When a large scale tragedy strikes an area (such as a hurricane, earthquake, etc), business owners may decide to raise the prices of the goods and services that they provide. At times there may be a “legitimate” reason for the higher prices – such as an increase in costs. Other times business owners may just see an opportunity to increase their margins and generate more profits. Whether or not a business owner should raise their prices in a time of time of need is a question that varies based upon the circumstances. The issue I wanted to address is whether force should be used to stop business owners from “price gouging” during these times of emergency.
I just recently finished reading The Long Winter – the 6th book in the Little House on the Prairie series – where this issue is addressed beautifully. Due to a long winter of snow and storms, the people in the town of De Smet are at the point of starving. Suddenly the shop owner in town has a large supply of wheat at his disposal and rather than selling it for the normal mark-up amount above costs, he decides to sell each bushel for over two times what he paid.
After Loftus, the store owner, states “That wheat’s mine and I’ve got a right to charge any prices I want to for it.” Pa Ingalls responds:
“That’s so, Loftus, you have,”…”This is a free country and every man’s got a right to do as he pleases with his own property.” He said to the crowd, “You know that’s a fact, boys”.
Pa Ingalls approached this situation with a much deeper understanding and respect of our God-given rights than those in the town who wanted to force the business owner to sell the wheat to them at a “reasonable” profit. He realized that this wheat was the property of the business owner and so the business owner could sell it at any price he desired. Using force to get the wheat from him at a lower price would have violated one of the fundamental tenants of America.
However, Pa decided to use persuasion to get the store owner to lower the price. In addition to petitioning the humanitarian side of the business owner, Pa also goes on to state:
Don’t forget every one of us is free and independent, Loftus. This winter won’t last forever and maybe you want us to go on doing business after it’s over… You’ve got us down now. That’s your business, as you say. But your business depends on our good will. You maybe don’t notice that now, but along next summer you’ll likely notice it.
Loftus decided to sell the wheat at cost, due to persuasion and not force.
When we see “price gouging” in the world, rather than petition government to punish the property owners for their “crime”, we should rather follow Pa Ingalls example of respecting our God-given right to property and use persuasion to attain lower prices. If the property owner persists with the higher price, we can exercise our God-given right to take our business elsewhere in the future when more options are available to us once again.