By Spencer Schneier, Staff Writer

Published in print Jan. 28, 2015

Last Thursday at the School of Education, Dr. Michael Munger, a philosophy, political science and economics (PPE) professor at Duke University, gave a presentation titled, “Price and the Ethics of Exchange.”

The Duke professor wants to try and change the way that many people think about price, saying that many have the misconception that is just a output and not also an input.

He said that many economists also do not think about price in a personal way, but rather as a science, which distances the concept of price from the human and ethical problems that are raised by it.

Munger— who runs Duke’s unique PPE program, which teaches three of humanity’s oldest fields in tandem with each other— argues that laws against price gouging are not only ineffective, but immoral as well.

Price gouging is the practice of raising the costs of goods and commodities at a level considered unreasonable or unfair.

These inflated prices typically accompany the high goods demands and supply shortages produced by events such as natural disasters and civil emergencies.

Price gouging laws, which have been upheld as constitutional at the state level, freeze the price of goods and commodities during times of emergency.

In North Carolina, the law reads: “Upon a triggering event, it is prohibited and shall be a violation of G.S. 75-1.1 for any person to sell or rent or offer to sell or rent any goods or services which are consumed or used as a direct result of an emergency or which are consumed or used to preserve, protect, or sustain life, health, safety, or economic well-being of persons or their property with the knowledge and intent to charge a price that is unreasonably excessive under the circumstances.”

The statute continues: “This prohibition shall apply to all parties in the chain of distribution, including, but not limited to, a manufacturer, supplier, wholesaler, distributor, or retail seller of goods or services. This prohibition shall apply in the area where the state of disaster or emergency has been declared or the abnormal market disruption has been found.”

Using 1996’s Hurricane Fran as an example, Munger argued that less supplies and goods can reach disaster areas due to price gouging laws, and that the laws are counterproductive.

Munger argues that there is a higher demand for supplies during times of crisis and companies need to generate more revenues in order to fund sudden need for a higher supply production.

Munger says that price gouging laws freeze prices so companies are forced to price goods at a cost disproportionate to the demand for said goods.

As a result, he argues the private sector is less likely and, in some cases, unable to bring those necessary goods to areas in needs.

Munger’s argument that price gouging laws are immoral stems from his claim that people wil suffer because the free market has been stunted and cannot produce the necessary goods to help and save citizens.

Another example he offered was 2005’s Hurricane Katrina, after which the U.S. Army enforced price gouging laws in New Orleans out of fears that private entities would violate them.

Munger ran for governor in 2008 as a Libertarian against Gov. Bev Purdue and incumbent Gov. Pat McCrory but ran into a few road blocks in trying to explain his ideas.

He said he tried to share his arguments against price gouging laws with the people of North Carolina, but they were clearly not receptive to his ideas.

Munger, who brought an excellent energy to a subject that many would typically find rather dull, was met with a surprisingly receptive audience, filling every seat in the room and leaving standing room only.

Multiple members of UNCG’s department of philosophy were present.