Preposterous Universe

 
Jeb Bush, apostate?

"I think it's horrific that people would do that, I don't sense that is the defining element of this storm, though."--Gov. Jeb Bush on post-Charley price gouging in Florida. [SPI]

Some might argue that "price gouging" is an unreasonably pejorative label for free enterprise in its purest form. Catastrophes reduce supply and increase demand. Classical economics suggests that price gouging in the wake of natural disasters is inevitable and even desirable. High prices are said to discourage waste and non-profit hoarding and to increase the flow of goods to stricken zones. Many free market faithfuls also defend the entrepreneur's right to profiteer. They argue that owners are entitled to sell their goods to the highest bidder. The gospel of laissez faire teaches teaches that these entrepreneurs deserve whatever price their goods will fetch. On this view, it is simply wrong to interfere with the seller's right to name her price, regardless of the consequences of her business practices.

Rawls, justice, and desert have become hot topics in the blogosphere. (See Scott Paeth for a thoughtful precis of recent discussions.) Libertarian/objectivist Will Wilkinson has made Reflective Equilibrium a water cooler issue.

Rawls' method of Reflective Equilibrium (RE) can be used to reason about the ethics of price gouging. Rawls argues that we should develop our stance towards gouging (or anti-gouging laws) by scrutinizing our preexisting attitudes towards the practice and attempting to reconcile them. In this case, we feel the pull of two compelling normative claims: a) that property owners are entitled to dispose of their goods as they see fit, and, b) that people who demand exorbitant prices from desperate people act unjustly.

Our laws and public discourse reflect an some uneasy and incomplete middle ground. Florida is one of at least 20 states with anti-gouging laws. (For more details, cf the invaluable Brendan Koerner.)

As usual, Jeb Bush seems slightly unbalanced. As a free market apostle he ought to welcome the wave of free enterprise. Yet, he too recoils at the thought of greedy business owners exploiting desperate citizens. The irony isn't lost on Mark Kleiman:

I can see both sides of the argument; my point here isn't that anti-gouging laws are wrong, but that they ought to be controversial in a way they currently are not, at least among those who consider themselves principled advocates of laisser-faire.

Maybe Jed is just pandering to disgruntled electorate. Maybe he believes that the price gougers are (expendable) red-blooded entrepreneurs. Somehow I doubt that. The Governor seems sincerely appalled by the behavior of the storm profiteers. Sadly, I doubt this tension will prompt the governor to reassess his theory of justice.

[x-posted with Majikthise.]

~ posted by Lindsay Beyerstein at 2:30 PM ~ link ~ ~ ~