...and laws against it make bad situations worse
Economist Walter Williams explained incentives like those supplied by a pricing system years ago. The incentives to politicians (government) are to get re-elected, not necessarily do what makes economic sense. As economist Thomas Sowell also explained, "The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”
Politicians are not the most intelligent people in any society. Elections are not intelligence contests, so the intelligence of a candidate has little to do with whether a candidate "wins" an election. Politicians are almost all delusional self-servers, prone to magic thinking. The magic thinking that produces idiotic laws and policies is the delusion that passing a law or instituting a mandate via government regulation changes reality.
This is how such idiocy as an "anti-price gouging" law is seen by politicians as a solution to a problem instead of the institutionalization of that problem. Language itself must be twisted in order to try to make the case that the law solves anything. For instance, the word "fuel" must be replaced by the word "energy". Fuel is not energy, though it is necessary for producing various forms of energy. When words are substituted, the thinking of people is more easily influenced. Just look at some of the comments here for an example of how this works.
I just came back from Colorado. I went for a break from the 110 degree heat. Where I live gas is still outrageously expensive--well over $3 a gallon. But in end of summer let's rip off all the tourists while we can, Colorado gas was well over $4 a gallon--in some places over $1 higher. So instead of taking my truck and travel trailer and staying longer (and spending more money) I took the car and stayed in a rental place. The rental place was expensive and extremely uncomfortable, so I stayed only 2 days. Price gouging in Colorado incentivized me to go home. The funny thing is I use the Gas Buddy app so I was able to avoid all of the highest prices. How did price gouging help Colorado?
See I am one of those few Americans with the super power to know what a thing is actually worth. I do not pay rip off prices unless forced too. And judging from what I see every day I really am in a minority.
Well stated. In addition to all the practical reasons you list for avoiding price gouging laws, I would add: if I own something and I want to trade with someone else under mutually agreed terms, it is NO BUSINESS of the government, period. That's what it means to be a free person in a free country. Any government agent who attempts to stifle such acts is a criminal who deserves to be dealt with as a criminal.
Couldn’t agree more with all that’s been said. Common sense has become extremely uncommon. The Ukrainian conflict saw our energy costs soar here in Ireland, and across Europe, despite oil and gas tankers being unable to offload anywhere as the stockpiling of fuel was at capacity. There are countries like Germany who pursued idiotic energy policies well in advance of the conflict, and had seen, and continue to see their population creased by the jump in utility bills. Fair enough. But what excuse for the rest of us being hammered for supposedly scarce fuel? Same with just about anything you can possibly think of to buy. Inflation. Could it possibly be to fund the war by proxy being waged against the Russians? Off topic I know. But it is still the same people shaping policy, and the ridiculous laws like the one teased out in an excellent article. Many thanks.✍️👏
It should be obvious that people making free economic decisions is USUALLY far preferable to decisions made by bureaucrats who are often out of touch with local realities and immune from the consequences of their blunders. The desire to have the government take care of us by controlling everything is the acorn seed of fascism and totalitarianism.
Still waiting after more than 70 years to see the time when anything the government does makes things better for the average citizen. Government, by its very nature, must always enact laws to keep up the disillusionment that a person is totally incapable of living without constant nanny-sitting by some bureaucratic psychopaths. Government is nothing more than a control freak's convention.
Its not all that strange, its Econ 101. Supply and demand just works when its allowed to.