The Ethics of Price Gouging

Matt Zwolinski an Assistant Professor of Philosophy at the University of San Diego has a new paper on The Ethics of Price Gouging. Zwolinski describes gouging as

a practice in which prices on certain kinds of necessary items are raised in the wake of an emergency to what appear to be unfair or exploitatively high levels.

He then goes on to argue that the moral condemnation that we commonly see with regard to "price gouging" is largely unjustified. He makes his argument in three steps by rebutting three widely held beliefs about the ethics of price gouging, namely,

1) that laws prohibiting price gouging are morally justified,
2) that price gouging is morally impermissible behavior, even if it ought not be illegal, and
3) that price gouging reflects poorly on the moral character of those who engage in it, even if the act itself is not morally impermissible.

At Knowledge Problem, Michael Giberson argues that Zwolinski's

... position emerges from a basic understanding of economics, and particularly the role of prices in society. Zwolinski argues that anti-price gouging laws work to prevent individuals already in a vulnerable position from entering into what would be a beneficial exchange. Further, drawing on Hayekian notions about prices as information and coordination devices, Zwolinski asserts that anti-price gouging laws discourage extraordinary (or perhaps even ordinary) efforts to aid persons in need, because the laws interfere with information about scarcity and reduce incentives to act.