The new, broken-pipeline-induced gasoline shortage that’s affecting North Carolina and other southeastern states this week is, of course, not unprecedented. As most will recall, such shortages have arisen before as the result of wars and international relations, natural disasters, weather and the ebbs and flows of the economy. Such events are, in other words, to be expected.
Let’s hope this episode is a brief one and that the gasoline sellers who have product on hand resist the temptation to take advantage of their fellow citizens through price gouging. Unfortunately, news reports indicate that many are giving in to that temptation. WNCT.com reports that “more than 400 consumers have filed complaints online or via a toll-free hotline to report potential gas price gouging to North Carolina’s Consumer Protection Division.” Attorney General Cooper says he’ll be going after the sellers who engage in price gouging and good for him. That’s the kind of basic consumer protection that citizens should expect from their government.
Unfortunately, if past performance is any indication, we can expect the denizens of the local right-wing “free market” think tanks to undermine those efforts by defending price gouging and even denying that such a thing exists. Both the John Locke Foundation and Pope-Civitas Institute have a long history of condemning anti-price gouging laws.
Here’s longtime Locker and current Vice President for Research and Resident Scholar Roy Cordato back in 2008 when another shortage afflicted the state after a hurricane:
“From the perspective of economic science, the concept of ‘price gouging’ or ‘extreme pricing’ or ‘unreasonable pricing has no meaning. In reality the main purpose of a price-gouging law is to punish sellers who might be pricing according to actual supply-and-demand conditions. If a seller is charging a price that is truly extreme, higher than buyers are willing to pay, he will make either no sales or fewer sales than he would ideally like to make given his inventory.”
In other words, as the Pope-Civitas staff argued that same year in an attack on Cooper entitled “There Is No Such Thing As Price Gouging”:
“1. It’s not the government’s gas station. Station owners should be able to charge anything they want.
2. Price reflects supply and demand. If the station owners kept the prices artificially low, they would have run out of gas more quickly. (This is, in fact, what happened under N.C.’s stupid ‘gouging’ laws.)”
There haven’t been many missives from the two groups on the subject in recent years, but in 2014, the Locke people highlighted Cordato being cited as a critic of anti-gouging laws in a News & Observer story on the subject. Let’s hope that the passage of time has provided the Pope groups an opportunity to rethink this particular aspect of the their extreme, market fundamentalist belief system.
Given, however, that yesterday’s Locke Foundation “Shaftsbury Society” luncheon was entitled “Markets Without Limits,” we’re not gettiing our hopes up too high.