Could price gouging during a crisis actually be moral?
Price gouging is prohibited in 34 US states and Washington D.C. But two scholars ask whether that's the way it should be.
- Paper products, hand sanitizer, masks, and cleaning wipes—all are in high demand and short supply during the COVID-19 crisis.
- Price gougers are viewed as villains in this crisis—but two scholars argue that price gouging is, in most cases, morally permissible.
- Increased prices prevent unnecessary hoarding. Buyers purchase only what they need when they need it. Also, producers are incentivized to make more. When the supply rises, prices will fall.
At the Safeway grocery store in Southwest Washington, D.C., the toilet paper and paper towels section has been empty for most of the last two months. When the store does restock, supplies don't last long on the shelves. "Do you know if they have paper towels?" a pedestrian outside the store asked a stranger exiting the Safeway in late April. The answer was no: "Still out."
Paper products, hand sanitizer, masks, and cleaning wipes—all are in high demand and short supply during the COVID-19 crisis. Shoppers across the country are facing empty shelves and out-of-stock signs.
But any seller who reacts to current crisis conditions by increasing prices on in-demand products may be committing a crime. Thirty-four states have laws against price gouging. In March, a bipartisan group of state attorneys general wrote a letter urging online marketplaces to crack down on price spikes.
"[W]hile we appreciate reports of the efforts made by platforms and online retailers to crack down on price gouging as the American community faces an unprecedented public health crisis, we are calling on you to do more at a time that requires national unity," the letter said.
A price gouger makes a good temporary boogeyman. One could look at high prices during an emergency and think: They're trying to profit off of my desperation.
What exactly is price gouging, and what distinguishes it from a normal price increase? New York Attorney General Letitia James told NPR that "there's no definitive answer" but "you know it when you see it—[it's] when individuals are taking advantage of the market, particularly when a neighboring store is selling the same product for much less." New York's price gouging complaint form, which consumers can use to report retailers, defines it as "unconscionably excessive pricing of necessary consumer goods and services during any abnormal disruption of the market." However different states might define it, price gouging is widely understood to be exploitative, sleazy, and heartless. Laws against it are popular.
But Michael Munger, professor of political science at Duke University, says that high prices are a crucial part of dealing with scarcity during an emergency.
"If you use the police to keep prices artificially low, it makes the problem of scarcity much worse," Munger says in a short Institute for Humane Studies video on price gouging. Price gouging during an emergency allows more people to get what they need as soon as possible. "And that's true even for those who can't afford the gouger's prices," Munger explains.
How? Increased prices prevent unnecessary hoarding. Buyers purchase only what they need when they need it. Also, producers are incentivized to make more. When the supply rises, prices will fall.
"Price gouging laws keep the shelves empty longer," Munger says.
Matt Zwolinski, professor of philosophy at the University of San Diego, argues in his paper "The Ethics of Price Gouging" that "most, though not all, cases of price gouging are at least morally permissible, if not morally praise-worthy."
"Relative to the baseline of no exchange at all, the gouger's proposal stands to improve the lot of the buyer, not to worsen it," Zwolinski writes. If a buyer purchases a product at an exceptionally high price during an emergency, the buyer has decided that their emergency need justifies the high price. As Zwolinski puts it: "[W]hile the price of generators might rise dramatically in the wake of a disaster which knocks out power to a certain population, so too does the need people have for generators." A seller who raises prices did not create the buyer's increased need; he or she is merely reacting to it.
This doesn't mean, of course, that the price gouger is motivated by altruism. "[T]he fact that there are good arguments to be made for the moral permissibility of price gouging in certain cases does not mean that those who actually engage in the practice are motivated by these considerations," Zwolinski writes. But that's also true of normal market activity: As Adam Smith says in The Wealth of Nations, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." A price gouger makes a good temporary boogeyman. One could look at high prices during an emergency and think: They're trying to profit off of my desperation.
But if we heed the work of scholars like Michael Munger and Matt Zwolinski, we might begin to see price gouging as a rational and necessary part of emergency response. During normal times, a pack of hand sanitizer might cost the same as a bottle of red wine. But right now, during the COVID-19 pandemic, does anyone place nearly the same value on a bottle of wine as on a pack of hand sanitizer? By using the law to forcefully keep prices below what people would pay in an emergency, states enable hoarding. For Americans who would like to buy hand sanitizer—or paper towels, toilet paper, cleaning wipes, or masks—and can't find any, price gouging laws are a cold comfort. Most would rather have the option of paying increased prices than no options at all.
We look back at a year ravaged by a global pandemic, economic downturn, political turmoil and the ever-worsening climate crisis.
Billions are at risk of missing out on the digital leap forward, as growing disparities challenge the social fabric.
Image: Global Risks Report 2021<h3>Widespread effects</h3><p>"The immediate human and economic costs of COVID-19 are severe," the report says. "They threaten to scale back years of progress on reducing global poverty and inequality and further damage social cohesion and global cooperation."</p><p>For those reasons, the pandemic demonstrates why infectious diseases hits the top of the impact list. Not only has COVID-19 led to widespread loss of life, it is holding back economic development in some of the poorest parts of the world, while amplifying wealth inequalities across the globe.</p><p>At the same time, there are concerns the fight against the pandemic is taking resources away from other critical health challenges - including a <a href="https://www.weforum.org/agenda/2020/09/charts-covid19-malnutrition-educaion-mental-health-children-world/" target="_blank" rel="noopener noreferrer">disruption to measles vaccination programmes</a>.</p>
A new study explains how a chaotic region just outside a black hole's event horizon might provide a virtually endless supply of energy.
- In 1969, the physicist Roger Penrose first proposed a way in which it might be possible to extract energy from a black hole.
- A new study builds upon similar ideas to describe how chaotic magnetic activity in the ergosphere of a black hole may produce vast amounts of energy, which could potentially be harvested.
- The findings suggest that, in the very distant future, it may be possible for a civilization to survive by harnessing the energy of a black hole rather than a star.
The ergosphere<p>The ergosphere is a region just outside a black hole's event horizon, the boundary of a black hole beyond which nothing, not even light, can escape. But light and matter just outside the event horizon, in the ergosphere, would also be affected by the immense gravity of the black hole. Objects in this zone would spin in the same direction as the black hole at incredibly fast speeds, similar to objects floating around the center of a whirlpool.</p><p>The Penrose process states, in simple terms, that an object could enter the ergosphere and break into two pieces. One piece would head toward the event horizon, swallowed by the black hole. But if the other piece managed to escape the ergosphere, it could emerge with more energy than it entered with.</p><p>The movie "Interstellar" provides an example of the Penrose process. Facing a fuel shortage on a deep-space mission, the crew makes a last-ditch effort to return home by entering the ergosphere of a blackhole, ditching part of their spacecraft, and "slingshotting" away from the black hole with vast amounts of energy.</p><p>In a recent study published in the American Physical Society's <a href="https://journals.aps.org/prd/abstract/10.1103/PhysRevD.103.023014" target="_blank" style="">Physical Review D</a><em>, </em>physicists Luca Comisso and Felipe A. Asenjo used similar ideas to describe another way energy could be extracted from a black hole. The idea centers on the magnetic fields of black holes.</p><p style="margin-left: 20px;">"Black holes are commonly surrounded by a hot 'soup' of plasma particles that carry a magnetic field," Comisso, a research scientist at Columbia University and lead study author, told <a href="https://news.columbia.edu/energy-particles-magnetic-fields-black-holes" target="_blank" rel="noopener noreferrer">Columbia News</a>.</p>
Event Horizon Telescope Collaboration<p>While there might not be immediate applications for the theory, it could help scientists better understand and observe black holes. On an abstract level, the findings may expand the limits of what scientists imagine is possible in deep space.</p><p style="margin-left: 20px;">"Thousands or millions of years from now, humanity might be able to survive around a black hole without harnessing energy from stars," Comisso said. "It is essentially a technological problem. If we look at the physics, there is nothing that prevents it."</p>
A popular and longstanding wave of thought in psychology and psychotherapy is that diagnosis is not relevant for practitioners in those fields.
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