Why Horwitz Opposed Laws that Barred Price Gouging

Horwitz is opposed to laws that prohibit price gouging for three main reasons. Firstly Horwitz believes that laws against price gouging cause shortages in these areas. That is to say that these shortages are not caused by the disaster itself, but by the fact that prices are not allowed to fluctuate, muddling up the correlation between supply and demand. Another reason Horwitz is opposed to laws against price gouging is that price gouging makes those in the inflicted area prioritize their needs. Due to the rise in prices these people are going to avoid paying for items that they do not view as necessities. Finally Horwitz claims that the natural rise in price after a disaster incentivizes producers to provide the needed items to the inflicted area. Therefore, by prohibiting price gouging we are only making it harder for those in inflicted areas to purchase the goods they need. Horwitz argument is laws prohibiting price gouging are meant to make goods more available to those who need it, (Premise 1) price gouging actually helps those in inflicted areas receive the goods they need, (Premise 2) therefore we should not prohibit price gouging. (Conclusion)

Though convincing, there are some issues with this argument. The main problem I find with this argument is found in Premise 2. I believe that Horwitz argument is founded on the idea that those in the inflicted areas have the means to purchase these goods at an increased price, but they simply find in inconvenient to do so. Horwitz seems to ignore the fact that many of these people just lost most of their property in a devastating storm. Therefore, price gouging is not only driving market prices, it is keeping individuals from being able to purchase the basic necessities of life. Horwitz argument is convincing in the instance that those in the inflicted area are some-what able to pay for the increased price due to price gouging. However, in the case of Hurricane Sandy and similar disasters it is evident that these people aren’t able to pay for these goods even if they wanted to.