Price gouging during natural disasters is still morally and economically wrong according to the document. While free markets are typically efficient, disasters cause markets to break down completely in impacted areas that cannot be physically accessed. Natural disasters are also usually short-term events that market forces cannot rapidly respond to. When access to essential resources like water and fuel are limited after a disaster, relying on price gouging would direct scarce supplies only to those who can pay rather than based on needs.
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Is Price gouging criminal or is it the free market.docx
1. Is Price gouging criminal or is it the free market working efficiently?
Memo to economists defending price gouging in a disaster: It’s still wrong, morally and
economically Hiltzik, Michael. Los Angeles Times (Online), Los Angeles: Tribune Interactive,
LLC. Aug 28, 2017. Abstract Translate [unavailable for this document] When the market
breaks down utterly, as in Houston, where huge swaths of the region will have little or no
access for days at least to fresh water, auto fuel and electricity, almost nothing the free
market can do will get supplies of these commodities to places that can’t be physically
reached. Another factor commonly overlooked by defenders of price gouging is that natural
disasters tend to be (1) short-term and (2) not amenable to rapid response by market
forces. […]when the task involves opening access to a market isolated from the outside
world by natural disaster, the free market is powerless to help; its only ability is to direct
scarce, life-giving resources exclusively to those who can pay.
![Is Price gouging criminal or is it the free market working efficiently?
Memo to economists defending price gouging in a disaster: It’s still wrong, morally and
economically Hiltzik, Michael. Los Angeles Times (Online), Los Angeles: Tribune Interactive,
LLC. Aug 28, 2017. Abstract Translate [unavailable for this document] When the market
breaks down utterly, as in Houston, where huge swaths of the region will have little or no
access for days at least to fresh water, auto fuel and electricity, almost nothing the free
market can do will get supplies of these commodities to places that can’t be physically
reached. Another factor commonly overlooked by defenders of price gouging is that natural
disasters tend to be (1) short-term and (2) not amenable to rapid response by market
forces. […]when the task involves opening access to a market isolated from the outside
world by natural disaster, the free market is powerless to help; its only ability is to direct
scarce, life-giving resources exclusively to those who can pay.](https://image.slidesharecdn.com/ispricegougingcriminalorisitthefreemarket-230625190629-f674af80/85/Is-Price-gouging-criminal-or-is-it-the-free-market-docx-1-320.jpg)
