Most usury laws do help the poor.
That's debatable. One of the effect of such laws (and any laws that set limits on price, in this case an interest rate is the price on borrowing money) is to limit supply. The rates allowed are large enough to not effect the supply in general, but the supply for the poorest or those with the worst credit is reduced. In some ways that might be good because those with awful credit often have such bad credit because they have no ability to manage their debt and income, but sometimes it just means they do without money when needed and some people even turn to loan sharks and the like and face even higher rates and harsher terms...
That fact, however, does not change my original point. Certain laws were put into place because the rich were gouging/taking advantage of the poor.
Generally restrictions on price are cures that do more harm then the disease. Laws directly against price gouging can often do more harm then good. If supply suddenly goes down or demand suddenly goes up and you don't let prices shift then you have rationing by que or by connections instead of rationing by price. Also you lose the inventive for supply to increase or for demand to decrease that would come with higher prices.
catallarchy.net
catallarchy.net
September 02, 2004
Florida gas stations aren’t gouging
Posted by David Masten @ 4:39 pm in
Many gas stations are beginning to close, Lay said,and future shipments will be limited since the Port of Tampa is closed. “It’s going to be a precious commodity before long,” said Lay.
They are closing instead. Days before the storm. I hope everyone planning on leaving has plenty of gas. From Florida Today, scroll down to “Brevard EOC bracing for Hurricane Frances”
catallarchy.net
Prices: The Great Equalizer
cafehayek.typepad.com
Anti-Gouging Idiocy
hnn.us
Killing the Messenger
cafehayek.typepad.com
More on Price Gouging
"...In brief, the wealthier someone is, the less likely he is to care much one way or the other about prohibitions against price gouging. (Indeed, I can make a strong case that wealthier people have a special incentive selfishly to endorse restrictions against price gouging: Bill Gates might well be even wealthier than Joe Sixpack in influence and connections than he is in money terms. If so, restrictions against price gouging will increase Gates’s advantage over Mr. Sixpack at acquiring suddenly-scarcer goods and services. Mr. Sixpack might have only a few dollars to spend, but he might have absolutely no special connections to cash in on.)
What’s needed most urgently in the aftermath of a natural disaster is a quick infusion of replacement goods and services. Keeping post-disaster prices artificially low will slow this infusion, making the people who are least-wealthy in terms of connections and ability to bribe much worse off."
cafehayek.typepad.com
Tim |
