|
Posted by A. B. Dada on December 23rd, 2005
My state’s Attorney General, Lisa Madigan, has a long time family history of politics. She’s a crony and reckless with taxpayer dollars, and her voice shouldn’t be considered a powerful or true voice — but it is.
In Illinois major media news today, Lisa Madigan is blackmailing 18 gas stations, forcing them to give money to another group of people or get sued. She is using her political clout to gain media attention and make it seem as though she is pro-consumer.
Price gouging is a fallacy, a myth. It does not exist in a free market. As I have said in previous posts, price gouging saves consumers and doesn’t hurt them.
If a gas station finds its supply of gas cut off for any reason (usually a natural disaster or war), they have no ability to tell their employees, landlords and utility companies that they can’t pay their overhead. Bills must be paid, on time. When a gas station feels that they may be limited or cut off entirely from their product, the must instantly change the price of the product they do have in stock in order to raise the profit so that they can weather the supply shortage.
The reason price gouging is fair is that it almost always comes from a natural disaster: this affects the supply of all companies selling the product. If one gas station out of 10 in your town wanted to triple gas prices, the other gas stations would gain customers. No one is going to pay $5 per gallon if other stations are selling it for $2.50 per gallon.
The first complaint you’ll hear from anti-freedom advocates is that gas stations can collude to raise the price. This can be true, but competitive freedom will allow another company to open up and rake in the market. Collusion only can exist when it is very very hard to enter the market. The number one deterrent to entering the gas station business is most cities have terrible regulations and zoning rules regarding who can open a gas station. In a few towns where I have had businesses, the gas station owners are generally cronies of the politicians — if you’re not a friend or family, good luck in getting a business license.
Today’s Noon Anarchocapitalist News will cover price gouging reports from all over the world, and I’ll try to back up why the prices went up. If you feel someone is gouging you “illegaly” just go shop elsewhere. There is no need for government to blackmail companies into lowering prices — all you’ll get in the end is no gas station to buy from.