Local people live in these places too and they stay there all year round. The woman selling crispy snacks to tourists at 500% markup will also sell them to locals for the normal price all year round, just as crispy snack sellers do in non tourist areas. It's different for the souvenir sellers of course.

This doesn't discount the real poverty that exists in many countries, and I'm not dismissing that. But if you're seeing poverty in a tourist area it probably means it's ten times worse in the places where tourists don't go and you're not going to solve that by stressing out over whether you should feel guilty for haggling or not. It's not your job to solve poverty in places you visit and feeling like you should is more a case of "Western guilt" than anything else.

You'll have a much more lasting impact, and gain much more, by seeking out human interactions that are not purely financial, sharing your culture and experiences with theirs, than you ever will by buying tourist crap in every place you go.

So the locals can’t work on something else in the off season?

The dealer will not charge less than he can afford. He’s not being coerced into beggary. There is clearly a market. And tourists will still overpay as they always do.

It’s not the tourist’s job to worry about the knick knack dealer’s finances. That’s patronizing, presumptuous, and shows a lack of boundaries. Unless you’re dealing with a beggar where a transaction may be merely symbolic, I don’t even see a legitimate opportunity for charity here. Even then, you could still contribute to entrenching poverty by encouraging a tourist culture that inculcates dependence on charity. Authentic charity and generosity are governed by reason, not sentiment.