The House has approved a bill that imposes criminal and civil penalties (up to $150 million for refiners and $2 million for retailers) on any energy company found guilty of “price gouging.” But selling at prices some people feel is too high violates no one’s rights–there is no such thing as a right to cheap gasoline. Moreover, “price gouging” has no objective meaning or definition–it is in the eyes of the beholder. People who complain about “price gouging” merely want a product at a lower price than it’s being sold for.
Perhaps recognizing the unsolvable problem of objectively defining “price gouging,” the House bill does not even attempt to do it, but delegates the task to the Federal Trade Commission.
But as Jeffrey Schmidt, director of the FTC’s Bureau of Competition admits, “One of the problems with price gouging is that there are a lot of different definitions of what price gouging is.”
Rep. Joe Barton (R-Tex.), chairman of the House Energy and Commerce Committee, has his own “definition”: “we know price gouging when we see it.”
“Price gouging” laws are like the sword of Damocles, hanging over the heads of businessmen, who at any time may be found guilty of the “crime” of selling at market prices that politicians deem too high. Businessmen should not have to live under this constant threat; as owners of the products they sell they have the moral right to set the prices.