Hurricane “Price Gouging”
Posted by Eliot Weinstein on September 4, 2005
I have heard references on both CNN and Fox News to the “price gouging” that occurred before and after the disaster of Hurricane Katrina. The Office of the Attorney General of Florida has issued notices reminding citizens that price gouging is illegal and that suspicions of price gouging should be reported via the state hotline.
However prevalent it may be, the common understanding of “price gouging” is inaccurate because it ignores the principles of economics. “Price gouging”, is an emotionally charged term for a process that, unless it involves fraud, is essential to the national well-being. Two articles written in response to last years devastating Florida hurricanes, one by journalist David M. Brown and the other by world-renowned economist Thomas Sowell, explain the popular misconception.
