# Resolved: Price-gouging shouldn't be discouraged when the government isn't rationing **URL:** \ **Category:** Great Debates\ **Created:** [May 16, 2021, 1:52pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219 "2021-05-16T13:52:52Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [May 16, 2021, 4:58pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/21 "2021-05-16T16:58:14Z")
> [@HMS\_Irruncible](#): > > Shouldn’t suppliers be compensated for continuing to serve angry people in a crisis instead of just closing up shop and letting it be someone else’s problem? They can continue to be compensated at the rate they set prior to the crisis, IMO. That’s what people mean when they say they don’t want a crisis to be exploited. The only hospital in 5,000 km advertises a surgical procedure for $100. Person A goes there _needing_ that procedure or they will die. Hospital then tells them the price is now $100,000. Is that okay, in your opinion? Alos, no commercial for-profit corporation “serves” the public. Such entities are sociopathic non-humans with potentially eternal lifespans; relying on them to act in the best interests of people is ridiculous. Left alone they serve themselves and no other. ---
**Author:** ![DPRK](https://avatars.discourse-cdn.com/v4/letter/d/4491bb/32.png) [@DPRK](https://boards.straightdope.com/u/DPRK)\ **Post date:** [May 16, 2021, 5:00pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/22 "2021-05-16T17:00:55Z")
If prices are high (gasoline is, what, about $7.80 per gallon now in Norway?), then they are simply high, A-OK. But what is so great about actual gouging? In a real live shortage, I presume they would hand out ration cards, outlaw pleasure driving, etc., like they did before. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 16, 2021, 5:01pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/23 "2021-05-16T17:01:00Z")
> [@HMS\_Irruncible](#): > > I was trying to avoid a hijack, but I was hinting at eliminating fossil fuel dependency forever. At least at the consumer retail level. I mean, I can’t disagree with that. > [@HMS\_Irruncible](#): > > Well, right. You seem to be saying that it’s ineffective as a signal to _producers_ , but I am talking mainly about the signal to _consumers_ . As in, “this is how scarce gas is right now. You should cut consumption unless you’re desperate. Right, but what if you _are_ desperate, and you cannot afford it? I would be pretty hard pressed to reduce my consumption without it severely impacting my life. > [@HMS\_Irruncible](#): > > You should eliminate unnecessary trips. If you’re in the market for a car, remember this while you’re evaluating the true ongoing cost of driving a gas burner.” One problem is that people don’t just buy cars during a gas shortage. The other problem is that many of the people who buy SUV’s and the like are insulated from price hikes. They can afford to buy gas at nearly any price. Another problem is that there is not an affordable alternative to gas burners. I can pick up a used ICE car for $10-15,000 or so. An EV car costs at least twice that. Those who can least afford to switch from ICE to EV are those who are most affected by price increases. > [@HMS\_Irruncible](#): > > Consumer signaling is important because consumer behavior turned this supply shock into a crisis, as it often does. I’d blame the media more, personally. It’s a pretty standard and predictable act to try to get something before it runs out. > [@HMS\_Irruncible](#): > > And it’s more effective than the president wagging his finger and telling you to be on your best behavior. This is true, but this is also not what has happened. > [@HMS\_Irruncible](#): > > With price controls and rationing, the signal is “do whatever you want, the government will fix it.” I don’t know that this follows. Rationing means that you cannot do whatever you want. > [@HMS\_Irruncible](#): > > I support that when matters are beyond the consumer’s control, but _none_ of this panic buying was beyond the consumer’s control. It was beyond _my_ control. It was beyond the control of any _individual_ consumer who was not filling up loads of gas containers or plastic bags. Punishing the individual for the collective actions of others strikes me as counterproductive at best. > [@HMS\_Irruncible](#): > > I’m no expert on incentives for critical businesses, but I would hope the businesses who caused this fuckup will be fined enough to claw back any excess profits arising from the event (and then some). If that’s not a law, then it could be. They were hacked by a foreign government. There’s little difference, in my mind, between this and Russia dropping a bomb on the supply line. (other than being a bit less messy and easier to get back into operation, of course.) Who is to be fined? But, assuming that this was not the case, would you fine them because their pumps in the pipeline broke and needed a week to be replaced? > [@HMS\_Irruncible](#): > > And, needless to say, if gas profiteering caused enough consumers to switch to electric cars, obviously that’s a big downside that petrol companies would have in mind as well. I’m sure they’ll be fine. If not a single new ICE was bought in the US, there would still be a couple hundred million on the streets for the next couple decades. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 16, 2021, 5:12pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/24 "2021-05-16T17:12:53Z")
> [@HMS\_Irruncible](#): > > Hmm… you must have missed all the news reports of people filling every available container including laundry hampers lined with trash bags. People were hoarding, well beyond an early fill, it’s really not debatable. No, I did see such idiots. However, these people stand out because they are idiots, and you see them rather than the 50 people behind them just looking to fill their tank to get through the week. > [@HMS\_Irruncible](#): > > I’d say just let the price rise to whatever level is driven by demand. We don’t even really _know_ what the relative demand was because of distorted prices, but with people filling every available container to turn a black-market buck, we can surmise the price wasn’t high enough. So only the wealthy can afford to get to work? > [@HMS\_Irruncible](#): > > One thing I do know is that, thanks to the hoarding, some folks faced calling off work because there was _no gas whatsoever to be purchased_ . By contrast, if we knew prices reflected actual scarcity, then employers would understand the situation enough to make the right call. The government (or at least Georgia’s government) wrecked that with its dumb populist price controls. Right, but increasing the price wouldn’t have done anything about it. The people who hoarded would still have hoarded. The only thing that would have kept gas in the pumps is rationing, and you don’t need price gouging to ration. > [@HMS\_Irruncible](#): > > No, that was an idealized aspirational “good response”, and is achievable if someone made it a priority. Electronic EBT cards exist, they have all sorts of conditions attached to them, it’s not outside the realm of possibility. I don’t know that it would be possible to get this done in the week or so that this crisis will persist, no matter the priority. Who gets it and how much alone will be a month of negotiation. And it’s not just people that have EBT cards that may need gas and may not be able to afford $20 a gallon for it. > [@HMS\_Irruncible](#): > > But if such a response is impossible, then I’d prefer _no_ response over consumer price controls. Those made it worse in every case. I prefer rationing to price gouging. I’m not sure where this belongs in the thread, but it _does_ belong in the thread: I saw a post on reddit, probably apocryphal, that told a story of a pizza party. There were two types of people, those who took one piece, and those who took three. Both explained their behavior as being concerned that there wouldn’t be enough pizza for everyone. ---
**Author:** ![SCAdian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/scadian/32/3292_2.png) [@SCAdian](https://boards.straightdope.com/u/SCAdian)\ **Post date:** [May 16, 2021, 5:18pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/25 "2021-05-16T17:18:19Z")
> [@k9bfriender](#): > > The idea is that rather than filling up on Monday like usual, I rush out and fill up now. I’m not buying an excessive amount of product In fact, filling up a few days early probably means that you’ll be buying a gallon or few less than you would if you waited. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [May 16, 2021, 5:24pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/26 "2021-05-16T17:24:59Z")
I wonder how much extra it would cost to divert trucks, ships\*, and fuel from farther west. It’s not like the country doesn’t have enough fuel. Anyone know If there are rules against interstate transport of full fuel jerrycans in a pickup? \*Assuming the Jones Act left us with any. ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [May 16, 2021, 5:28pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/27 "2021-05-16T17:28:21Z")
> [@k9bfriender](#): > > Right, but increasing the price wouldn’t have done anything about it. The people who hoarded would still have hoarded. You’ve said this twice now, and I don’t see how it makes logical sense to say that people are going to buy stuff they don’t need at _any_ price. Maybe they’d hoard pints instead of gallons, but can you honestly say price would have no impact? > [@k9bfriender](#): > > I saw a post on reddit, probably apocryphal, that told a story of a pizza party. There were two types of people, those who took one piece, and those who took three. Both explained their behavior as being concerned that there wouldn’t be enough pizza for everyone. Did the apocryphal story mention the price of the pizza? TBH I’m confused how most of your responses seem to assume that prices don’t matter and would have no impact whatsoever, yet also you’d be entirely unable to function if the price of gas went up precipitously. This is contrary to everything we understand about economics. > [@k9bfriender](#): > > So only the wealthy can afford to get to work? Around where I live, multiple gas stations were entirely _sold out_ of gas. _Nobody_ could have enough to get to work at any price. If your scenarios are: 1. This week’s commute is going to cost $400 dollars, I need to make some tough decisions, or 2. I can’t work at all this week because all the gas has been bought. Others made the decision for me before I ever got out of bed. Obviously both scenarios suck, but wouldn’t you prefer the one where there’s at least _some_ path to get what you need? You keep bringing up rationing, and I’ll point out rationing is also a fine answer, which is why I conspicuously put that caveat in the OP to avoid the distraction. Rationing is great! It also seems to be politically radioactive for whatever reason. As do high prices. Politics suck. As a parting thought, folks keep saying “the wealthy can afford to buy gas no matter what.” I stipulate there’s some unfairness in that, but I’d also stipulate that: 1. If prices are self-regulated by necessity of consumption, they won’t go up THAT much 2. The extremely wealthy aren’t that numerous. There is an extremely small number of people who will buy gas at _any_ price, and they’re not out there filling up Suburbans. They’ll just stay home for a few days or take a helicopter or whatever rich people do. 3. The bourgeois wealthy don’t want to get gouged any more than we do, and are going to say “I’m not paying $600 fucking dollars for gas, I’ll just work from home/call in sick/cut my hours” or whatever. They have options. ---
**Author:** ![mikecurtis](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mikecurtis/32/3284_2.png) [@mikecurtis](https://boards.straightdope.com/u/mikecurtis)\ **Post date:** [May 16, 2021, 5:49pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/28 "2021-05-16T17:49:45Z")
You all are debating this as if it’s somehow the consumers fault, and therefore a penalty should apply to them, in the form of higher prices or shortages. What responsibility do manufacturers and wholesalers have in these scenarios? A sudden spike in demand or an entirely foreseeable disruption in the supply chain shouldn’t become a burden on consumers. There needs to be a mechanism to hold the providers responsible in these types of situations. Where’s their penalty? Where’s their price increase? ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 16, 2021, 5:53pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/29 "2021-05-16T17:53:46Z")
> [@HMS\_Irruncible](#): > > You’ve said this twice now, and I don’t see how it makes logical sense to say that people are going to buy stuff they don’t need at _any_ price. Maybe they’d hoard pints instead of gallons, but can you honestly say price would have no impact? To many of us, yes. To some of us, no. And it is that some who both end up taking all the gas, and ensuring that we cannot afford whatever’s left. > [@HMS\_Irruncible](#): > > Did the apocryphal story mention the price of the pizza? TBH I’m confused how most of your responses seem to assume that prices don’t matter and would have no impact whatsoever, yet also you’d be entirely unable to function if the price of gas went up precipitously. This is contrary to everything we understand about economics. I’m not sure where I am losing you, to be honest. If in the story of pizza, they were limited to one piece, then there’d be enough for everyone. I never said that they don’t matter and have no impact whatsoever, and I’m not sure where you get that impression. What I _am_ saying is that they don’t matter nearly as much to those who are most insulated from the prices, and they certainly impact those who cannot afford the higher prices. > [@HMS\_Irruncible](#): > > Around where I live, multiple gas stations were entirely _sold out_ of gas. _Nobody_ could have enough to get to work at any price. > > If your scenarios are: > > 1. This week’s commute is going to cost $400 dollars, I need to make some tough decisions, or > 2. I can’t work at all this week because all the gas has been bought. Others made the decision for me before I ever got out of bed. I’m not sure why you are limiting it to those two options. But we’ll tackle them one at a time. 1. This week’s commute is going to cost $400. I cannot afford both that and rent. I need to make a tough decision between staying employed and staying with a roof over my head. 2. Not only would it cost $400 to buy gas for the week, it’s all already been bought anyway. You keep ignoring the alternative, which I keep mentioning. 1. I can only buy 10 gallons of gas this week, fortunately, as long as I am careful and conservative on trips, that’s enough to get me through. > [@HMS\_Irruncible](#): > > Obviously both scenarios suck, but wouldn’t you prefer the one where there’s at least _some_ path to get what you need? If it’s not a viable path, it’s not really a path at all. > [@HMS\_Irruncible](#): > > You keep bringing up rationing, and I’ll point out rationing is also a fine answer, which is why I conspicuously put that caveat in the OP to avoid the distraction. Rationing is great! It also seems to be politically radioactive for whatever reason. As do high prices. Politics suck. Yes, I do, and I say that it is the prefered method of dealing with this situation. I don’t know that it has to be politically radioactive, it doesn’t even have to be mandated by the govt itself. The govt mandates a price ceiling, then allows private businesses to put in ration amounts, while giving the the legal backing to enforce them. > [@HMS\_Irruncible](#): > > As a parting thought, folks keep saying “the wealthy can afford to buy gas no matter what.” I stipulate there’s some unfairness in that, but I’d also stipulate that: > [@HMS\_Irruncible](#): > > If prices are self-regulated by necessity of consumption, they won’t go up THAT much Why not? It’s very inelastic, and people will pay whatever they can afford to be able to buy it. I don’t think we are getting to $500 a gallon or anything, but $20 or so a gallon, sure. > [@HMS\_Irruncible](#): > > The extremely wealthy aren’t that numerous. There is an extremely small number of people who will buy gas at _any_ price, and they’re not out there filling up Suburbans. They’ll just stay home for a few days or take a helicopter or whatever rich people do. We’re not talking Jeff Bezos wealth, we are talking 1% wealth, which, by definition, make up about 1% of us. That’s a fairly large number. If you are in the 1%, then you get annoyed by $20 a gallon gas, but you aren’t priced out of it. (BTW, helicopters use gas too.) > [@HMS\_Irruncible](#): > > The bourgeois wealthy don’t want to get gouged any more than we do, and are going to say “I’m not paying $600 fucking dollars for gas, I’ll just work from home/call in sick/cut my hours” or whatever. They have options. Yes, they do have options, unlike those of us that need that gas to get to work. But, what they also have is the option to purchase that gas at a much higher price than I can, leaving me without. ---
**Author:** ![JRDelirious](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jrdelirious/32/9531_2.png) [@JRDelirious](https://boards.straightdope.com/u/JRDelirious)\ **Post date:** [May 16, 2021, 6:05pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/30 "2021-05-16T18:05:09Z")
> [@SCAdian](#): > > In fact, filling up a few days early probably means that you’ll be buying a gallon or few less than you would if you waited. Except that this now meant point demand was (Whatever normal demand is today) + [(X-a few gallons)\*(number of people rush-buying)] = enough to run you out before the now-delayed next resupply. And then down the road the next visit will be to get _more_ than usual, likely before the resupply chain is completely up to speed again. I am doing fine here since I normally do not let myself get far below full fueling and had filled up just before the news hit, and don’t burnn that much to begin with, so mere reduction in unnecessary diriving can easily keep me ok going into next week. But I can see how someone who _needs_ to keep driving just as much as before would be in a dire state if they don’t know when the next fill is coming. > [@k9bfriender](#): > > I don’t know that it has to be politically radioactive, it doesn’t even have to be mandated by the govt itself. The govt mandates a price ceiling, then allows private businesses to put in ration amounts, while giving the the legal backing to enforce them. Voters are often not rational. You and I and **HMS\_Irruncible** can come up with strategies, voters only see “I’m paying more”. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [May 16, 2021, 7:52pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/31 "2021-05-16T19:52:29Z")
> [@mikecurtis](#): > > You all are debating this as if it’s somehow the consumers fault, and therefore a penalty should apply to them, in the form of higher prices or shortages. Nobody is debating fault or penalties. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [May 16, 2021, 8:03pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/32 "2021-05-16T20:03:58Z")
Keep in mind, everyone, that it’s not like there isn’t gas to be had (the refineries all work), it’s just that it’s been expensive to move. The elasticity of demand may be low (but not zero), but we also have the elasticity of supply to contend with. You can make it worth someone’s while to move fuel. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 16, 2021, 8:13pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/33 "2021-05-16T20:13:36Z")
Do you mean people filling up 5 gallon containers in the midwest and taking it to the coast? Lack of gas truck drivers is part of the problem already. > **[Lack of tanker truck drivers to deliver fuel compounds gas shortages in DMV](https://www.wusa9.com/article/traffic/gas-prices/gas-tanker-truck-fuel-shortage-gas-stations/65-05194b39-9663-45ef-94be-44dafaf61b44)** > > The DMV has been hit particularly hard by the ongoing gas shortage concerns, following a cyberattack over the weekend on the Colonial Pipeline. ---
**Author:** ![nightshadea](https://avatars.discourse-cdn.com/v4/letter/n/7ba0ec/32.png) [@nightshadea](https://boards.straightdope.com/u/nightshadea)\ **Post date:** [May 16, 2021, 8:18pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/34 "2021-05-16T20:18:27Z")
ehh the geniuses around here blame Biden because of shutting down the keystone xl pipeline and if the “Donald” was in the white house he’d give them what for and they’d kneel in fear … that and its all bs designed to just raise prices … ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [May 16, 2021, 8:19pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/35 "2021-05-16T20:19:51Z")
> [@k9bfriender](#): > > I’m not sure where I am losing you, to be honest. If in the story of pizza, they were limited to one piece, then there’d be enough for everyone. I never said that they don’t matter and have no impact whatsoever, and I’m not sure where you get that impression. Because this thread is about the effects of price on consumer behavior, and you dropped an anecdote about consumer behavior in the absence of price. We get it, some people selfishly hoard, others don’t. The question on the table is how do we mitigate that behavior? > [@k9bfriender](#): > > You keep ignoring the alternative, which I keep mentioning. > > 1. I can only buy 10 gallons of gas this week, fortunately, as long as I am careful and conservative on trips, that’s enough to get me through. Ii’m ignoring it because I don’t know what to do with it. Mandatory rationing wasn’t part of the OP. If you’re talking about the self-rationing, you just finished telling a pizza story about why that’s unrealistic. I’m currently living through a reality in which voluntary self-rationing doesn’t seem to be helping at all. Tell me why I shouldn’t ignore this. > [@k9bfriender](#): > > If it’s not a viable path, it’s not really a path at all. You just finished making a point that some people could voluntarily reduce their consumption. If that’s true, then of course it’s a viable path. Just because you find it _unpalatable_ doesn’t mean it’s unviable. The only thing missing is an incentive, and I argue that price is that incentive. > [@k9bfriender](#): > > Yes, I do, and I say that it is the prefered method of dealing with this situation. I don’t know that it has to be politically radioactive, it doesn’t even have to be mandated by the govt itself. The govt mandates a price ceiling, then allows private businesses to put in ration amounts, while giving the the legal backing to enforce them. Again, the title of this OP is about what we do literally “when the government isn’t rationing”, so your description of a government-mediated rationing scheme doesn’t really fit here. > [@k9bfriender](#): > > Yes, they do have options, unlike those of us that need that gas to get to work. But, what they also have is the option to purchase that gas at a much higher price than I can, leaving me without. I have to keep hammering on this point: you are better off buying 10 gallons of gas at $10 a gallon than zero gallons of gas at $3. Yes, at $10 a gallon the fat cats will be blissfully unimpeded, but a lot of other people are going to reevaluate exactly how much they need that mileage. Fuel demand for driving is fairly inelastic, yes, but not totally inelastic. However, fuel _hoarding_ is quite elastic. Consumers have choices. Driving prices downward makes them _less_ likely to make hard choices, and more likely to hoard, which is we just saw happening. ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [May 16, 2021, 8:26pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/36 "2021-05-16T20:26:48Z")
> [@mikecurtis](#): > > You all are debating this as if it’s somehow the consumers fault, and therefore a penalty should apply to them, in the form of higher prices or shortages. A lot of people are reading it that way, but it’s not really about that. In an outage situation, where the pipeline isn’t moving product, the availability of gas depends entirely on how consumers behave. It’s one situation if they voluntarily self-ration, it’s another situation if they consume normal amounts, it’s another situation if they go hog-wild and fill up every spare container in the house. Consumers have to be responsible in this kind of situation, and if the government doesn’t enforce rationing, then pricing is the only way to get people to behave. And yes - hoarding is all 100% the consumer’s fault, so it should be very expensive to hoard. > [@mikecurtis](#): > > A sudden spike in demand or an entirely foreseeable disruption in the supply chain shouldn’t become a burden on consumers. The only way to mitigate this is for every point of sale to store a huge reserve in an onsite tank. Apart from not having the real estate to do that, who’s going to pay the cost of maintaining that much reserve? It ends up on consumers. Better for the companies not to have their shit jacked in the first place. > [@mikecurtis](#): > > There needs to be a mechanism to hold the providers responsible in these types of situations. Where’s their penalty? Where’s their price increase? Oh I agree, penalize them into the stratosphere, but that doesn’t put gas in your tank today. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 16, 2021, 8:56pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/37 "2021-05-16T20:56:44Z")
> [@HMS\_Irruncible](#): > > Ii’m ignoring it because I don’t know what to do with it. Mandatory rationing wasn’t part of the OP. 🤨 > [@HMS\_Irruncible](#): > > Absent government-enforced rationing, prices are the _only_ mechanism we have to effectively regulate scarcity. > [@HMS\_Irruncible](#): > > Either forcibly ration supplies, or let prices float. I’m not sure what that’s all about, but it seems that those are part of the OP. I thought you were looking for a discussion as to which was better, rationing or price gouging. If that’s not what this is about, and all it is is an argument supporting price gouging, then I’d say you didn’t word your OP in that direction very well, but I’ll step out if that’s the case. > [@HMS\_Irruncible](#): > > You just finished making a point that some people could voluntarily reduce their consumption. If that’s true, then of course it’s a viable path. Some people, sure. Not all people. I also pointed out that there is little I could do to reduce my consumption, which you apparently ignored. Those who have little to reduce in their consumption will also tend to be those who have little room in their budget to deal with jacked up prices. So, for those who cannot reduce their consumption or afford jacked up prices, it is _not_ a viable path. > [@HMS\_Irruncible](#): > > Again, the title of this OP is about what we do literally “when the government isn’t rationing”, so your description of a government-mediated rationing scheme doesn’t really fit here. Right, I guess I missed your point with your OP. It seemed as though you were criticizing the govt for putting in price controls without rationing. Instead, I suppose you are just encouraging price gouging. > [@HMS\_Irruncible](#): > > I have to keep hammering on this point: you are better off buying 10 gallons of gas at $10 a gallon than zero gallons of gas at $3. You keep hammering, but it doesn’t do any good when it misses the mark by so very very much. If gas is at $10, it will still be hoarded by those who can afford to hoard it. Now, even if you really need gas and you get in line as fast as possible, you still can’t afford it, and if you wait, because you don’t want to be a part of the panic buying, then you can’t get it at all. > [@HMS\_Irruncible](#): > > Fuel demand for driving is fairly inelastic, yes, but not totally inelastic. Pretty close. If I drive very carefully, I may be able to shave off a couple MPG. Maybe at $10 a gallon gas, I do so, and decrease my consumption by 2-3%. That’s not going to solve much. In order for me to drive any less, I’d have to go to work less, and that’s not really an option. > [@HMS\_Irruncible](#): > > However, fuel _hoarding_ is quite elastic. Consumers have choices. The whole reason for hoarding in the first place is an irrational reaction to a perceived shortage. People are _not_ acting rationally, which is what you are depending on for the free market to work this way. If prices start going up, people are going to be just as inclined to hoard gas in the fear that the price will be even higher later. The only way to deal with irrationality in the market place is for a rational actor to come in and take control, and the govt _should_ be the rational actor of last resort. They can fight against the irrationality of hoarding by putting into place rationing systems. > [@HMS\_Irruncible](#): > > And yes - hoarding is all 100% the consumer’s fault, so it should be very expensive to hoard. No, it is 100% the hoarder’s fault. The consumer who just wants to fill their tank so they can get to work this week is not at fault. Not _all_ consumers are hoarding here, in fact, only a small minority are, but in a price gouging scenario, all consumers are punished. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [May 16, 2021, 9:09pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/38 "2021-05-16T21:09:10Z")
> [@k9bfriender](#): > > Do you mean people filling up 5 gallon containers in the midwest and taking it to the coast? > > Lack of gas truck drivers is part of the problem already. Cans are an option; I asked about them above. And per your article, it’s not like the drivers don’t exist: > drivers who were laid off when gas demand crashed during the COVID crisis found easier jobs hauling freight and have not come back despite pay as high as $90,000 per year and good benefits. Clearly the reservation wage for a lot of these folks is higher than $90k. Which may not be sustainable at $3/gal. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 16, 2021, 9:16pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/39 "2021-05-16T21:16:50Z")
> [@Ruken](#): > > Cans are an option; I asked about them above. And per your article, it’s not like the drivers don’t exist: I’d be a bit worried about the safety involved with people filling their SUVs and minivans with gas cans and driving across country. > [@Ruken](#): > > Clearly the reservation wage for a lot of these folks is higher than $90k. Which may not be sustainable at $3/gal Or they may not be tempted back at all for any reasonable wage. ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [May 16, 2021, 9:29pm UTC](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219/40 "2021-05-16T21:29:38Z")
> [@k9bfriender](#): > > I’m not sure what that’s all about, but it seems that those are part of the OP. I thought you were looking for a discussion as to which was better, rationing or price gouging. The title of the OP is “Price-gouging shouldn’t be discouraged when the government isn’t rationing.” It specifically precludes rationing. Everywhere I’ve mentioned rationing in this thread is to remark that it’s a grand idea, but it isn’t part of this hypothetical because it’s heretofore typically not been part of reality. Certainly in this past week it wasn’t. If you’ve taken that to mean “rationing is bad”, I don’t know what to do with that. You can start a thread about “the government should more aggressively ration goods in a shortage situation”, and I’ll cheerfully support that premise. > [@k9bfriender](#): > > I also pointed out that there is little I could do to reduce my consumption, which you apparently ignored. Those who have little to reduce in their consumption will also tend to be those who have little room in their budget to deal with jacked up prices. I ignored it? This is you, right? > [@k9bfriender](#): > > You keep ignoring the alternative, which I keep mentioning. > > 1. I can only buy 10 gallons of gas this week, fortunately, as long as I am careful and conservative on trips, that’s enough to get me through. Not only did I not ignore this, I am now taking notice of it _again_ as you contradict it by stating that your own gas demand is completely inelastic. I’m not ignoring anything, but I am at a loss what to do with your contradictory assertions. > [@k9bfriender](#): > > If gas is at $10, it will still be hoarded by those who can afford to hoard it. I’m gonna need a cite for your repeated evidence-free claim that demand for hoarded gasoline is completely inelastic. Surplus fuel is a marginal concern which means it ought to respond readily to pricing pressure. > [@k9bfriender](#): > > Pretty close. If I drive very carefully, I may be able to shave off a couple MPG. Maybe at $10 a gallon gas, I do so, and decrease my consumption by 2-3%. That’s not going to solve much. > > In order for me to drive any less, I’d have to go to work less, and that’s not really an option. It’s unfortunate if you have zero middle ground between “drive my gas car to work” and “do not work.” This is a common situation, but by no means universal. There’s carpooling, buses, flexible scheduling - I’m sorry those aren’t options for you, but they are options for many people, and we’re talking about people in the aggregate. > [@k9bfriender](#): > > If prices start going up, people are going to be just as inclined to hoard gas in the fear that the price will be even higher later. Again, I dispute this. The hoarding wasn’t all due to fear, we also saw people coldly rationally hoarding to resell at outrageous prices, or simply getting while the getting is good. Return to your pizza story. Some people take more simply because that’s the kind of people they are. They won’t be dissuaded unless you inject a rational incentive into the equation - i.e. some kind of cost. When people are paying for goods, they’re less likely to empty the shelves just because they can. You don’t have to believe consumers are 100% rational to believe that their behavior is often influenced by pricing. > [@k9bfriender](#): > > No, it is 100% the hoarder’s fault. The consumer who just wants to fill their tank so they can get to work this week is not at fault. Potato, potah-to. A hoarder is just a consumer with a different use case for the product. To return to the topic, given that the gods of rationing are sleep at the switch, what do you choose? Do you accept a Russian-roulette situation where you may not get any gas _at all_, or do prefer the least bad choice of getting part of what you want at a higher price? Honestly if your answer is “I prefer zero gas”, or “zero gas and expensive gas are exactly equivalent outcomes”, then I have to assume you’ve invested too much effort in the thread to concede the obvious point. No driver prefers zero gas. We get what we can and make do. [Previous page](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219.md?page=1) [Next page](https://boards.straightdope.com/t/resolved-price-gouging-shouldnt-be-discouraged-when-the-government-isnt-rationing/942219.md?page=3)