Another terrible analogy. What you described--taking a life-saving antibiotic and adulterating it--is a criminal act. On the other hand, if prices aren't permitted to increase when demand increases no one should be surprised at the result.
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No, the guy was creating a black market as Harry Lime did in the film. Such people were subject to prison sentences. Obviously, this is nowhere near as bad as what the Lime character did, and given that we have soap and water to do the job, we can deal with his scheme. But it’s still pretty loathsome, and the analogy fits, limping as most analogies do.
Btw, Welles gives one of the great movie speeches, where I believe he describes the evils of Renaissance Italy, that nevertheless produced such mind-blowing art despite its crimes. He then describe the years of good government and stability in Switzerland which produced... the cuckoo clock! Worth checking the movie out just for that.