Coronavirus

How 'Price Gouging' Helps Consumers During the Coronavirus Pandemic

Q&A with Duke's Michael C. Munger, who also believes that big cities will see rationing and that higher education will never be the same.

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As the COVID-19 pandemic prompted shoppers to clear out supermarkets of toilet paper, rice, and canned vegetables, two brothers set out on a 1,300 mile road trip through the back roads of Kentucky and Tennessee. Matt and Noah Colvin loaded up a U-Haul with all the hand sanitizer and antibacterial wipes they could find and attempted to resell the goods on Amazon at a massive markup. Then the online retailing giant banned the practice, state attorneys general started cracking down, and the Colvins were shamed in the media. They ended up donating the items. 

But is so-called price gouging a bad thing? Michael C. Munger, who teaches economics, political science, and public policy at Duke University, argues that prices contain vital information about supply and demand. When governments attempt to mandate cheap goods, he says, they end up causing more shortages than they solve. And this is especially true during a crisis.

Nick Gillespie spoke with Munger via Zoom about how the 21st century is testing libertarian ideas about limited government and individual freedom.

Interview by Nick Gillespie. Edited by Ian Keyser. Intro by Meredith Bragg. Thumbnail by Lex Villena.

Music: 'White Hats' by Wayne Jones

Photo credit: David Allio/Icon Sportswire/Newscom, Matthew Pearce/Icon Sportswire/Newscom, Niyi Fote/ZUMA Press/Newscom, Wayne Gooden/Image of Sport/Newscom, Matthew Pearce/Icon Sportswire/Newscom, ID 174343426 © Cheryl Fleishman | Dreamstime.com, ID 177273332 © ColleenMichaels | Dreamstime.com

NEXT: No, Trump Does Not Have the Power to Declare a National Stay-at-Home Order

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  1. That great to support people during that crazy time of world.

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  2. scalpers serve no economic purpose

    ever

    1. You.
      Are.
      Full.
      Of.
      Shit.
      And a fucking lefty ignoramus besides.

  3. Walter Williams had said the same thing years ago. There is a big difference between gouging (which increases the supply of something to those who need it) and hoarding (which decreases the supply). In a nutshell, gouging reduces hoarding.

  4. There is no such thing as “price gouging”; that’s a phrase invented by lefty scum in the hopes of getting the government to fix prices at what lefty scum thinks they “should” be.

    1. Nah. It was a phrase invented by people who thought there could be unethical behavior in the marketplace. But not everyone wants to the government to step in.

      Libertarians sometimes remind me of that business creep in Billy Madison who is in an academic decathlon and asked to give an answer about business ethics and he freezes up. They’ve convinced themselves that any talk of “ethics” is some fiendish plot by socialists to take over, as if business isn’t run by fallible human beings who can make bad decisions and unethical decisions, same as they can all other arenas of life.

      Same nonsense whenever you’re critical of some TV show or movie. The knee-jerk libertarian response is to assume you want censorship and for the government to step in, and then shame you out of having a critical opinion.

      While from an abstract economic perspective, you can argue price gouging serves a “purpose”, all sorts of philosophers have argued all sorts of bad behavior serves a purpose. After all, without liars, we would never think critically about the truth. Without thieves, we would know less the value of our possessions. “Every rose has its thorn.” Whats your point?

  5. Every shop and market has got effected during this pandemic called corona virus. Economic knowledge having persons can have better ideas regarding money gouging at https://www.bestbritishwriter.com/royalessays-co-uk-review/ which I can manage the task. But it is known fact that no market is left which is not effected by covid19.

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