon and eBay restricting sales of needed items is a sign of the world gone mad.

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  2. The BP up the road is at 1.98 per gallon. Consumers are gouging the fuck out of the gas companies in these days of oversupply.

  3. The whole world went crazy... Try to relax yourslef with Sex Noord Holland and forget troubles

  4. I'm sure people that can't afford the basic necessities will be delighted by how the free market works instead. Certainly can't miss.

    1. Better we should all go without.

      1. because there is absolutely no in between, either you price gouge or you go without.

    2. "I’m sure people that can’t afford the basic necessities will be delighted by how the free market works instead. Certainly can’t miss."

      Yeah, imagine all those Venezuelans thrilled with their low-price access to, oh, toilet paper!
      If you're posting here to prove how stupid a lefty can be, you're doing great!

    3. I’m sure people that can afford the basic necessities but can't find any of them on the shelves will be delighted by how socialistic price controls work. Certainly can’t miss.

    4. If they can't afford basic necessities, does it matter if there's "price gouging" or not? What if the "price gouger" used some of his ill-gotten gains to help those who can't afford basic necessities?

      So predictable and dull, bud

    5. Heaven forbid you word that as, "People who didn't earn other peoples stuff shouldn't think they can just TAKE it."

      No, in today's commie world, the buzz-phrase "poor" is used as a criminals right to STEAL and is completely de-associated from the factors of EARNING.

  5. Until you can get leftists, and even some right-leaning moderates, to understand this, these articles are just preaching to the choir, and unfortunately, you will never get that to happen as the left collectively (of course) are completely resistant to trying to understand the power of free markets.

    1. Nothing like the power of a well hewed club and the skill to wield it.

      That safety in numbers you collectively rely on won’t last when you screw others over with price gouging.

      1. "That safety in numbers you collectively rely on won’t last when you screw others over with price gouging."

        So we add econ-stupidity to general stupidity and scumbag bigotry; quite a rep you got there, you pathetic piece of shit.

  6. I have been trying to explain this to others. It is hard.

    I am at least grateful that my local grocer stocks the expensive organic stuff that I never bought until now
    . Now it is correctly priced and available.

    1. At the local grocer's, all the cheap bread was gone ... ended up getting a $5 loaf of "Artisan".

      DAMN, but that stuff was good.

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  8. What a load of crap

    amateur price gougers serve no market purpose
    they are buying goods otherwise available and marking them up

    anti gouging laws prevent them from being strung up by their thumbs

    1. B.S. - When you see Mr. Wealthy walking out of the store with the entire stock BECAUSE $1.50/gal milk is all the store can charge and your left with NOTHING-AT-ALL but $50 in your pocket because you insisted that Mr. Wealthy get all the milk he can as CHEAP as possible - please come back and tell us how that worked out for you...

      Are you really so stupid as to think a price of $22/gal isn't going to cause Mr. Wealthy to hesitate a little before 1000-jugs for $22K? Then you can still get your milk you need for the $22 Supply and Demand pricing.

    2. What prevents you and the rest of your Useful Idiot cadre from being strung up by your thumbs?

    3. "anti gouging laws prevent them from being strung up by their thumbs"

      What a steaming pile of bullshit from an econ-ignoramus. Fuck off, slaver.

      1. If you cannot afford food I guess you are willing to just starve, amirite?

        1. As-if there was any shortage of welfare in this country. Stop spending all your money on brain deadening recreational drugs!

  9. Yes it is supply and demand, and it’s uncivilized and wrong.

    1. Everything is so terrible and unfair!

      1. In civilization, laws prevent that.

        Luckily you can hide behind the collectivism you decry.

        1. "In civilization, laws prevent that."

          Pathetic pile of shit here confuses 'civilization' with mob-rule, but he's certainly not smart enough to figure it out.
          And I won't help hom.

    2. "Nature is uncivilized and wrong", cries the lefties, "Kiss your freedom goodbye because [WE] must steal and dictate to eradicate life of any and all natural rewards and consequences."

      March.3.2020 at 3:11 pm

      Equality without the qualifier as “equal in rights” or “equal before the law” is either an ignorant or (more likely the case among educated liberals) malicious obfuscation of the idea of equality.

      Equality of outcomes is only possible in a world where equality of rights or equality before the law is thrown out the window.

  10. Instances of someone "charging" $20 for a bottle of hand sanitizer are virtually non-existent. But even then, no one's forcing anyone to buy it.

    In most states, an increase of 10 to 15% is termed gouging and therefore illegal. That's absurd. I'm confident a 50% increase in price would dampen demand, increase supply and keep the shelves full. And we'd all save the time of standing in line.

    Gouging laws target a bogey-man scoundrel who rarely exists. Instead they make mini-scroundrels of us all, as we rationally stock up unnecessarily with the fear that it not be available tomorrow.

    1. Yes you are a tiny little insignificant scoundrel.

      Sometimes you might value ethics as a principle.

      You are loyal when it benefits you.

      1. "Yes you are a tiny little insignificant scoundrel.
        Sometimes you might value ethics as a principle."

        You are a pathetic pile of shit who confuses mob rule with 'civilization' and theft with 'ethic'.
        Fortunately, there are not many as stupid as you.

    2. Your confidence shows a lack of intelligence on the matter. It takes a lot of time for the "increased supply" part to kick in, espcially when companies are shutting down. It also would not dampen demand for NEEDED items, only desired items.

  11. Rather than threaten "price gougers", I'd prefer my state ENCOURAGE them. "Bring all your toilet paper, hand-sanitizer (and bacon ... oh, yes, BACON) here - and charge whatever you want!" We'd drain all the supplies from nearby states, and so much so, that the price "enhancements' that could be charged would be in the 20% - 50% range, not 1000% when you drive "gougers" underground.

    1. “ enhancements’ that could be charged would be in the 20% – 50% range, not 1000%”

      What makes you believe that to be true? Certainly not the uncivilized concept of market supply and demand.

      1. "What makes you believe that to be true?" -- Um... The illegal drug market perhaps?!?!!!??!!

        Listening to people complain about the very concept of supply and demand is almost like watching a complete wack-job yell at the clouds because it's raining. None of your fussing, yelling and law lobbying is going to stop the rain - but of course you know that.

        What you're all really doing is crying for someone else to be FORCED to be your slave. Force them to come hold an umbrella over your wildly spoiled and self-entitled brat of an existence.

        If you don't like the PRICE then WALK AWAY... Only slavers that lobby government about rain make that option obsolete.

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