$5000 per violation of price-gouging in CA • Hacker News Board

Re: $5000 per violation of price-gouging in CA

#11

Post by logicchains » Sat, Mar 14, 2020, 3:45 PM UTC

briandear wrote: post #3

An argument supporting gouging: https://reason.com/2019/01/31/price-gouging-is-supply-and-de...

You'll find a similar argument in any basic econ textbook. Put a cap on prices, then when demand rises for something (which normally leads to an increase in price, all other things being equal), the lack of an accompanying rise in price means there is no incentive to produce more of the good (no incentive for more producers to enter the market), so there isn't a corresponding increase in supply.

Might work okay in China, where the government can e.g. command factories to switch to producing masks, but it means American factory owners won't have any incentive to switch over to producing them.

Re: $5000 per violation of price-gouging in CA

#12

Post by wayoutthere » Sat, Mar 14, 2020, 3:45 PM UTC

frankharv wrote: post #8

[flagged]

So low wage workers should abandon their jobs to spend their time procuring essentials at reasonable prices? Because right now there's a lot of speculation short-term, but things will go back to normal in a week or so after everyone has enough toilet paper to last until 2050.

Free market capitalism frequently generates outcomes that are at odds with a functioning society, and this is just another example.

Re: $5000 per violation of price-gouging in CA

#13

Post by logicchains » Sat, Mar 14, 2020, 3:45 PM UTC

sollewitt wrote: post #9

briandear wrote: post #3

An argument supporting gouging: https://reason.com/2019/01/31/price-gouging-is-supply-and-de...

That's just poor reasoning on multiple levels: it assumes supply, the argument that it prevents hoarding misses that as prices are driven up the incentive to hold increases, and it overlooks that some populations night need the good immediately so real harm is being done. The gain is personal, the harm is social, this is ethics 101 and solipsistic pseudo-libertarion reasoning doesn't make it right.

>solipsistic pseudo-liberation reasoning

Basic economics is solipsistic pseudo-liberation reasoning now?

Re: $5000 per violation of price-gouging in CA

#14

Post by Mountain_Skies » Sat, Mar 14, 2020, 3:46 PM UTC

How often does anyone get charged for this other than a few token made to be an example for the most egregious behavior? Price gouging laws seems to be mostly a threat rather than an actual attempt at regulating pricing. It's similar to how the police will arrest huge numbers of people during a protest and then drop the charges against almost all of them the next day. The backbone of the protest had been broken so it no longer mattered if they swept up a bunch of bystanders with protestors and rioters as they're all let go. I wonder how well any of these gouging laws would stand up in court if the state didn't quickly drop charges when challenged.

Re: $5000 per violation of price-gouging in CA

#15

Post by logicchains » Sat, Mar 14, 2020, 3:46 PM UTC

yladiz wrote: post #10

baryphonic wrote: post #7

Earlier quoted context omitted.

What externalities?

One example is a pandemic.

The point is that capping the price of e.g. masks means _fewer masks_ are produced, which is worse for stopping the pandemic.

Re: $5000 per violation of price-gouging in CA

#16

Post by anikan_vader » Sat, Mar 14, 2020, 3:46 PM UTC

From an economics stand point, I don't understand why the government should ban price-gouging. Doesn't this place an artificial price ceiling that will ensure a shortage of goods? I would personally rather stores have items such as food/water at marked-up prices than not at all.

Re: $5000 per violation of price-gouging in CA

#17

Post by ZhuanXia » Sat, Mar 14, 2020, 3:46 PM UTC

herbstein wrote: post #6

briandear wrote: post #3

An argument supporting gouging: https://reason.com/2019/01/31/price-gouging-is-supply-and-de...

Yes, that is an an argument. It's just not terribly convincing if you don't already subscribe to the idea that markets are always right, externalities be damned.

High prices induce production that would not have occurred otherwise. They also curve demand downwards so that only those who really want the item will get it. There is little reason to outlaw price gouging save for humans have a disgust response to people who profit from tragic events. Absent these laws, there would be incentive to create stockpiles of needed items before a disaster and retool less-efficient factories to produce now more-profitable items during a crisis. We do not think markets are magic. We think they are machines that run on price signals, and bashing these signals with hammers will degrade the efficiency of the machine.

Re: $5000 per violation of price-gouging in CA

#18

Post by hobs » Sat, Mar 14, 2020, 3:47 PM UTC

logicchains wrote: post #11

briandear wrote: post #3

An argument supporting gouging: https://reason.com/2019/01/31/price-gouging-is-supply-and-de...

You'll find a similar argument in any basic econ textbook. Put a cap on prices, then when demand rises for something (which normally leads to an increase in price, all other things being equal), the lack of an accompanying rise in price means there is no incentive to produce more of the good (no incentive for more producers to enter the market), so there isn't a corresponding increase in supply. Might work okay in Ch…

Do you actually think our economy needs 200x as much hand sanitizer production?

If the demand runs high enough for long enough, it wont be an emergency, and emergency measures don't apply.

Re: $5000 per violation of price-gouging in CA

#19

Post by seibelj » Sat, Mar 14, 2020, 3:47 PM UTC

sollewitt wrote: post #9

briandear wrote: post #3

An argument supporting gouging: https://reason.com/2019/01/31/price-gouging-is-supply-and-de...

That's just poor reasoning on multiple levels: it assumes supply, the argument that it prevents hoarding misses that as prices are driven up the incentive to hold increases, and it overlooks that some populations night need the good immediately so real harm is being done. The gain is personal, the harm is social, this is ethics 101 and solipsistic pseudo-libertarion reasoning doesn't make it right.

I would rather the price 10x if it means people can buy toilet paper, than have it be unavailable to all. But I am thinking rationally rather than emotionally.

Re: $5000 per violation of price-gouging in CA

#20

Post by djhworld » Sat, Mar 14, 2020, 3:47 PM UTC

briandear wrote: post #3

An argument supporting gouging: https://reason.com/2019/01/31/price-gouging-is-supply-and-de...

> Higher prices are also a deterrent against hoarding, particularly in the days leading up to a disaster. To be on the safe side, many consumers are inclined to buy more than enough of whatever they think they'll need. The more expensive the propane is, the more is available for everyone else.

I think this makes sense.

It would definitely stop people like this guy [1] going out and cleaning all the local stores/rural stores and mom and pop outlets of cleaning supplies, then selling the stuff on for a huge profit...

[1] https://www.nytimes.com/2020/03/14/technology/coronavirus-pu...