RoR: Forum

Let me begin with a hearty:

I DENOUNCE THEE, I DENOUNCE THEE, I DENOUNCE THEE

for anyone who disagrees with me to any degree on any subject (um, that should cover everyone).

I love the smell of schism in the morning...

Ahh, now that that is out of my system...

I have no idea what, if any, 'price gouging' is going on in the wake of the hurricane.

Since the media has so completely laid claim to its definition, I hereby retreat from my former position. Price gouging as described in the article and as used in the media IS an anti-concept.

That doesn't mean every bargain is fair, or that every bargainer is at the table with clean hands, which is what guys like Pasotto seem to believe. It does not mean that fraud, coercion, and deceit are not used on occasion. As much as we would LIKE exchanges between men to be value for value, it 'aint always so. But we will not call it price gouging, we'll call it fraud, or whatever.

And for the record, I have NEVER claimed that property rights should be preempted by others' need.

Post 121

Monday, September 5, 2005 - 7:01pm

Nice try, kat, but non-existent charges are fraud, and the rest of the article is disgusting, prattling on about "overcharging" and the Attn. Gen. using the might of the state to determine market prices instead of the buyers and sellers.

Listen to yourself, Kat!:

"They charged a nursing home $54,000 for $18,000 in work"

What??? Yes, the nonexistent crane is fraud. But that company charged what those people were willing to pay. What exactly is "18,000 dollars" "WORTH" of work? Is there a table I can reference? Some sort of chart? Let's make it easy and just have the government set fair prices, which, since they can't do that through the front door, people like you are allowing them to end-run around it with this garbage. I am wondering if your sanction of this move by the AG of FLA means you belong here.

Other quotes from the article full of BS:

FLA AG: "some of the charges billed by Garner were considered excessive and possibly rose to the level of price gouging" (Excessive prices....right)

"the facility will only pay $18,000 for the actual work performed" (rather than the formerly agreed upon price that two rational folks came to an agreement on...nice)

"The investigation was prompted by a number of consumer complaints to the Attorney General's Price Gouging Hotline" (A HOTLINE???!)

"billed approximately $69,000 and now will only have to pay $25,000 for the actual work performed" (Apparently the state had a crystal ball that can determine what stuff should be "worth")

Of course, the next hurricane victims are going to take in the end twice, once for the hurricane and once when no developer is willing to show up because they can't charge what they want. The Government and it's sanctioners: making life more miserable since 4000 BC.

Edit: Forgot the money quote from the AG: "Florida citizens suffered serious losses during last year's hurricanes and the last thing they needed were repair companies trying to bleed them for excess profits," said Crist. "This settlement agreement should remind all Floridians that we will not tolerate profiteering."
(Edited by Steven Druckenmiller
on 9/05, 7:04pm)

Post 122

Monday, September 5, 2005 - 7:16pm

Steven Druckenmiller,

I am wondering if your sanction of this move by the AG of FLA means you belong here.

What is that supposed to mean? If your suggesting that Kathy shouldn't be here, or doesn't belong here, just because she has made a mistake... why that is just ridiculous.

Post 123

Monday, September 5, 2005 - 7:31pm

Kat, this:

They charged a nursing home $54,000 for $18,000 in work

is purest economic ignorance. That under different circumstances and at a different time the contractor would have charged some particular amount for similar work does not mean that the work has an intrinsic value of that amount.

Then you write:

Price increases caused by economic forces is not price gouging.

There are no "economic forces" that somehow mysteriously cause price changes. Prices change because the individual actors in the market change the ranking of the relevant items on their value scales based on their current perception of reality. The result of these individual decisions is that the average price in the market changes.

To say that "market forces" compel price changes is to reverse cause and effect.

Post 124

Monday, September 5, 2005 - 7:31pm

It's not a mistake until you admit it as being one. Instead of admitting wrong thinking (kudos to Scott...welcome to the dark side:-) individuals who believe in governmental economic controls and "price-gouging" are reinforcing themselves with articles and continued argument. It's not a mistake anymore, it's rampant evasion or arguing for the sake of arguing.

Post 125

Monday, September 5, 2005 - 7:37pm

Phillip, there's an implied premise in your first two examples that needs to be made explicit. That premise is that you have no prior negative knowledge about the people in need of help. Suppose the drowning man were Ted Kennedy. :-)

Post 126

Monday, September 5, 2005 - 8:24pm

You can't go having a schism without me. That wouldn't be fair.

Perhaps I can paraphrase what I said elsewhere:

Most intelligent analysis of 'price gouging' specifically excludes (or should exclude) �the horrific situation in the worst-hit areas, in which first-worlders have been thrust into the third world literally overnight, many with no place to even sleep, let alone have access to food, water and other necessities or money with which to purchase them.�

Advocating anything less than simple benevolence for those in the midst of the horror would be something less than human; however, to advocate anything other than market mechanisms to set prices once the immediate tragedy is past is to ask for the natural disaster to be compounded by a man-made one.

Both ~sense~ and ~benevolence~ are necessary in disasters such as this one. Price caps and rationing are not.

I suspect anyway that those arguing for 'price gouging' and those demanding compassion are writing for two different audiences about two different things: the former to legislators or to those demanding legislation about the idiocy of price caps and rationing; the latter to those who might offer voluntary assistance, and to encourage them to do so.

Both approaches are necessary and appropriate, IMO.
(Edited by Peter Cresswell
on 9/05, 8:53pm)

Post 127

Monday, September 5, 2005 - 8:42pm

After being repeatedly asked for an example of what I would consider to be price gouging, I gave a link to an article about a construction company case prosecuted by the Florida Attorney General under the price gouging laws. Whether you call it an example of price gouging, fraud, kicking someone when they are down or even capitalism doesn't really matter. I was merely complying to a request for an example of the unscrupulous business preying on the misfortune to clarify what I think is price gouging. I also stated very clearly that I do not consider the current increases in gas prices, for example, to be price gouging as is commonly put forth by the media.

I do not get off on splitting hairs. For you guys to pick apart the article (which I did not write) line by line and attribute a bunch of liberal bromides to me personally as well as call me a communist, Kantian and tell me I don't belong here is uncalled for and downright cruel and disgusting behavior. Aim your guns elsewhere.

I am not the enemy.

Kat

Post 128

Monday, September 5, 2005 - 9:17pm

Kat complains about splitting hairs. But precision in speech, particularly political speech, is critical. Criticizing "price gouging" when you are really complaining about a lack of benevolence is playing into the anti-capitalists' hands. They want to blur the difference.

Define or be defined.

We are in a war of ideas and letting the enemy dictate the terms of the debate is a sure way to lose.
(Edited by Rick Pasotto
on 9/05, 9:18pm)

Post 129

Monday, September 5, 2005 - 9:17pm

Do not get angry when we demonstrate that your article was not price-gouging, when it was a mix of illegal fraud and reasonable pricing for the context. And don't set up something as an example of what you want us to look at for your belief in gouging and then distance yourself by saying you didn't write it. We know, but your endorsed it, and before your place your sanction on something, you should read the whole thing.

Post 130

Tuesday, September 6, 2005 - 12:05am

Steven D.:

Thank you for an article that stimulated the kind of controversy I like to learn from.

Everybody:

The derivation of the social principle of rights depends on a context of cooperation and trade being mutually beneficial to men (trader principle; harmony of interests etc.) Outside the scope of that context we have emergency situations, in which the rational man may have to disregard what in a non-emergency situation would have been the rights of another. A man who chooses to place another in an emergency situation, thereby destroys the civilized order that men qua men require for their lives. Therefore the man who places another in an emergency situation - for example, by demanding a contextually impossible price for some necessity of survival - effectively abrogates his own rights, to the extent that the other finds it necessary to violate what would normally have been the rights of the first, in order to survive (or to save his child, etc.)

The propagandistic device of overextension is used by giving the above as an example of "price gouging" that objectively deserves to be considered a crime - and then defining the "crime" of "price gouging" much more broadly, to include not only the creation of emergencies but also price increases that do not create genuine emergency situations, but are high enough to surprise, inconvenience, or offend the "sovereign representatives of the People." Overextension is so frequently used to "justify" unjust and oppressive laws that it ought to be (like the Big Lie, the Nagonka and other well-understood techniques of political propaganda) understood and identified by defenders of individual rights.

(Edited by Adam Reed
on 9/06, 12:07am)

Post 131

Tuesday, September 6, 2005 - 3:10am

Steven,

I was going to compliment you on your demeanor in talking to a lady - not calling her a Communist and so forth - when disagreeing with her, knowing that her fiancee is present. Some of your arguments started me thinking. Yet you still asked if she belongs here on Solo.

I will answer that. Yes she does. Do you have any problem with that?

Now about that the legion of "shame on you's" that your posts aim in my direction, let me indulge in a "shame on you" right back. But before that, let me state my unequivocal position on "price gouging." This term as used by the government to sanction its increasing price control laws is completely despicable. The term connotes the use of force by a seller, but force is not present without thugs. So in that respect, it is an anti-concept and you are correct. It connotes one thing (thugs or some unsavory threat of violence present) but is another in fact (simply higher prices).

Where the term is used in emergencies, the force of thugs has been substituted by the force of a suddenly hostile environment. That force is real, no longer implied. I happen to agree with Adam Reed about emergency situations. In my own words, a person who uses the force of a suddenly hostile environment to set an impossibly high price is gouging. That would be one example you keep asking for under Objective reasoning. To be clear, the seller is not using force generated by himself - but he is using force by "borrowing" it from a life-or-death environment.

Back to shame-on-you. You took Kat's example and properly noted the lack of crane that was billed. You properly called it fraud. You also noted the disgusting price control law that was used as grounds for prosecution. Then you defended the rest of the charges billed by these con artists as being properly priced without even knowing what they were. That shows complete bias toward the dishonest. Obviously, if a man is so dishonest that he will bill a high price for a machine that he did not even provide, he will not miraculously turn into a saint on the rest of the same bill. Not at the price I read there. What makes you so sure that the rest of the bill was completely honest and not likewise padded with fraud? Benefit of the doubt? For a con artist?

Kat was responding to Scott's remark about kicking one who was down. She basically was trying to get across the idea that con artists, those who always pop up in emergencies, who rip off little old ladies through fraud and use the force generated by an emergency to further "gouge" their prices are despicable.

But go on. Defend them if you will. I say shame on you.

Kat's knowledge of Objectivist capitalism theory is not the best right now (she is new to Objectivism and has not yet read Capitalism: The Unknown Ideal, for example). So she is using common sense language that sometimes causes a knee-jerk to Objectivists. She did tell me something, however, that gave me pause for thought. She said that laissez-faire capitalism does not exist in the USA. Yet this fact is not present in practically the entire thread - people are arguing as if it were. The real people out in the real danger zone have lived in a mixed economy up to now. They still do. (That does not make it good, but this fact also does not deserve to be ignored.)

I have other considerations, but it is too late right now.

btw - I will go back to that other thread and try to argue with you if you also agree to make reasoned comments, not just repeat yourself post after post and completely ignore what I write, like you have done. I'll try one post. Let's see. (You are right, by the way, on my abuse of foul language aimed in your direction. Sorry. That is not up to my usual standards of discourse to one who deserves better - and we may disagree, but you do deserve better.)

Michael

Post 132

Tuesday, September 6, 2005 - 4:41am

Scott, Kat, and Michael, I consider you all courageous. I don't want to get drawn into this, but I just wanted to speak up in defense of you three for arguing in favor of people over money. I do not discount the counter arguments concerning government intervention and such, and I have mixed feelings on the matter myself, but something I recently read kind of shored up my thoughts on the matter.

In a recent bestseller called FREAKONIMICS, there is a chapter on how the crack epidemic spawned a new breed of criminal underground among blacks in the projects. Basically, the more successful drug dealers in the ghettos adopted a corporate mentality to their dealings, with heirarchies similar to a corporation. A research student supposedly had access to the behind-the-scenes workings of one such "business" and learned that their were ledgers, account sheets, etc. The leader of this one gang was actually college educated but felt he abandoned his people and used his business skills to "keep it real", so to speak. They even paid out insurance and death benefits to slain member's families.

The point is that good business skills, while beneficial and productive in themselves, are only as good as what they are used for. Nazi doctors may have been skilled, but their skills were used to murder. The truth is that there are people out there who look to disasters to make a fast buck at the expense of real victims. We are not talking the local shopkeeper, we are talking vampires who are out to make a buck even if it sucks the community dry. There was supposedly a recorded conversation among Enron execs where they supposedly said that they were going to make a killing off of the California energy crisis at the expense of the grandmothers they ripped off. I haven't heard the tape, that could be a smear, but if such things really were said, that would be the capitalist equivalent of Nazi doctors employing their skills to murder.

Such things sound cartoonish; indeed, it is the kind of thing evil nuclear power plant owners named Mr. Burns are prone to do. (I saw an episode recently of MALCOLM IN THE MIDDLE where the town was evacuated to a school gym due to a chemical spill, and the son stole items such as cups and toilet paper from the supply closet which he used to extort other goods from the townspeople.)

This is the kind of behavior it seems that you three are protesting against, not the average business man raising his prices to meet demand. Though such things seem cartoonish, I do believe that they exist, but even though such villains employ capitalist methods to gain, they are not true, "rationally selfish" capitalists in the Objectivist sense, for they are not creating a sustainable future by bilking those in an emergency, but draining it. It's like Kira says, "I loathe your goals, I admire your methods." We can't be fooled by Attila's and Witch Doctor's in capitalist clothing.

Post 133

Tuesday, September 6, 2005 - 5:48am

Joe,

Scott, Kat, and Michael, I consider you all courageous. I don't want to get drawn into this, but I just wanted to speak up in defense of you three for arguing in favor of people over money.

Hoo-boy, once again the triumph of squishy sentiment over hard-headed commonsense. What does favoring people over money mean anyway? It sounds warm and cuddly, but like a lot of soft-headed sentiments, it'll bite you in the ass once you try to put the idea into action.

Andy

Post 134

Tuesday, September 6, 2005 - 5:58am

Wasn't talking to you, Andy.

Post 135

Tuesday, September 6, 2005 - 6:07am

Adam,

Outside the scope of that context we have emergency situations, in which the rational man may have to disregard what in a non-emergency situation would have been the rights of another. A man who chooses to place another in an emergency situation, thereby destroys the civilized order that men qua men require for their lives. Therefore the man who places another in an emergency situation - for example, by demanding a contextually impossible price for some necessity of survival - effectively abrogates his own rights, to the extent that the other finds it necessary to violate what would normally have been the rights of the first, in order to survive (or to save his child, etc.)

What if I simply refuse to sell to you at any price? Maybe I have my own child to save. Maybe I have enough for today, but won't have enough for tomorrow if I sell to you. Maybe I want to keep a surplus until the emergency passes. Maybe only by demanding an exorbitant price from you I am willing to take a risk to deal with these situations. Why should my planning to avoid a crisis in an emergency be sacrificed to your need?

Would these situations create contexts that would not abrogate my rights? If so, how would you know that if all you know is that I will not sell to you? Or is this abrogation of my rights in an emergency predicated upon your certain knowledge of my reasons for not selling or selling only at an exorbitant price? If so, it would seem to be that you are describing an exceptional set of circumstances that would allow you to assault me to get what you want.

I look forward to your response.

Andy

Post 136

Tuesday, September 6, 2005 - 6:22am

Joe,

Wasn't talking to you, Andy.

You can run away if you want, but you have written a silly post and I'm calling you on it.

Capitalism is never fraud and is never the method of a criminal organization. You can cite the many, many examples of criminal gangs using bookkeeping, but that does not make them capitalists for the simple reason that coercion and theft is always a part of their "business". Capitalism is the free market not the bazaar. It is the trader principle not caveat emptor. It exists only upon the foundation of the rule of law.

So don't confuse the operation of capitalism in extreme conditions, like a natural disaster where prices fluctuate wildly as buyers and sellers learn through the price mechanism what is scarce and what is not, with criminals who do accounting. Capitalism by its very nature cannot never be a method of criminals. But it is the most efficient means of doing business amid chaos.

Andy

Post 137

Tuesday, September 6, 2005 - 6:40am

Not running away from you, said in the post that I wasn't looking to get into it. I was talking to the three I named. Not trying to convince you of anything.

Post 138

Tuesday, September 6, 2005 - 6:44am

I'm impressed that everyone here is willing to put so much energy into discussing these issues, and that everyone has been able to keep the discussion focused (for the most part) on ideas rather than personalities.

Maybe (maybe) it will help people understand each other's arguments if I provide some legal background, based on well-established Anglo-American law (not bureaucratic rule-making):

1) Fraud is basically telling someone one thing while doing or intending to do another, in order to induce the other fellow to do something for you. (For example, charging someone for a crane that you know you never actually had on the job.) Fraud is actionable, and it is also something that Rand viewed as a use of force that justified a response with force (preferably by the government, through the courts).

2) Breach of contract is failure to do something that you promised another person you would do in exchange for something from that other person. Fraud can be considered a very egregious type of breach of contract. But breach of contract also includes, for example, agreeing with someone that you'll fix her roof with asphalt shingles and then fixing it with tar paper instead. (It doesn't really matter whether the tar paper was an honest mistake.) Like fraud, breach of contract is actionable, and it is also something that Rand viewed as a use of force that justified a response with force.

3) There is a concept known as overreaching, which someone can use to get out of a contract under very limited circumstances. Historically, courts have very rarely allowed people to get out of contracts by arguing that the other fellow was overreaching. You basically need to show that the other fellow had so much domination over you that you were unable to decide for yourself. About the only time an "overreaching" argument succeeds is where the heirs of some feeble old lady show that her butler or neighbor or lawyer or accountant insinuated himself into her life so much that she was almost brainwashed into signing over all her property to him.

4) It is not overreaching, and a contract will be enforced, if the person who's trying to get out of it simply "paid too much," no matter how much too much. For several centuries, Anglo-American law has put the burden on each person to decide how much he's willing to pay, and arguing after the fact that you were in a hurry, were worried, were lacking information about the going rate, needed to protect your wife's health, etc., etc., will not by itself get you out of whatever you agreed to. It's up to you to judge whether you can or should enter into a given agreement.

5) There is also a concept known as duress, which is about as rarely found by courts as overreaching. This concept basically allows you to get out of a contract if you made the agreement only because there was a gun to your head. For example, if you're drowning and somebody happens by in a boat and says he'll throw you a line if you'll pay him $500, and you agree, no court is going to enforce that agreement. It was life or death for you. (But a court will require you to reimburse the guy for any associated out-of-pocket costs, such as if you rip some nice brass railing off his boat when you climb aboard.) On the other hand, it's not duress if you're just in a difficult situation.

Sorry for the length of this. These definitions don't answer the questions being debated here, but they may help people keep straight the different situations they're talking about. As I said, these are (simplified) concepts that have long existed in Anglo-American law, and I believe that they are objective and would need to be carried over into any Objectivist legal system.

(Edited by Jay Pastore on 9/06, 6:50am)

Post 139

Tuesday, September 6, 2005 - 6:50am