RoR: Forum

Hmmm - wonder why my pasting is being disallowed... fustrating when trying to paste earlier written material rather than rewriting that all out ...

Post 41

Saturday, September 3, 2005 - 6:30pm

Scott,

Raising prices to reflect a reality is fine with me, except we disagree. That ISN'T called price gouging.

Yes, it *is*, and that was precisely the point of Steven's article. Just today, my state's country-fried rube of a governor called the $3.00 / gallon prices being charged by gas stations "gouging." As an Objectivist, I suppose you could construct some more limited definition that doesn't include the usual market practices that laissez-fairists recognize are perfectly moral and acceptable. But it's unreasonable for you to expect Steven and other SOLOists to magically understand and use that definition (and also unreasonable for you to use it as a basis for silly theatrics about how his article made you "ashamed to be a SOLOist").

I've seen you use examples involving the sick and infirm in several debates now, so it is starting to grate on my nerves a bit, but with regard to some of the hypotheticals you raised: Given the serious risks to life and limb that rescuers faced when entering New Orleans during the worst disorder of the past week, $10,000 for an insulin shot wouldn't have really been an unreasonable price to charge for the service of obtaining the insulin and (somehow) getting it to the people who needed it.

Also, in your examples, you brought up the possibility of a "price gouger" accepting stolen goods and loot. This is a practice that Objectivists rightly condemn, and one that is irrelevant to the current discussion.

Post 42

Saturday, September 3, 2005 - 6:31pm

No wonder the collectivists are running the planet when the practitioners of a supposedly rational philosophy can't even get their most basic premises sorted out.

Scott, *you* may use the term "price gouging" as a synonym for bad business practise but unfortunately the rats that inhabit the plush corridors of power in Washington don't quite see it that way, do they? To them, and every other statist, price gouging means "unfair pricing", "socially-unacceptable behaviour", "selfish conduct", etc. This causes them to come up with rules and regs to tame that nasty savage beast, capitalism.

Steven, Rick, et al are correct. Price gouging is an anti-concept. To suggest that a price is too high is like saying Microsoft is too big. The same basic premises apply.

You could take your original comments, post it on a left wing website and they'd all be nodding their heads and taking solace from it.

I agree with your comments regarding ethics and benevolence. And I doubt that anyone here wouldn't. But what the hell does that have to do with the premise of Steven's article?

Let's not forget re Katrina that it was private citizens who arrived first to help and it was the government agencies, the espousers of anti-gouging rules and enforced benevolence who waited five days to get their asses into gear.

Ross

Post 43

Saturday, September 3, 2005 - 7:14pm

Lots of wrong-headed ideas on this thread.

Rich wrote:
"Price gouging is not a mythological concept; it is bad business practice. Price gouging is different than having to raise prices to keep your margins where they need to be."

So what if I raise my margins way above where they "need" to be, simply because I can? Is that wrong? How about mega-sports stars who earn millions or billions for doing something they love and would probably be happy to do for mere tens of thousands...?

The fact is that economic rents are everywhere. Normally only lefties moan about it though.

Scott expressed outrage at the article, but he doesn't keep to the context that the article described. Steven didn't talk about people asking for a family's house, and effectively raping the mother and sodomising the father, he talked about raising the price of oil and ice to $6 and $10 respectively. I don't understand how a defence of that can make someone "ashamed to be a SOLOist"...?

Scott, I ain't calling you an advocate of altruism, but a quote from Ayn Rand appears appropriate here:

"Observe that the advocates of altruism are unable to base their ethics on any facts of men's normal existence and that they always offer 'lifeboat' situations as examples from which to derive the rules of moral conduct. ('What should you do if you and another man are in a lifeboat that can carry only one?' etc.) The fact is that men do not live in lifeboats-and that a lifeboat is not the place on which to base one's metaphysics". (Rand, The Ethics of Emergencies).

Post 44

Saturday, September 3, 2005 - 7:42pm

"Observe that the advocates of altruism are unable to base their ethics on any facts of men's normal existence and that they always offer 'lifeboat' situations as examples from which to derive the rules of moral conduct. ('What should you do if you and another man are in a lifeboat that can carry only one?' etc.) The fact is that men do not live in lifeboats-and that a lifeboat is not the place on which to base one's metaphysics". (Rand, The Ethics of Emergencies).

Ummm...I hate to play devils advocate here, especially on this thread since I so despise the meaningless term "price gouging", but I believe New Orleans would be a 'lifeboat' situation and if Objectivism is to be a complete philosophy it MUST deal with lifeboat situations. You do not base your philosophy on lifeboat situations, but your philosophy must be able to deal with them as they manifest in reality or it is not fully applicable to reality. I think Objectivism does a fine job of dealing with them, I just hate it when objectivists present this argument as if they NEVER occur.

Post 45

Saturday, September 3, 2005 - 7:47pm

It's not normal procedure for me to repost unsolicited email, but I just received this and thought it was wonderfully apropos:

=====begin stupidity=====

HATE PETROL PRICES?,

THEN DON'T BUY PETROL ON

5TH SEPTEMBER 2005!!

It has been calculated that if everyone in New Zealand did not purchase a drop of petrol for one day at all the same time the oil companies could possibly choke on their stockpiles.

At the same time it would hit the entire industry with a net loss at the current prices of $1.50 per litre (30 litres for a full tank) $45.00 x a conservative estimate of 2,000,000 vehicles in NZ that would equate to $90 million dollar loss (one day) to the oil companies and hit their profit margins.

Therefore

September 5th

has been informally declared

"Stick it up their butt's day".

Motorists of New Zealand should not buy a single drop for that day!

The only way this can be done if your forward this e-mail to as many people as you can to get the word out.

Waiting on this Government to step in and control prices is not going to happen and there is an Election coming so why not throw them into a panic.

BOTH PARTIES HAVE REFUSED TO REMOVE THE EXTRA 0.05 CENT SURCHARGE ON PETROL INTRODUCED ON 1st APRIL 2005.

Remember one thing about raising gas prices:

Airlines are forced to raise their prices

Trucking companies forced to raise their prices

These prices affect the cost of shipping

Flow on effect that your GROCERY BILL goes up

Flow on effect on clothing, building, medical supplies!

It effects all of us in every area while companies can write off these

expenses, consumers cannot.

Who pays in the end?

WE DO - The consumer!

We can make a difference if they don't get the message after one day we will do it again and again.

Enough of these ridiculous excuses that the oil companies use to justify their increases everything from President Bush missing a golf stroke on the 9th hole to Aunt Fanny's artificial leg falling off.

If you are sick of this manipulation vote with your car and do not buy a drop. Spread the word and mark the date on your calendars.

=====end stupidity=====

Ross

Post 46

Saturday, September 3, 2005 - 7:52pm

Jody

Please read the example in Steven's article and Scott's example. (I already highlighted the difference in my post anyway). They aren't on the same scale.

The quote is entirely appropriate in that context.

Post 47

Saturday, September 3, 2005 - 8:05pm

Tim-
If in a similar argument someone a month ago had used the situation that currently exists in New Orleans you would have derided it in the same 'lifeboat' manner. All I am saying is that Objectivism must be able to deal with ANY reality and keep in mind that I am saying that it CAN and DOES deal perfectly with such realities. Scott's problems are not in his absurd, possible-reality scenarios, but in his underlying premises. We're(you and I Tim) are not really on opposite sides here.

(Edited by Jody Allen Gomez on 9/03, 8:19pm)

Post 48

Saturday, September 3, 2005 - 8:18pm

And lest I be misunderstood(I know this never happens with O'IST's, but...) let me iterate. Ayn Rand correctly said that you do not take lifeboat situations as a starting point for building a philosophy and in correctly understanding this, she put forth a philosophy that ABSOLUTELY CAN deal with these realities. But you must have correct premises in order to do so. Muddy, ambiguous, equivocal, anti-concept terms such as 'price gouging'(sorry the redundancy was damned necessary) are always an impediment to dealing with these situations correctly.

Post 49

Saturday, September 3, 2005 - 8:29pm

And Scott-
Though I disagree with almost everything you say, I gave you a sanction for the conciseness of this one statement:

There is something unsavory about kicking someone when they are down.

Yes! Though we do not deny the reality of why they are down there, we do not let the past cause of the present situation nullify future potential.(I'm speaking of the hurricane victims here, because that is what came to mind when I read your statement-you could apply it anywhere though.)

Post 50

Saturday, September 3, 2005 - 9:02pm

"I believe New Orleans would be a 'lifeboat' situation and if Objectivism is to be a complete philosophy it MUST deal with lifeboat situations. "

I'm not sure if the following has been said with precision, but I want to expand on Jody's point, above:

The rules regarding "charging what the traffic will bear" change (but do not entirely vanish) in an emergency which threatens major values including life itself.

The anger some people express at someone who would ask you to bankrupt themselves to pay for something needed for survival is justified. As is the point that "price gouging" is a good idea because it rations scarce resources and makes it worthwhile to bring them in when it is difficult or expensive.

The first case is indeed an emergency situation in which a benevolent person would non-sacrificially help others. But that does not mean he would not seek to make a profit in an emergency. The dividing line is not a clear one, but the principle is that you i) charge what the traffic will bear ... as long as it doesn't violate another principle... ii) whether or not you actively -help- someone in an emergency, it is inappropriate to "kick him while he is down" in the sense of making the price of his survival or health the loss of another major, life-altering value.

If you agree that benevolence is a virtue (in the broad senses defined by David Kelley in "Unrugged Individualism")you have the legal right but not the moral right to viciously try to destroy someone's future life as the price for providing him with the means of his present physical survival. You do have the moral right to ask him pay an amount that might be hugely more than non-emergency prices, however.

No, I can't give you a "dollar number". Or say what the difference in price would be for water vs. gasoline vs. clean clothes vs. transportation.

And I do not have an interest in nitpicking with exactitude how much those trucking in gas can morally charge based on principles i) and ii). But it is probably more than double the normal price (it is scarce and expensive to truck in) but it is certainly not signing over the deed to one's home.

Does this help resolve the difference of opinion on 'price gouging in an emergency'?

Philip Coates
(Edited by Philip Coates
on 9/03, 9:06pm)

Post 51

Saturday, September 3, 2005 - 9:59pm

Some price spikes may not have much at all to do with the simple desire to wring every last dollar from the buyer.

It's reasonable to contend that many businesses hike prices to simply knock the heat out of the market. If you've got mile-long lines, potential for shortages (and therefore angry customers) and a certain affinity for the local community that is far closer to benevolence than it is to altruism, it's quite likely that higher prices in emergencies have less to do with profit than a desire for a semblance of normalcy.

Ross

Post 52

Sunday, September 4, 2005 - 8:23am

Higher prices may also reflect a lack of knowledge. When conditions are changing rapidly it becomes increasingly difficult to guess what the market clearing price would be. Setting your prices higher than you think necessary, when the trend is toward higher and higher prices, may very well be the prudent thing to do. It certainly gives you more flexibility than setting your prices too low and not being able to recover your costs.

Post 53

Sunday, September 4, 2005 - 9:41am

We have all seen how tragic situations mobilize the good will in people, but it also brings out the bad in people as well... as seen with the surge in crime, looting, and general chaos. People in desperate situations tend to do things they would not normally do.

America is a mixed economy and not everyone subscribes to our idea of trading value for value. To think that some opportunistic SOB will not exploit the situation by trying to fleece others and "kicking them when they are down" is putting way too much faith in human nature. Reality check time.

The market does dictate pricing and a price surge in gasoline of $1 or so is certainly not price gouging considering the damage to the gulf coast. Human lives, homes, properties, businesses and jobs have been lost -- a major U.S. city has been destroyed -- and for a person to cross the line from capitalism to extortion in light of the tragic situation is indeed a horrible excuse for a human being.

Post 54

Sunday, September 4, 2005 - 10:01am

Fleecing, extortion...bah! It is clear to me that SOLOEconomics needs to step it up a bit.

Here's an example: You fled NOLA with all the money you could gather, and with little else. You're dying in the hot sun waiting for our government to ignore you while it forces you to stay there rather than make and individualistic attempt to flee. Someone comes along and offers you an "extortionable" (I have to put that here because the economic ignoramuses refuse to say nothing but that there are prices that are "reasonable" and those that are "kicking someone when they are down" or "extortion") price for water. You are dying in the heat with money doing you no good right now. Spend the money and be happy that this saint came along, rather than listen to the pure garbage spewed by people on this board.

Seriously, you all sound like these people should just be handing the stuff out. Prices are going to be high in a lack of abundant supply, and will especially be high because of the serious demand and the lack of law and order.

I am actually starting to get a little pissed off listening to you people who yammer on about fleecing, kicking, extortion. These ridiculous scenarios and communistic bromides make ME ashamed, in part, to be a SOLOist. I am ashamed because I never thought I would hear people make non-statements (ON AN OBJECTIVIST community) like "put your margins where they NEED to be", or don't "overcharge" as if there is some sort of universal value to profit, pricing and the market

Some of you seriously have your head square up your respective asses, and I am tired of taking garbage-flinging from people with a demonstrable lack of knowledge in economics and morality.

With all of you detractors: prove an example of price-gouging. I have said it does not exist and it does not until you prove it does (kind of like our argument for, oh, say, god). And if you give me a stupid statement like "I'll know it when I see it" I will be forced to wonder what alterna-objectivist universe I am inhabiting.

Post 55

Sunday, September 4, 2005 - 10:13am

This thread is hysterical. Evidently, everyone can suss out my premises from a few lines (incorrectly, I might add). And the putting-words-in-mouth thing is exciting, too.

I changed my mind. Only fucking morons even use the term 'price gouging.' If you even think of the term, you're a no good lefty. My new favorite term is 'anti-concept.' I am going to use it in all new circumstances that I don't like, or wish didn't exist.

All commerce is completely legitimate and moral regardless of the terms. Benevolence is for sissies. Trade, or begone.

Seriously, though. Fine. Maybe my definition of price gouging is wrong--maybe what I am describing is more horror scenario than price gouging. I agree that it is used very broadly by the media and lefties to bitch about 'high prices.'

Benevolence figures in here somewhere.

Post 56

Sunday, September 4, 2005 - 11:32am

If someone owns something, they own it. End of story.

The only proper price for something is whatever the buyer and seller agree to. Price too high, no buyer. Offer too low, no seller.

My sense of benevolence varies for different individuals. If either of my daughters' lives were at stake, as a buyer no price would be too high for me to pay even if it included forfeiting my own life. If Bin Laden's life was at stake, as a seller no offer would be too low from him for me to sell.

My views on charity are very simple. I do not consider it a major virtue and, above all, I do not consider it a moral duty. There is nothing wrong in helping other people, if and when they are worthy of the help and you can afford to help them. I regard charity as a marginal issue. What I am fighting is the idea that charity is a moral duty and a primary virtue.
Ayn Rand, "Playboy's Interview with Ayn Rand"

The proper method of judging when or whether one should help another person is by reference to one's own rational self-interest and one's own hierarchy of values: the time, money or effort one gives or the risk one takes should be proportionate to the value of the person in relation to one's own happiness.
Ayn Rand, "The Ethics of Emergencies," The Virtue of Selfishness

If the person to be saved is not a stranger, then the risk one should be willing to take is greater in proportion to the greatness of that person's value to oneself. If it is the man or woman one loves, then one can be willing to give one's own life to save him or her--for the selfish reason that life without the loved person could be unbearable.
Ayn Rand, "The Ethics of Emergencies," The Virtue of Selfishness

Emergency situations don't change the laws of reality. They just raise the stakes. I enjoy helping people and I do it all the time. But never as a sacrifice to my values.

I know all Objectivists aren't as schooled in economics as others. I get lost on some of the science discussions. Here is an easy primer on supply and demand for anyone interested:

(Edited by Bob Palin on 9/05, 5:47am)

Post 57

Sunday, September 4, 2005 - 11:54am

The guy at Blockbuster said "A lot of people want that movie on DVD and they are willing to pay $20 for it".

Yeah, but what if they were in a desert and he wanted to sodomise the boy for it?

Post 58

Sunday, September 4, 2005 - 1:09pm

There are laws on the books in about 20 states against price gouging that take effect when an official state of emergency is declared. They basically say that a price surge of more than about 25% from prices during the previous 30 days is illegal price gouging. These laws were enacted because of shady home improvement contractors and other vultures who prey on such catastrophes. They are also designed to minimize petty complaints from people griping about normal price increases caused by the situation.

I think we all understand that during an emergency market forces cause a sharp increase in prices, and a seller is certainly entitled to make a reasonable profit. The term "price gouging" is certainly being tossed around a bit too casually, as in the current increase in gasoline prices, but calling price gouging a myth and saying that people will not prey on others when they are down is utter nonsense.

Kat

Post 59

Sunday, September 4, 2005 - 1:12pm