Different River

”You can never step in the same river twice.” –Heraclitus

November 18, 2005

Modern “Economics” and Price Gouging

Filed under: — Different River @ 4:08 pm

OK, so I’ve been following the news, and the (mostly) liberal commentators, and so on, and the radio, and I’ve yet again noticed that to be right-thinking (or should that be “left-thinking”) these days, you need to believe two completely contradictory things:

  1. When the price of oil goes up and Exxon/Mobil charges more for gasoline, this is “price-gouging.” In other words, Exxon/Mobil is evil because they charge high prices.
  2. When Wal-Mart uses its volume-buying power and a super-efficient distribution system to charge low prices, this is bad because it runs “mom and pop” stores out of business. In other words, Wal-Mart is evil because they charge low prices.

I wonder — if a huge oil company like Exxon/Mobil charged low prices at a time like this, would they be excoriated for running “mom and pop” gas stations out of business? Because it would have that effect. In fact, it is precisely for this reason that the state of Wisconsin has a law mandating minimum gas prices. In Wisconsin, price-gouging is manadatory! (If it’s illegal too, that really puts the gas stations in a bind!)

And if Wal-Mart charged higher prices to avoid running runs “mom and pop” stores out of business, would they be excoriated for “price-gouging”? After all, they’d still have lower costs, so they’d be making huge per-unit profits. (Probably less profit total, since they’d sell fewer items, but they’d make more per item on those fewer items.)

The 2005 Weblog Awards

Filed under: — Different River @ 3:10 pm

Nominations are open for the 2005 Weblog Awards.

Not like I’m hinting or anything. ;-)

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