For most economists, the workings of “price gouging” laws are simple and predictable. Binding price caps in emergencies create shortages on the most urgently needed goods and services during emergencies.
The recommended policy reform is simple, too: stop harming citizens when they can least afford it!
It would seem to be an open-and-shut case, a slam dunk for economics to inform the electorate and thus policymakers to avoid such folly. Remember the gasoline lines and natural gas shortages of the 1970s? Perhaps no simple event has convinced mainstream economists that price controls have bad consequences despite intention.
Defenders of economic liberty have an even easier argument: merchants ought to be free to ask what ever price they like for the goods and services they offer. Price gouging laws unjustly limit that freedom and government ought not to do that.…
Continue Reading“If we face the facts courageously, we shall see that a large area has been left open for the exercise of our initiative.”
The holiday season is not only a time to count our blessings, but also to imagine (or perhaps simply recognize) an ever-improving future for ourselves and the broader society. To that end, we can be thankful that the theories of doom-and-gloom are wrong, and the disastrous predictions drawn from those theories bear no resemblance to reality.
Being both a great fan of the 19th century classical-liberal political economist Frederic Bastiat and a critic of neo-Malthusianism, I was surprised to discover recently that Bastiat devoted an entire chapter of his work “Economic Harmonies” to Malthus’s theory on population. As Master Resource readers probably know, it was Malthus’s theory on population that prompted historian Thomas Carlyle to refer to economics as “the dismal science.”…
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