Reflections on Irma (part 2)

No post mortem of any natural disaster would be complete without a discussion of the law, ethics, and economics of “price gouging.” We understand the economics of price gouging (alas, it is the most efficient and fair method of allocating scarce resources after a disaster), and we also understand the ethics of price gouging (it is morally wrong to take economic advantage of someone else’s misfortunes), but here I am interested in the existence of laws against price gouging. Specifically, when, if ever, should laws trump the fundamental common law principle of liberty of contract? Here are some relevant links:

Pro (in defense of price gouging):

  1. Wayland Hunter (via Liberty Unbound)
  2. Matt Zwolinski (via Bleeding Heart Libertarians)
  3. Benjamin Zycher (via AEI)

Con (against price gouging):

  1. Jennifer Fitz (via National Catholic Register)
  2. Michael Hiltzik (via The Los Angeles Times)
  3. Jay Richards (via The Stream)

A larger question is this: whether you are for or against price-gouging laws, what should you make of this bitter disagreement over the ethics of price gouging? Philosophers have coined a  fancy term for this problem: “peer disagreement“. For our part, we are more fascinated by this larger problem (or meta-problem) of epistemic disagreement than by the underlying problem of price gouging itself.

Image result for epistemic disagreement

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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4 Responses to Reflections on Irma (part 2)

  1. CHC says:

    You assert that “price gouging is the most efficient and fair method” of allocating scarce resources after a disaster. Are you joking? Efficient I may grant you, as nothing brings cash (from those who have it) to the fore like a disaster, but fair? Alas, indeed. 😦

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