One More Thought on "Price Gouging"

Blogging on post-hurricane price-gouging is quite the rage these days. My friends, and in the first case, former professor, Don Boudreaux at Cafe Hayek and Glen Whitman at Agoraphilia said most of what I'd say. However, I do want to make one more point. I find it interesting that most of the charges of "gouging" involve those who sell material goods, such as lumber or shingles or generators. Both Boudreaux and Whitman only give examples involving physical goods.

What you almost never hear are any complaints about gouging when the very same sorts of supply and demand considerations raise the wages of carpenters, carpet-layers, lumberjacks, etc.. Evidently, it's okay for sellers of labor services to benefit from emergency conditions of supply and demand, but not people who sell material goods. That observation then leads me to wonder why the difference. Certainly, the belief that "people like us" are the direct beneficiaries of higher wages while higher prices for "stuff" is seen to mean profits for nameless, faceless corporations might explain a lot of it. (Of course the profits to those firms means higher incomes for owners, who include "people like us" directly for small businesses and indirectly for stockholders and those with stock-driven retirement funds.) Perhaps there is something about the directness per se that leads folks to be more sympathetic and not see higher wages as "price gouging." It may also be that individuals are just more sympathetic than institutions in general.

It would be interesting indeed to see some attorneys general start proceedings against carpenters who start earning twice their normal wage in the wake of a hurricane. I'm not holding my breath.