More on ‘Price-Gouging’

From Don Boudreaux.

"Suppose that on Monday I buy a full tank of propane from a nearby merchant for $50.  When making this purchase, my plan was to use the propane over the course of the next several weekends to fuel my outdoor grill in order to cook hamburgers and hotdogs for myself and friends who drop by for a few evening meals.  Suppose further that if someone on Tuesday offers to buy this propane from me for $55 I’d sell it to that person (my ease of acquiring a new tank of propane for $50 being quite high).

On Wednesday morning a devastating storm hits my neighborhood, obstructing many roads and knocking out supplies of electricity and natural gas for what promises to be at least a week, and perhaps much longer.  On Wednesday night, after the storm passes, a stranger offers to buy my full tank of propane for $55.  I decline the offer because now I know that I’ll need that propane  to cook my daily meals.  I know also that I’m unable easily to get to a store to buy another tank of propane.
“Well, how much do you want for the propane tank?” the persistent stranger asks.  I think for a moment and say “$200.”

“That’s outrageous!” the impertinent stranger insists.  “I know that you paid only $50 for that tank of propane, and that you would probably have sold it yesterday for as little as $55.  I’m reporting you to the police, for we have in this town a prohibition on price-gouging!”

Have I here committed a ethical offense?  If so, is it an offense that rises to the level of one that warrants intervention by the state?  And if you’re a supporter of government prohibition of so-called ‘price-gouging,’ would you wish to see me prosecuted and convicted if my town does indeed have in place a statutory prohibition of ‘price-gouging’?  If not – that is, if you’re unwilling to prevent me from charging whatever price I wish for my tank of propane – why are you willing to prevent other people – namely, merchants – from charging whatever prices they wish for whatever it is they own and might be persuaded to sell if they fetch attractive-enough prices?

I’m aware that not-implausible answers to this last question can be offered.  But I wonder how persuasive those answers are when they are thought about long and hard, especially using the economic way of thinking."