Is Price Gouging Immoral? Should It Be Illegal?

Matt Zwolinski

Matt Zwolinski is Professor of Philosophy at the University of San Diego and director of USD’s Center for Ethics, Economics, and Public Policy. He is the editor of Arguing About Political Philosophy and, with Benjamin Ferguson, The Routledge Companion to Libertarianism and Exploitation: Philosophy, Politics, and Economics (both in progress). He is currently writing a book on the history of libertarian thought with John Tomasi, and a book on the idea of a Universal Basic Income with Miranda Perry Fleischer.

If the power goes out during a hurricane, who should be able to get an emergency generator? If sellers knew the motives of each buyer, they could sell a generator to the customer who needs it to keep life-​saving medication from spoiling instead of the customer who wants to watch TV. But sellers aren’t mind readers. One way generators can be allocated efficiently is by allowing the sellers to increase prices in an emergency situation. If the generators that are available cost more than they normally would, the people who would be willing to pay a premium to get one may do so because their need is greater. Many people would say increasing prices on certain goods during such an emergency is “price gouging.” Philosophy professor Matt Zwolinski argues that far from being immoral, price gouging may be the best way to allocate scarce resources in an emergency.

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