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$5000 per violation of price-gouging in CA

caloes.ca.gov

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

#31

Post by seibelj »

wayoutthere wrote: post #12
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.

Free market capitalism has lead to the greatest standard of living ever experienced in the history of the world, especially for citizens on the lowest rungs of society. It may be at odds with your quibbles of modern society, but when viewed holistically I’m so happy that we have clean water, tons of nutritious food, computers, etc. etc. etc.

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

#32

Post by bernawil »

nwah1 wrote: post #23
whatshisface wrote: post #4

Price isn't just the cost of buying something, it's the reward for producing it. If we see too many price gouging laws, then you can expect shortages as companies find themselves unable to justify extreme measures that would otherwise increase production (at great expense). Secondly, I would expect that localities with price gouging laws will discover that their goods are being re-routed to other places without those…

Yep. A much better way to alleviate shortages would be to suspend sales taxes.

Most stuff is bought by scalpers and sold on the black market anyway

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

#33

Post by ardit33 »

anikan_vader wrote: post #16

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.

Because a lot of the short term price gouging is artificial/predatory:

"Vancouver couple exploits pandemic by hoarding Lysol wipes and charging double to resell them."

https://www.thestar.com/news/canada/2020/03/12/were-hustlers...

They are not raising prices to produce more, but just hoarding and then reselling it at higher prices.

"Price Gouger Unable to Sell 17,700 Bottles of Hand Sanitizer after Amazon Crackdown"

https://www.nytimes.com./2020/03/14/technology/coronavirus-p...

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

#35

Post by nostrademons »

anikan_vader wrote: post #16

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.

From a political standpoint, I see the point. Price gouging makes people extremely mad, and it redirects goods from poor people to wealthy people. When tempers are already fraying and maintaining social order is already difficult because of an emergency, the last thing a government needs is a nucleus for lots of pissed-off people to rally around.

Remember that the first priority of any government is to keep itself in power. Governments that don't accomplish this are no longer governments. Efficiently allocating goods is a secondary consideration that helps them achieve this, but if doing so means they end up with a revolution or rebellion anyway, it wasn't very effective.

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

#36

Post by karamanolev »

ZhuanXia wrote: post #17
herbstein wrote: post #6

Earlier quoted context omitted.

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 factori…

I do agree with the inducing production part. Where this massively fails is the "only those who really want the item will get it". This is really "the wealthy can afford the item without batting an eye and the poor be damned". Not exactly a great idea for essential items.

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

#37

Post by geofft »

whatshisface wrote: post #4

Price isn't just the cost of buying something, it's the reward for producing it. If we see too many price gouging laws, then you can expect shortages as companies find themselves unable to justify extreme measures that would otherwise increase production (at great expense). Secondly, I would expect that localities with price gouging laws will discover that their goods are being re-routed to other places without those…

Isn't price-gouging usually (and definitely in this context) about someone who bought an item at a standard wholesale price and is reselling it at a markup? That's not about the reward for producing it, that's about the reward for being in the right place at the right time.

You can still try to argue that it's economically reasonable to reward people for being in the right place at the right time (to incentivize people to ship goods around etc.), but that's a very different argument from whether companies are able to fund increases of production.

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

#38

Post by krapp »

seibelj wrote: post #31
wayoutthere wrote: post #12

Earlier quoted context omitted.

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.

Free market capitalism has lead to the greatest standard of living ever experienced in the history of the world, especially for citizens on the lowest rungs of society. It may be at odds with your quibbles of modern society, but when viewed holistically I’m so happy that we have clean water, tons of nutritious food, computers, etc. etc. etc.

The reason the water is clean and the food is nutritious is due to regulations, not free market capitalism.

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

#39

Post by will_walker »

whatshisface wrote: post #4

Price isn't just the cost of buying something, it's the reward for producing it. If we see too many price gouging laws, then you can expect shortages as companies find themselves unable to justify extreme measures that would otherwise increase production (at great expense). Secondly, I would expect that localities with price gouging laws will discover that their goods are being re-routed to other places without those…

This isn’t the companies being punished - it’s the opportunists. These vultures are driving to every small pharmacy and clearing out all the masks and sanitizer. Now that Amazon & EBay have cracked down on reseller gouging, some are sitting on stockpiles through the midst of a pandemic.

* https://www.nytimes.com./2020/03/14/technology/coronavirus-p...

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

#40

Post by sollewitt »

seibelj wrote: post #19
sollewitt wrote: post #9

Earlier quoted context omitted.

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.

Take face masks, that front line medical workers don't have, that their procurement offices won't let them buy for 10x - we are all screwed if all our nurses are sick.

You are basically saying "I am ok pricing limited necessary resources up to where only I and people as rich as me can afford them".

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