Yuck: 2017’s Nobel laureate in economics Richard Thaler opposes price-gouging

In the words of the immortal Dennis Eckersley: yuck!

If you veer away from the 3×5 card of allowable opinion (to quote the legendary Tom Woods), then your chances of ever winning a Nobel prize will greatly diminish. Lamenting on the Federal Reserve, defending the undefendable or arguing against Keynesian dogma, these are factors that will inevitably hurt your odds of becoming a Nobel winner.

Case in point, Richard Thaler, the 2017 Nobel laureate in economics.

According to The Wall Street Journal, Thaler opposed anti-price-gouging laws in Connecticut in 2012. His argument was that companies would not risk their reputations by spiking prices, while one-time entrepreneurs can supply much-needed items at a higher cost in times of crisis.

The newspaper reports:

“Mr. Thaler has unorthodox views in other areas, too. Most economists think companies selling fresh water, food or plywood should raise prices during and immediately after floods or hurricanes. That way, suppliers have an incentive to bring more goods to market, and shoppers have an incentive to buy only what they urgently need, meaning that shelves won’t empty as quickly. Mr. Thaler has found that most people—i.e. non-economists—think it’s unfair to raise prices in such situations.”

Makes sense.

Five years later, however, he has changed his mind on price-gouging. What a convenient time, indeed!

Speaking in an interview with Marketplace, an organization that states capitalism doesn’t care about you, Thaler averred that people should “pitch in” rather than “grab.”

“A time of crisis is a time for us all to pitch in; it’s not a time for us to grab,” he said.

The newspaper’s David Henderson counters that with this point: “True, but the ability to charge high prices encourages more of us to ‘pitch in.'”

Price-gouging is the only socially responsible thing to do during and after a natural disaster. We need more of them and less of anti-price-gouging laws.

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