“Gouging” becomes an issue every hurricane season. After big storms, some people raise prices. Then politicians and the media freak out. Both demand tougher laws against “gouging.”
But Nobel Prize winning economist Milton Friedman says, “the gougers deserve a medal” because they take risks to bring in goods that people desperately need.
Annelise Kofod, Erika Lewis, and Maggie Hroncich are students who get that.
They are winners of the contest held by John Stossel’s Charity Stossel in the Classroom (SITC). They collected $1500, plus a free trip for them and their teacher to visit Stossel in New York City.
This year’s contest invited students to write about “price gouging.”
“When people hear ‘price gouging’ they think, oh, ‘gouging’ — this awful thing. But it really is kind of just another name for ‘supply and demand,’” explains 17-year-old Annelise Kofod of Raleigh, North Carolina, who won the High School video award.
“Supply and demand,” she says in her video, can help people get things they desperately need.
Stossel’s classroom video reports on a so-called gouger, John Shepperson. Watching news reports after Hurricane Katrina, he learned that people desperately needed electric generators. So Shepperson bought 19 generators and drove them 600 miles to the hurricane disaster zone. He offered to sell them for twice what he paid. Lots of people wanted to buy them.
But Mississippi police called that price gouging. They confiscated his generators, and locked him up. Did that benefit the public? Stossel doesn’t think so.
Erika Lewis of Towson University, who won the college-level video category, says, “as I did more and more research I was like, ‘ok, maybe price gouging isn’t such a bad thing.’”
Maggie Hroncich of Grove City, Pennsylvania, won the high school essay contest. She points out that, “actually, the price gougers are the moral ones.”
Stossel agrees. He’s glad that SITC students understand the benefits of market forces, even when politicians and the media don’t.