Price Controls and Hoarding During a Pandemic
In major public emergencies, government makes raising prices a crime, though such laws always end up hurting more than they help.
We often divide the nation into “Red,” or Republican, and “Blue,” or Democratic states, presuming that the former are more likely to uphold the virtues of the free market than those run by demagogic and left-leaning politicians in the latter. But the truth is that when disasters, pandemics, and other events occur, most politicians react in much the same way — and it isn’t pretty.
In my home state of Oklahoma, where no Democrat has carried a single county in the presidential race since 2000, the Republican attorney general, Mike Hunter, announced his response to the rising shortages (brought on by panic buying) of certain items. He said that the state’s “price-gouging” statute is now in effect, with the announcement by President Donald Trump of a national emergency in reaction to the coronavirus. The Oklahoma statute prohibits “an increase of more than 10 percent for the price of goods or services after a declared emergency.” This declaration could be from either the governor or the president.
Hunter, of course, did not make the law — it was enacted several years ago when the Democrats ran the Legislature. But it is Hunter’s job to enforce the law. At the same time, if he understood and believed in the power and the morality of the free market, Hunter could use this time as a teaching opportunity. He could say something like, “As your attorney general, I am required to enforce this law, but the fact is we would be better off to leave the free market to work its magic.”
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