If the usual pattern holds, opportunistic politicians will soon be out denouncing price-gouging connected with Hurricane Irene, while opportunistic free-market economists will soon be out placing op-ed pieces defending prices as the best way to allocate scarce resources and to assure their delivery when and where they are needed. I went looking for something from Senator Schumer, who rarely misses an occasion to denounce what he sees as rapaciousness in the free enterprise system rather than praising its efficiency. Instead what I found was an article in the Hartford Courant quoting two of the state's laws:
Section 42-230 of the state statutes says that gouging is not permitted on "any retail item in a location which is subject to a disaster emergency declaration issued by the governor," according to Williams. The normal fluctuations in prices are permitted.
Anyone who believes a price has been hiked unreasonably because of the emergency can call the state's Department of Consumer Protection at 1-800-842-2649.
"No seller shall sell or offer energy for an unconscionably excessive price during a period of abnormal market disruption or when an imminent abnormal market disruption is anticipated," Williams said.
In North Carolina, the state attorney general, Roy Cooper, notified businesses and consumers that that state's price-gouging law went into effect because of the state of emergency: "Price gouging—or charging too much in times of crisis—is against North Carolina law when a disaster, an emergency or an abnormal market disruption for critical goods and services is declared or proclaimed by the Governor. The law also applies to all levels of the supply chain from the manufacturer to the distributor to the retailer."
The New York attorney general, Eric Schneiderman, is also getting into the mix, with a letter reminding businesses that state law "forbids those who sell essential consumer goods and services from charging excessive prices during what is clearly an abnormal disruption of the market."
This strikes me as one of those things where self-regulation works pretty well. If a retailer sets a price too high, he may not sell what he wants to sell, and he may alienate customers. On the other hand, forcing retailers to keep prices low might just assure that scarce supplies sell out quickly to hoarders or resellers. That's why you see subjective words such as "unconscionably excessive," "excessive," or "too much" in these statutes, or in descriptions of them by politicians.