Citizendia
Your Ad Here

Price gouging is a pejorative term for a seller pricing much higher than is seen as 'fair' under the circumstances. Words and phrases are pejorative if they imply disapproval or contempt In precise, legal usage, it is the name of a felony that applies in some of the United States only during civil emergencies. In Common law legal systems a felony is a serious Crime, often contrasted with a Misdemeanor. The United States of America —commonly referred to as the In less precise usage, it can refer either to prices obtained by practices inconsistent with a competitive free market, or to windfall profits. A free market is a Market in which property rights are voluntarily exchanged at a price arranged completely by the mutual consent of sellers and buyers A windfall gain (or windfall profit) is any type of Income that is unexpected In colloquial usage, it means simply that the speaker thinks the price is too high. Non-pejorative uses are generally in reaction to what the writer believes is an unjustified restraint on the market.

The economic theory of the last free market suggests that, even in unusual circumstances, price controls do more harm than good by preventing incentives for the supply of needed goods. A free market is a Market in which property rights are voluntarily exchanged at a price arranged completely by the mutual consent of sellers and buyers For example, in a disaster situation, a very high price for equipment (e. g. tents) will prompt hugely increased supply of the relevant goods. Libertarians are among those who robustly defend the right of firms to charge what they want regardless of the circumstances. Libertarianism is a term used by a broad spectrum of political philosophies which prioritize individual Liberty and seek to minimize or even abolish the The contrary argument is that emergency situations increase inequality markedly and allowing vendors to exploit emergency situations to gain extra profits is unequitable.

As a criminal offense, Florida's law is reasonably typical. Florida ( is a state located in the southeastern region of the United States, bordering Alabama to the northwest and Georgia to the Price gouging may be charged when a supplier of essential goods or services sharply raises the prices asked in anticipation of or during a civil emergency, or when it cancels or dishonors contracts in order to take advantage of an increase in prices related to such an emergency. The model case is a retailer who increases the price of existing stocks of milk and bread when a hurricane is imminent. It is a defense to show that the price increase mostly reflects increased costs, such as running an emergency generator, or hazard pay for workers.

The term is similar to profiteering but can be distinguished by being short-term and localized, and by a restriction to essentials such as food, clothing, shelter, medicine and equipment needed to preserve life, limb and property. In jurisdictions where there is no such crime, the term may still be used to pressure firms to refrain from such behavior.

Some support the ability to raise prices under such circumstances, asserting that government prohibition of the practice is a violation of individual rights or that the ability to raise prices has beneficial effects or both. While some economists who defend the practice use the term "price gouging", others disparage it as merely pejorative.

The term is not in widespread use in economic theory but is sometimes used to refer to practices of a coercive monopoly which raises prices above the market rate that would otherwise prevail in a competitive environment. Economics is the social science that studies the production distribution, and consumption of goods and services. In Economics and Business ethics, a coercive monopoly is a business concern that prohibits competitors from entering the field with the natural result being that [1] [2] Alternatively, it may refer to suppliers' benefiting to excess from a short-term change in the demand curve. In Economics, the demand curve can be defined as the graph depicting the relationship between the price of a certain Commodity, and the amount of it that

Contents

Criticism

In the United States, laws against price gouging have been held constitutional as a valid exercise of the police power to preserve order during an emergency, and may be combined with anti-hoarding measures. A constitution is a system for government often Codified as a written document that establishes the rules and principles of an autonomous political entity Police power is the capacity of a State to Regulate behaviours and enforce order within its Territory, often framed in terms of Public welfare Hoarding is the storing of food or other goods or money Hoarding of food is a natural behaviour in certain species of animals The usual argument is fourfold.

  1. The community as a whole may well possess sufficient stocks to sustain it through the emergency, provided that panic can be avoided. Sharp increases in price may trigger such panic.
  2. When people's resources are strained by a situation beyond ordinary prudence, the corrective tendencies of the market are too slow and communication too uncertain.
  3. In an emergency, ordinary legal protections are impractical. Thus, refusing to sell lumber at an advertised price may constitute fraud and refusing to honor a reservation may constitute a tort, but the harm is likely to be irreparable long before a case can be brought. In the broadest sense a fraud is a Deception made for personal gain or to damage another individual Tort law is the name given to a body of law that creates and provides remedies for civil wrongs that do not arise out of Contractual duties
  4. Regardless of theory, when people become desperate, public order becomes precarious. Emergency services are likely to be strained by both increased need and reduced capacity. Riots by otherwise law-abiding citizens could prove overwhelming.

Exceptions are prescribed for price increases that can be justified in terms of increased cost of supply, transportation or storage. Statutes generally give wide discretion not to prosecute: in 2004, the State of Florida determined that one-third of complaints were unfounded, and a large fraction of the remainder were handled by consent decrees, rather than prosecution. "MMIV" redirects here For the Modest Mouse album see " Baron von Bullshit Rides Again " Florida ( is a state located in the southeastern region of the United States, bordering Alabama to the northwest and Georgia to the A consent decree (also referred to as a consent order) is a judicial Decree expressing a voluntary agreement between parties to a suit, especially

Advocacy

Many of those who support a right to engage in price gouging regard the terminology itself as being designed to create prejudice against a free-market system. The word prejudice refers to prejudgment making a decision before becoming aware of the relevant facts of a case or event They view the rapid increase of prices as a valid system for rapidly distributing scarce resources to those who need them most (as supposedly evidenced by what they are willing to offer in exchange) and rewarding those who have prepared for potential scarcity by taking steps to provide the highly desirable resources. Some hold that opponents of the free market prefer systems of distribution based on access to political power or willingness to wait in long lines. A free market is a Market in which property rights are voluntarily exchanged at a price arranged completely by the mutual consent of sellers and buyers They also argue that since these systems do not reward the provider, there is decreased incentive for suppliers to plan for unusual demand situations, causing further scarcity.

Free market economists Thomas Sowell and Walter E. Williams, among others, argue against laws that interfere with large price changes. Thomas Sowell (born June 30, 1930) is an American Economist, social commentator and author of dozens of books Walter E Williams, Ph D (born 1936 in Philadelphia) is an American economist and college professor at George Mason University According to this view, high prices can be viewed as information for use in determining the best allocation of scarce resources for which there are multiple uses. They, in effect, reject the term "price gouging," and argue that laws against price increases serve only to restrict supplies of a good or service by reducing the incentive suppliers have to undertake any additional costs, hazards or inconvenience that may be required. They argue further saying that these price increases force consumers to ration goods thus increasing the longevity of certain resources in an emergency. Problems during the 1870 Siege of Paris, which critics attribute to price restrictions, are often held up as an example. Year 1870 ( MDCCCLXX) was a Common year starting on Saturday (link will display the full calendar of the Gregorian calendar (or a Common The Siege of Paris, lasting from September 19, 1870 &ndash January 28, 1871, brought about French defeat in the Franco-Prussian War In the same vein, economists Jerry Taylor & Peter VanDoren state: "Gougers are sending an important signal to market actors that something is scarce and that profits are available to those who produce or sell that something. Gouging thus sets off an economic chain reaction that ultimately remedies the shortages that led to the gouging in the first place. "

See also

External links

Objectivism is a Philosophy developed by Ayn Rand in the 20th century that encompasses positions on Metaphysics, Epistemology,

Dictionary

price gouging

-verb

  1. Present participle of price gouge.

-noun

  1. The act of or an instance of charging services or pricing goods at unreasonably high prices.
© 2009 citizendia.org; parts available under the terms of GNU Free Documentation License, from http://en.wikipedia.org
 Dapyx Software network: MP3 Explorer | Ebook Manager | Zenithic