The Myth of "Price-Gouging"

The recent announcement of record profits by ExxonMobil and Chevron has revived widespread claims that these profits were extracted by "price gouging." Thus, the stage is set for Washington to pass a federal law banning "price gouging." Senate Majority Leader Bill Frist, for his part, has promised that "if the facts warrant it, I will support a federal anti-price gouging law."

But there are no facts that could warrant such a law, because there is no such thing as "price gouging" by private businesses.

The term "price gouging" implies that gas stations have an ability to forcibly inflict harm on us--but they do not. Any price we pay for a gallon of gasoline--whether $1 or $3--we pay voluntarily, based on the value of the gasoline to us. If we think we are spending too much on gasoline, we are free to drive less, to buy more fuel-efficient cars, to use carpools or busses, or to travel by bicycle or on foot. Gas station owners cannot force us to buy gasoline; they can only offer us a trade, which we are free to accept or reject.

But, one might ask, without anti-"price gouging" laws won't owners of gasoline charge the absolute highest prices they can? Absolutely, and they have every moral right to do so--just as consumers of gasoline have every right to pay the lowest prices they can find. Gas station owners are not our servants. They are producers who spend money, exert effort, and assume risk to bring a product to market. They own the gasoline they sell, and like any property owner they should be free to set the terms of sale.

The person who annoys me the most on this is O'Reilly. I love O'Reilly but I just don't understand his crusade to have oil companies "give back" to the American people. Why not ask Walmart to give back? Or Dell?

1 posted on 02/20/2006 4:23:08 PM PST by Sam Gamgee

I really like Bill too but on the SUV thing he is on the side of the kooks.

2 posted on 02/20/2006 4:31:54 PM PST by somemoreequalthanothers (All for the betterment of "the state", comrade)

Why not ask Walmart to give back? Or Dell?

Or Bill O'Reilly?

3 posted on 02/20/2006 4:45:26 PM PST by infidel29 ("We are all born ignorant, but one must work hard to remain stupid." --Benjamin Franklin)

Or the government? After all, it is they who make more on a gallon of gasoline than the oil companies.

4 posted on 02/20/2006 4:46:58 PM PST by infidel29 ("We are all born ignorant, but one must work hard to remain stupid." --Benjamin Franklin)

BOR tries to act like this populist hero when he is just a loudmouth and a fool with strong opinions.

5 posted on 02/20/2006 4:52:56 PM PST by satchmodog9 (Most people stand on the tracks and never even hear the train coming)

Good point.

6 posted on 02/20/2006 8:23:23 PM PST by Sam Gamgee (May God have mercy upon my enemies, because I won't. - Patton)

Yes, fiscal conservatives would agree totally with that statement.

7 posted on 02/20/2006 8:24:17 PM PST by Sam Gamgee (May God have mercy upon my enemies, because I won't. - Patton)

Yes, that is criticism as well for Pat Buchanan. Pat unfortunately has now become wrong on most issues.

8 posted on 02/20/2006 8:25:02 PM PST by Sam Gamgee (May God have mercy upon my enemies, because I won't. - Patton)

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