Post by PickyChicky on Mar 11, 2020 20:58:38 GMT -6
In all the recent discussions going on around the 'net about price gouging and government trying to control it, the one argument in favor of price gouging that keeps coming up is 'supply and demand' and it irks me to no end because it's just a lame excuse conjured up by greedy people for taking advantage of consumers. As far as I'm concerned, there is no good reason for taking advantage, particularly during a period of crisis -- a global crisis, no less.
As a result of their shenanigans, supply has gone down significantly during a period of high demand due to a crisis because they've given cause to crooked sites to shut down everybody but their "buddies". Now they can all compete with the likes of the State of New York who intends to sell certain items at cost due to all the price gouging, which has yet to be proven legal action on their part (competing with citizens).
So, I decided to do a bit of research on the concept of supply and demand and learned something quite interesting. The original concept was drawn up by Adam Smith (while not necessarily coining the phrase), often referred to as the Father of Economics, who was only concerned about the effects of supply and demand on labor. When supply is down, prices go up, but when it's up, prices go down, so profits go down and manufacturers aren't able to pay their workers, resulting in high unemployment.
So, the original "concept" of supply and demand was that supply should meet demand to keep prices balanced to avoid causing labor issues -- not that you should use the idea to take advantage of people. Just because supply goes down does not mean that prices should go up. A merchant isn't going to lose any money by simply selling products at reasonable prices, no matter what the demand is. A manufacturer might incur additional labor costs and other operating expenses in order to meet high demand, but that certainly doesn't account for the prices being charged (apparently, Purell and other suppliers are also price gouging, leaving merchants little choice).
The "law" of supply and demand, which dictates that a product's availability and appeal impacts its price, was developed later on. The mere fact that it went from a labor-related "concept" to a profit-driven "law" with a catchy new name reflects the level of greed behind its new interpretation. It MUST be law to raise prices when supply is down, so it's okay to rob people blind. PFFT! Typical robber barren mentality.
The whole idea that prices are SUPPOSED to go up when supply is down is ludicrous. Yes, it's only natural for prices to go down when supply exceeds demand, but it's entirely the manufacturer's/merchant's choice whether or not they take advantage by robbing their customers blind in their critical time of need.
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