[cascom]

Except that when companies do this, and then ask to be rewarded for making that investment, they are lambasted for price gouging or profiteering…just ask any hardware store that has sat on a pile of snow shovels through the summer in order to capture a premium price when a blizzard is approaching…

[throaway46546]

I agree price gouging laws lead directly to shortages. Take the recent toilet paper shortage. What is a more preferable outcome, not having toilet paper available or having to pay 4x as much for a roll? Because the latter is illegal we have empty shelves instead.

[mywittyname]

The problem with price gouging is that people are irrational and feel entitled to the price they paid last week. People get super fucking angry at price gougers. Which is how the nation ended up with these laws to begin with.

So even if the government were okay with "market adjustments" on basic goods, there would still be this risk of stores getting looted/destroyed because people are so angry at how quickly prices increased.

Businesses are much less emotional. Most are just going to adapt to the new price.

[rsj_hn]

It is more than just people being angry. As was famously pointed out by Axel Leijonhufvud, inflation makes the process of economic planning extremely difficult. If you are a business, you need to make long term production plans, and when you have no idea what the costs will be, that severly disrupts the production process and leads to shortages regardless of how you feel emotionally about something.

Instead of talking about "inflation", talk about "cost uncertainty". That should make clear how a complex society with long production chains can't really deal with it. That also includes households, who have much less capability for planning than firms and really need to know what their bills will be and how much things will cost when making decisions.

https://www.academia.edu/43768978/NOTES_ON_COSTS_AND_CONSEQU...

[dragonwriter]

> inflation makes the process of economic planning extremely difficult.

It doesn't, though.

> If you are a business, you need to make long term production plans, and when you have no idea what the costs will be, that severly disrupts the production process

Sure, but that's the effect or unpredictable price changes, not inflation. USD is inflationary, Bitcoin is deflationary, but future (short or long term) prices of other goods and services in USD have a lot less uncertainty than those in Bitcoin. Inflation is not at all the same thing as difficulty projecting future prices.

[mywittyname]

Inflation is not the same as price gouging.

Price gouging is a legal term for people/retailers taking advantage of shortages or spikes in demand by charging well over market price for basic necessities.

[sokoloff]

Charging well over the previous market price.

Allowing price gouging is allowing selling at the current market price.