Is Price Gouging Immoral? Should It Be Illegal?

Oh I thought everybody here was against government.

 

We're getting into fairly fine distinctions here so I'll try to be careful about my wording. Morality consists of a whole bunch of ways you think you should act in given circumstances. People can each have their own set of morals but what's important in the context of my post is whether they should be legally enforceable.

Let's start with the concepts of negative rights and positive rights:

- A negative right is a right to be free of something. In order for someone to fulfill your negative right to life they simply must not murder you. The legal system is principally based on enforcing people's negative rights with the justice system determining the appropriate punishment. These rights are common to every person and are intrinsic to a functioning society. The non-aggression principle is a succinct summary of all negative rights.

- A positive right is the right to be provided something by the action of another. Positive rights are the antithesis of negative rights. These should not be part of the legal system as they are not common to every person and are based on your preferences or norms.

My morality might say that it is wrong for me to commit first degree murder. The legal system agrees because it violated the victims negative rights and society passes formal punishment on me through the formal justice system.

My morality may say that it is wrong to let a person go hungry. The legal system, however, should not agree because any notion that you have the "right" to receiving food from others automatically infringes on the other person's negative rights. Hence, if someone else does not give me their food they should not be at risk of any formal punishment from the legal system. I may think he's a socially irresponsible immoral dick. Others in the community may think the same as well. As errol and newtosilver described above, we can non-coercively punish that person in the future by refusing to associate with them or by refusing to trade our things with them etc. A morally just society, however, should not legislate punishment against that person.

Pre-empting the obvious question - what happens if a person has a massive stockpile of, say, critical medical equipment that can save someone's life right now and this equipment is not needing to be rationed in any way? Does the person have a legal responsibility to help the person lying outside their front door? I would say that they do not. I would however say that they do have a social responsibility. If they refused to supply the equipment except at an exorbitant price or only after getting a loan from the local bank then I would say that you are fine to storm his premises and take the equipment to save the person's life. Importantly though, you should then be hauled in front of the courts as a result of your actions that infringed on the person's rights. A reasonable justice system would find you guilty but would say that - because of the circumstances - you merely need to pay a reasonable fee to the owner equipment in compensation. The courts should also sanction and tongue lash the insensitive bastard that was willing to let someone die in front of them when they could easily intervene with minimal cost. They should not, however, be able to apply any form of formal punishment as this would be forcing positive rights.

Stefan Molyneux summed up this type of situation beautifully with his "You're a dick" qualifier to the non-aggression principle. "You're a dick" if you don't help save someone's life in this instance. Yes, he broke into your store and stole your equipment, but "you're a dick" so we'll just slap him on the wrist and maybe give him a medal.

 

Unfortunately not. We seem to attract a lot of Statist lovers that wish to thieve or parasitically live from the teat of others. Until we can abolish it we still need to live with the dirty great hairy beast whispering sweet nothings in our ear while it continues to pound our ..... (well, you get the point).

 

Finally had time to watch the original video, glad to see it's one of my favourite channels: Learn Liberty. Nice coincidence that they talked about a theoretical situation with generators and the Stossel video I posted had a real life situation with generators.

 

"Stossel video" ?

 

Stefan Molyneux did a good video regarding made up scenarios to try and find a problem the free market is unable to fix.

In the video he said majority of these examples have
1) a victim who is essentially an island and can not rely on any one for help; and
2) a major logical flaw where the question doesn't make economic sense in a market anyway.

I would say this example meets both his criteria. Firstly every person in the town has to be solely dependent an the supermarket for the gouging to take place, so no help from family, friends, charity, churches etc etc. Even if you somehow meet this extremely improbable scenario you then encounter a major logical flaw anyway. These people have no food and no money and the supermarket increases their prices, I'm fairly certain every school of economic thought would agree that no goods would be sold in this scenario and as a result would not rise in the first place.

 

Remember raising prices to meet the new market clearing rate is not a bad thing in reality anyway. If he keeps prices low he will sell out instantly and people will buy more than they need and others will miss out. Also the higher prices will attract others from other towns to come and sell more food which starts to lower the price back to normal anyway. Don't forget that by attracting people from other towns with the higher profits you are also getting MORE food in quicker. This actually helps more people in the quickest time. Price gouging is not only a part of the market and NOT immoral, it is essential to help the most people in need in the quickest time.

 

Preying on people's misery and parasitic practises should never be condoned in the name of a free market.

 

What are you talking about Byron ?

 

The reason govt makes it illegal to price gouge maybe is because if people price gouge the people who need food for example or medicine for example may turn on the people who price gouge.

In turn those people who price gouge may be injured or their property destroyed. That can very easily led to looting on a massive scale which then leads to property damage and break down of society. You then have the police overrun which leads for the military to be called in and things go downhill from there.

In theory people should not use violence or intimidation but in reality if people are hungry or they feel threatened or they think a loved one is in danger a large percentage of the population has a very high probability of going a off the reservation. Once small groups start to get what they want and a positive result from their actions the people watching will do the same thing (it is called the herd mentality)

There are people out there who are basically very good people who are capable of doing very bad things in certain situations and to believe otherwise is a very big mistake on the part of some people.

As a species we have advanced to where we are through co-operation, price gouging does not encourage co-operation. In a western society people expect law and order, if it breaks down there are certain people who will not fair as well as others. You do not want to be in that group of people and the ability to change your thinking will determine that.

What you think should happen or what you want to happen or what you think is the right thing may not be what happens and if you can not adapt to that you may have a very bad day.

 

I personally don't condone violence in any situation but in the real world that is what is likely to happen. My situation if confronted with such a situation would be to pay the price asked to save my daughter, but why such I buy from this guy again.self regulation?

Also if the situation was ever reversed and he wanted to buy some essential off me to save his son, I would sell at the lower price,, Two wrongs don't make a right.

I well remember Auspam giving me a serve when I first joined SS.. He said I was wrong in helping the flood victims. I might not die rich but I don't care.

In times of an immediate crises, there is no time to seek government help,, It is your family and your community who can give help at that very moment of imminent disaster.

Which economic system is the better? Neither. It is a Corporate world now. Survival of the smartest.

Regards Errol 43

 

Govts make of illegal because they (and most people) thinks its immoral. We just need to educate people that it isn't immoral and that it actually helps increase supply of the goods in the fastest time.

The alternative is fixed pricing. This will PREVENT others coming in to supply extra goods and so the problem will exist for much longer with severe shortages. (Why would I drive all the way to the next town to sell bread if I can't charge extra?)

 

If people are on the verge of rioting because you want to charge $1300 for a generator rather than $800 I can't see them even bothering about paying $800. Where's the line? $1,000? $900? $810? Maybe it's gouging when you insensitively charge anything after people have just lost their homes. I feel pretty damn gouged when people charge me $6 for a medium cup of coffee and Ferrari & Bentley openly gouge their customers on their products and don't get me started on those damn ATM fees We should simply ban all profit dammit and price fix everything to what someone on unemployment entitlements can afford. I want my cake and to eat his too. I'll riot if I don't get my $10,000 Ferrari.

 

I am not talking about a generator, I am talking about essential items, items people need to survive.

There are people who will riot over a loaf of bread or someone burning a book.

Is there an ignore feature on the forum? I am going to have to have a look.

 

I wish more people were kind hearted like you Errol.

Likewise I would rather my own home be worth less if it meant cheaper, more affordable homes for my children and all future Aussie youth, as opposed to greedy boomers and land developers selling to overseas non citizens.

That's the problem with "libertarians" no sense of community just "me, me, me".

 

The video I posted, has a presenter called John Stossel. He has a weekly one hour show on the evil scary Fox News Network in America. He has an interesting personal story, he used to be a consumer affairs reporter (at CNN I think?) who went around looking at consumer problems and interviewing people going "Why doesn't the government do something" about whatever the issue was. He'd then go on to helpfully tell consumers about the new laws or regulations developed to 'protect' them.

As time went on, he observed the government 'solutions' ended up creating more problems than they were meant to solve, or even made the original problem worse. He is now a convert to libertarian thinking and his broadcasts in Youtube video form are worth seeking out. I recommend them to you, Bordsilver, and anyone else who wants to see what a libertarian in a mainstream news context can highlight.

He talks about the Fed, school funding, public sector unions, green regulations, exposes on the nanny state. A bit of everything. A favourite of mine is a broadcast he titled 'Taxed to Death'.

 

I guess it was only a matter of time until you went there.

1. There is a BIG difference between rational self-interest and selfishness (but this in itself doesn't mean that selfishness isn't beneficial). Although Libertarians are not Objectivists, Ayn Rand made very good contributions to the world explaining why altruism is really evil.

As Adam Smith famously said:

2. Libertarians are actually advocating a mutually constructive society in which your interests are looked out for as well as mine. This can only be attained by a clear pursuit of everyone's freedom and protection of rights and not just the granting by fiat of privileges to the few. Libertarians openly say that we do not know what is best for you but we will happily provide any service that you want in open exchanges and cooperation. It is indeed humility, open cooperation and mutual trust and reliance that are the hallmarks of Libertarianism.
3. Do not confuse the fact that economics is the study of how wealth is created and maintained with economists having a myopic focus on greedily grabbing money from all and sundry.
4. Libertarians are extremely strong advocates and researchers of charitable enterprises. The key thing is that they are voluntary and never forced upon people who believe they have better uses of their time and meagre resources than giving it to a so-called leader who thinks they know what is best for others with no way of telling if their claims are really true (and almost no way of directing them to the options that are really beneficial). You could say a synonym of Libertarianism is Voluntarism.

Edit: Oh, and the fundamental concept that economists understand and frequently trot out to denounce a range of interventionist policies that seem to be fixing a problem is opportunity cost. Anyone really interested in how our scarce resources should be allocated to the best possible uses needs to understand what opportunity cost is. If they don't they will always make life worse overall in the process of trying to "fix" a perceived problem (the road to hell is paved with good intentions, as they say). The fact that resources are scarce is what is harsh, not that people who understand opportunity cost and scarcity are selfish by promoting certain options.

 

Mate what I am talking about are essential items such as food or medicine, whatever people would need to survive. It does not matter who it is, myself I can look after. If it came down to a medicine my child needed to survive normally costs $100 and I go to the pharmacy and it is now $500 and the ATM is down you have a very volatile situation.

It would not matter who's child it was, if you were in line and it happened to you and your child needed the medicine but the price is now 5 times higher my first option would be to give you the cash to pay for it. If it came down to someone trying to make money of your sick child and they were putting your child or my child at risk I am in front of you getting your child what they need. End of story, your kid is getting what they need, it is not about money it comes down to the welfare of the individual. People come before money in my opinion.

If someone wants to charge 5 times the amount for a play station or packet of chips I do not care, I would walk away. Try and benefit off the misfortune of another human being and there is a very, very big problem in my opinion. For example if the product was a basic staple like rice and someone jacked up the price and people were going hungry and suffering.

As for violence there are certain times when it is appropriate, it is nearly always controlled in how it is applied by "the state". Things like "justifiable violance" I think it is called from memory.

I personally would have no problems using extreme violance if it meant protecting the welfare of my children for example.

 

He gave you a serve for helping flood victims? I say good on you and I am sure a lot of them would repay you in the future if you needed a hand. Helping others also earns you the respect of people within the community.

I have no doubt there are people here who would take the lunch money off a 10 year old and try and justify it as being the right thing to do.