Libertarian Opinion; Is the Concept of "Price Gouging" a Communist Concept?

[dross]

https://www.indianagunowners.com/fo...plaining_about_price_gouging.html#post3636058

I understand your point, but what I don't get is why you think that "first come first served" is more fair than raising the price. If I can't afford an item when the price goes up, you're right, I go without.

On the other hand, if you sell at regular price during a time of high demand, you will run out of stock lightning fast. If I can't get to the store fast enough, I'm as SOL as the guy who can't afford it.

High enough demand will always create a shortage. Each method of distributing a scarce resource will have an upside and a downside. I don't know why the guy who happens to have a supply of the scarce resource should have to sacrifice so that the people who want the resource don't have to.

Personally, I think raising the price is the best way to distribute the resource, and in the end, that's what will always happen anyway. If they pass a ban on hi cap mags and grandfather the ones already made, the price will eventually go up and settle out. In a year or two after that, no one will call it gouging anymore.

 

[chizzle]

https://www.indianagunowners.com/fo...plaining_about_price_gouging.html#post3636058

Interesting. Thank you for posting. It looks like this thread has more libertarian minded folks, and the other thread has more folks who are complaining about the new supply and demand equilibrium point. It does appear that some are fighting the good fight though. It always amazes me that even when you lay out a logical Economics 101 discussion, how many people still get angry to see folks make a profit. This whole notion that "profit is bad" is a real head scratcher for a Capitalistic society.

 

[dross]

I think Rob agrees with you, but is just phrasing it slightly different. I think you both are saying the government forces may be irrational, but that the end buyer is making a rational decision to buy something at the current market price.

If I understand you guys correctly, that explains me buying inflated Pmags pretty well. The prospect of government intervention has inflated prices (maybe rational, maybe not) and I made the rational decision to buy one at the new price because even at $40, it is worth the money to me.

The buyers are behaving perfectly rationally based on their interpretation of the available information. The information is incomplete. Some view the available information and think hi cap mags are gone for good. Others think that won't happen, or at least won't happen before they get a chance to buy some more at regular price.

I think either view is perfectly rational. It's a gamble. If you pay the inflated prices and the ban comes, you win. If you don't pay and the ban doesn't come, you win.

We must often choose a path based on too little information, with high stakes on the outcome. Being right in the end doesn't always mean your reasoning was superior, it sometimes just means you guessed right and lucked out.

 

[chizzle]

I understand your point, but what I don't get is why you think that "first come first served" is more fair than raising the price. If I can't afford an item when the price goes up, you're right, I go without.

On the other hand, if you sell at regular price during a time of high demand, you will run out of stock lightning fast. If I can't get to the store fast enough, I'm as SOL as the guy who can't afford it.

High enough demand will always create a shortage. Each method of distributing a scarce resource will have an upside and a downside. I don't know why the guy who happens to have a supply of the scarce resource should have to sacrifice so that the people who want the resource don't have to.

Personally, I think raising the price is the best way to distribute the resource, and in the end, that's what will always happen anyway. If they pass a ban on hi cap mags and grandfather the ones already made, the price will eventually go up and settle out. In a year or two after that, no one will call it gouging anymore.

I agree with Dross. Money is our medium of exchange in this country. By making something first come first serve (while holding the price well below market value) all you are really doing is changing the exchange medium to time (instead of just dollars) as lines will typically form (i.e. backordering) and you nearly guarantee shortages and a black market.

 

[chizzle]

The buyers are behaving perfectly rationally based on their interpretation of the available information. The information is incomplete. Some view the available information and think hi cap mags are gone for good. Others think that won't happen, or at least won't happen before they get a chance to buy some more at regular price.

I think either view is perfectly rational. It's a gamble. If you pay the inflated prices and the ban comes, you win. If you don't pay and the ban doesn't come, you win.

We must often choose a path based on too little information, with high stakes on the outcome. Being right in the end doesn't always mean your reasoning was superior, it sometimes just means you guessed right and lucked out.

I think you explained it better/more completely than I did. Well said.

 

[chizzle]

The buyers are behaving perfectly rationally based on their interpretation of the available information. The information is incomplete. Some view the available information and think hi cap mags are gone for good. Others think that won't happen, or at least won't happen before they get a chance to buy some more at regular price.

I think either view is perfectly rational. It's a gamble. If you pay the inflated prices and the ban comes, you win. If you don't pay and the ban doesn't come, you win.

We must often choose a path based on too little information, with high stakes on the outcome. Being right in the end doesn't always mean your reasoning was superior, it sometimes just means you guessed right and lucked out.

I think you explained it better/more completely than I did. Well said.

 

[dross]

I agree with Dross. Money is our medium of exchange in this country. By making something first come first serve (while holding the price well below market value) all you are really doing is changing the exchange medium to time (instead of just dollars) as lines will typically form (i.e. backordering) and you nearly guarantee shortages and a black market.

Well said, yourself.

"...changing the exchange medium to time..."

And when you help create that black market (right now, that's Gunbroker) by artificially holding your price lower than the object's value, you are also donating your the profit you could have made to someone else.

"Here you go, you take this a below it's value and make a profit on it. I won't soil my hands with that dirty money."

Kind of ironic that you enable someone else to do the very thing you think is wrong, and then to benefit from it as well!

 

[mydoghasfleas]

Here is an example of "evil price gougers" at work during katrina. The .gov is incapable and/or too slow to help everyone and then want to make it illegal for others to offer help.

MYTH: Price-Gouging Is Bad - ABC News

"Mississippi Attorney General Jim Hood announced a crackdown on gougers after Hurricane Katrina.

John Shepperson was one of the "gougers" authorities arrested. Shepperson and his family live in Kentucky. They watched news reports about Katrina and learned that people desperately needed things.

Shepperson thought he could help and make some money, too, so he bought 19 generators. He and his family then rented a U-Haul and drove 600 miles to an area of Mississippi that was left without power in the wake of the hurricane.
He offered to sell his generators for twice what he had paid for them, and people were eager to buy.

Police confiscated his generators, though, and Shepperson was jailed for four days for price-gouging. His generators are still in police custody."

Thanks alot! He will never try that again.

 

[chizzle]

Here is an example of "evil price gougers" at work during katrina. The .gov is incapable and/or too slow to help everyone and then want to make it illegal for others to offer help.

MYTH: Price-Gouging Is Bad - ABC News

"Mississippi Attorney General Jim Hood announced a crackdown on gougers after Hurricane Katrina.

John Shepperson was one of the "gougers" authorities arrested. Shepperson and his family live in Kentucky. They watched news reports about Katrina and learned that people desperately needed things.

Shepperson thought he could help and make some money, too, so he bought 19 generators. He and his family then rented a U-Haul and drove 600 miles to an area of Mississippi that was left without power in the wake of the hurricane.
He offered to sell his generators for twice what he had paid for them, and people were eager to buy.

Police confiscated his generators, though, and Shepperson was jailed for four days for price-gouging. His generators are still in police custody."

Thanks alot! He will never try that again.

Your story is a great example of increased prices driving production towards a new demand, despite indirect competition. This guy could have stayed at home and went to work like normal (indirect competition), but since he saw more profit in this production (renting and driving a truck to New Orleans), he changed his behavior to meet the new demand and to make some money. This is a perfect example of the system working, and of the government throwing a monkey wrench into the gears of capitalism when it could have really helped people.

 

[Rob377]

I think Rob agrees with you, but is just phrasing it slightly different. I think you both are saying the government forces may be irrational, but that the end buyer is making a rational decision to buy something at the current market price.

If I understand you guys correctly, that explains me buying inflated Pmags pretty well. The prospect of government intervention has inflated prices (maybe rational, maybe not) and I made the rational decision to buy one at the new price because even at $40, it is worth the money to me.

Yep, for the most part.

My only point of contention here is that this state of people not knowing whether there'll be a ban or not isn't an equilibrium point.

As Dross pointed out, some people will be right/win, and some will be wrong/lose.

The lack of accurate information about ban/no ban prevents the pricing mechanism from working efficiently and thus, will result in some degree of malinvestment. Those that were wrong, however rational at the time, will end up with wasted resources.

We'll find out soon enough who's who.

 

[mydoghasfleas]

Your story is a great example of increased prices driving production towards a new demand, despite indirect competition. This guy could have stayed at home and went to work like normal (indirect competition), but since he saw more profit in this production (renting and driving a truck to New Orleans), he changed his behavior to meet the new demand and to make some money. This is a perfect example of the system working, and of the government throwing a monkey wrench into the gears of capitalism when it could have really helped people.

It reminds me of people starving in russia and russia imprisoning some of its population for trying to grow wheat who were not allowed to.

 

[chizzle]

My only point of contention here is that this state of people not knowing whether there'll be a ban or not isn't an equilibrium point.

Do you think there is a difference between:
1) Supply and demand equilibrium for an economy
2) Supply and demand equilibrium for an individual

I'm not sure I know the answer here, but this is my theory: An economy would reflect the sum of all the individual supply and demand curves. If you accept that, I can't really "lose" if I buy $40 Pmags, I just just showed what my demand was. If the max price you would pay is $30, you didn't really lose either; the mags just cost more than they are worth to you.

 

[downzero]

Price is the market's rationing function.

 

[chizzle]

It appears there is yet another thread by folks who don't like prices reflecting current market conditions:

https://www.indianagunowners.com/fo...655-profiteering_off_personal_protection.html

What I don't understand is, how do they think their utopian plan will work? Will we all just exchange $12 Pmags with those "who need them the most"? Will Gunbroker or eBay (or every auction ever) cease to exist? While I appreciate their frustration towards the recent increase in prices, I also live in the real world and want a solution that could actually work.

 

[dross]

Yep, for the most part.

My only point of contention here is that this state of people not knowing whether there'll be a ban or not isn't an equilibrium point.

As Dross pointed out, some people will be right/win, and some will be wrong/lose.

The lack of accurate information about ban/no ban prevents the pricing mechanism from working efficiently and thus, will result in some degree of malinvestment. Those that were wrong, however rational at the time, will end up with wasted resources.

We'll find out soon enough who's who.

I disagree that the pricing mechanism isn't working effectively. If you define an effective market as one where every transaction is a win/win, I think that's too high a standard. A functioning system must have the ability to absorb luck and random events.

The same could be said for crop damage from an impending storm. Not knowing how bad a storm will be could cause one farmer to harvest his crop a little early and take a lower yield, but another could decide to risk it and wait.

Which one was right? They each had the same information, but no one can predict with certainty whether the storm would be bad enough to wreck the crop or not.

The fact that one will turn out to be right doesn't mean he was more rational.

If you're just trying to say that consequential events will cause some in the market to waste their resources, I certainly agree, but I don't think that shows any flaw in the market itself. If lack of complete information is a market flaw, it's also a flaw of the reality of the Universe, which is to say it's no flaw at all.

At least I don't have the hubris to declare the Universe flawed.

 

[CTS]

Well there are four foundations of capitalism:

-Freedom to own private property
-Freedom to retain profits
-Freedom to compete
-Freedom to choose

The way I see it, their inventory is their private property, they can sell it/drop it off roof/sit it on the shelf/etc...it's theirs. If they do sell it, whatever the difference is between the price and their expense, belongs to them. If their price includes an extremely high margin, if someone else owns a supply and wishes to part with it, they'll have an excellent opportunity to sell at significantly less than the competition and still earn a considerable return, which may force the other store to lower theirs if they want to retain their customers. If consumers decides to pay either of them their price, that's their right as well.

The only time I think gouging can be used in a true market economy is when price fixing is going on. Otherwise the drive to compete will drive prices back down to normal levels.

 

[printcraft]

............Otherwise the drive to compete will drive prices back down to normal levels.

It's going to be a while.

1 magazine............

Magpul PMAG 30 Round New Magazine P Mag 30RD AR 15 Ar15 P Mag AR 15 NIP | eBay

 

[CTS]

I'll demonize CTD all day long for deciding to pull guns but not for the "price gouging." If some guy who could afford it and knew what he was doing walked up to you and offered to buy your G19 for $2500 I'm pretty sure 99% of us would sell it. There's a huge demand spike, so prices will rise. If they didn't raise their prices they would sell out in no time and some other business would mark them up based on the demand and walk away with the extra profit instead of them. I guarantee you a ton of these things are going to people who want to "get in early" before the prices go really crazy and they can resell them, not just to people who want them for personal use.

 

[Prometheus]

I don't mean to provoke you or create an argument, I just want to make sure I understand your position. Are you mad at Cheaper Than Dirt because of the prices that they are currently charging, or for some other reason?

There was a thread here about it. Check the "boycott chapter than dirt" face book page or look here. Basically ctd sided with the lib s over online gun sales for a couple days, lost teens of thousands of subscribers ect ect before wising up.

Charging 60$ for a pmag? Free markets wool handle that too, lol

 

[dross]

Anyone has the right to boycott any business for any reason they desire.

Nothing wrong with saying, "I'm going to boycott this business because they choose to distribute the resources they own through price fluctuations, and support businesses who choose to distribute their resources through a first come, first served methodology."

Personally, I don't understand it, but it's all about the freedom.