I believe that laws that prohibit price “gouging” should stay in place, but that there are other steps that need to be taken that will also prevent price “gouging”, such as further proactive government involvement, better distribution of the products in need, and putting the needs of the victims of a natural disaster before all else.
When a natural disaster occurs, or if the local/federal government is aware that a natural disaster is imminent, they should take steps to ensure the supply of these obviously needed items such as food, water, generators, etc. is sufficient. In the particular situation outlined in John Stossel’s video, the man arrested for price “gouging” was rightly arrested, but it was counterintuitive that his generators were taken away instead of being distributed to the population in need. There should also be a limit to how many in-demand supplies one family can buy, thereby preventing people buying more supplies than they need.In the case of Stossel’s video, the price gouging laws did not affect natural disaster victims positively, but the real problem is that the opportunity for these price gougers exists. Obviously, the supply for generators was there, but instead of the local law enforcement, military, Red Cross, or other agencies bringing them to the people, price gougers did. But, once the distribution of needed items is improved, the laws that prohibit price gouging will be more effective and affect natural disaster victims positively. Without these necessary efforts, though, price gouging usually has a negative effect on the victims of natural disasters.
It did not do any good when the generators were in the custody of law enforcement and not in the hands of the people that truly needed them and were willing to pay the price. Just because they were willing to pay the price, though, does not mean that it was morally ok to be charging that much.Traditionally, whenever supply goes down, price does increase. Or, for example, during the holidays, prices at retail stores go up simply because they know people will buy gifts for their loved ones and tolerate slightly overpriced items, simply because it is expected of them.
The tricky part, though, comes when ethics/morality becomes part of the argument. Is it morally wrong to raise prices around the holidays? Most would say no. But is it morally wrong to raise prices of items such as generators in regions natural disasters are occurring? Most would say yes. Statistically, though, price gouging is simply following the law of supply and demand. Laws against price gouging are supposed to change potential suppliers incentives to become purer and prevent those seeking to make a profit off their good deeds to feel able to do so.
Also, sometimes potential suppliers would not supply these in need items if they know they can not make a profit. Most of the time, people don’t just do things to be generous or kind.