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Thread: Price gouging

  1. #1

    Price gouging

    How do you define it?

  2. #2
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    In a similar way I'd describe unicorns.

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    [QUOTE=BrooklynBound;2831711]How do you define it?[/QUOTE]

    Hmmm....good question.

    I'd probably say charging excessively more than the market would normally bear because of some anomaly. For example, the local municipality has a temporary water problem, say contamination, where they have to turn off water for 24-48 hours. The local supermarket starts selling 16oz. bottles of water for $10.

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    [QUOTE=jetstream23;2831742]Hmmm....good question.

    I'd probably say charging excessively more than the market would normally bear because of some anomaly. For example, the local municipality has a temporary water problem, say contamination, where they have to turn off water for 24-48 hours. The local supermarket starts selling 16oz. bottles of water for $10.[/QUOTE]

    And why shouldn't they? If people are willing to pay that amount instead of driving one town over to buy it elsewhere?

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    [QUOTE=Guido Monzino;2831752]And why shouldn't they? If people are willing to pay that amount instead of driving one town over to buy it elsewhere?[/QUOTE]

    Agreed, it is supply and demand but there is usually an element of collusion involved (i.e. the price one town over is being raised as well and possibly fixed) which, during a local emergency like a water shortage, usually isn't legal.

  6. #6
    [QUOTE=jetstream23;2831742]Hmmm....good question.

    I'd probably say charging excessively more than the market would normally bear because of some anomaly. For example, the local municipality has a temporary water problem, say contamination, where they have to turn off water for 24-48 hours. The local supermarket starts selling 16oz. bottles of water for $10.[/QUOTE]

    How is excessive defined? How would a vendor know when he is charging excessive prices?

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    [QUOTE=BrooklynBound;2831769]How is excessive defined? How would a vendor know when he is charging excessive prices?[/QUOTE]

    How would the vendor know?

    Well, I'd say that if the price is raised on essential goods like food, water, fuel, etc. in direct association to a specific emergency or disaster that is price gouging.

    If profit margins are being maintained (i.e. the producer prices have gone up such that the cost to the local market is higher) than that probably isn't price gouging. But, if the super market usually pays Dasani $0.82 for a bottle and sells it for $0.99, then raises the price to $10 without an associated increase in the $0.82 cost then I'd be a little suspicious.

  8. #8
    [QUOTE=jetstream23;2831786]How would the vendor know?

    Well, I'd say that if the price is raised on essential goods like food, water, fuel, etc. in direct association to a specific emergency or disaster that is price gouging.

    If profit margins are being maintained (i.e. the producer prices have gone up such that the cost to the local market is higher) than that probably isn't price gouging. But, if the super market usually pays Dasani $0.82 for a bottle and sells it for $0.99, then raises the price to $10 without an associated increase in cost then I'd be a little suspicious.[/QUOTE]So if supply goes down, price shouldn't go up?

  9. #9
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    [QUOTE=BrooklynBound;2831788]So if supply goes down, price shouldn't go up?[/QUOTE]

    Specifically as it relates to essential items in an emergency situation, I'd say no. But if you have a heart attack at a restaurant, and I'm the only doctor in the room (low supply), I guess I could probably negotiate half a million out of you in 10 seconds or less.

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    [QUOTE=BrooklynBound;2831711]How do you define it?[/QUOTE]

    Are you asking the question in a particular context? I guess if you are a strict free-market, supply and demand type, then there's no such as thing of price gouging--you support the notion of charging as much as you can any time you can get it. But much as I believe in the free market there are ethical considerations with being human and a member of a community--you don't charge a starving man $100 for a loaf of bread just because you know that as a starving man he'll pay any price.

    As to what level of profit actually constitutes price gouging I can't say, but like pornography, you know it when you see it. Take the gas station owner whose tanks are full of gas he paid $2.50 a gallon for but when oil prices spike he raises the price of that gas to $5.00. Or take a supermarket that raises the price of food just before a hurricane.

  11. #11
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    I am for free markets but I think there need to be some protections put in place when markets are acting abnormally and the goods in question are "essential." And no, I don't have a perfect definition of essential but I've touched on some examples in this thread already.

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    [QUOTE=BushyTheBeaver;2831800]Are you asking the question in a particular context? I guess if you are a strict free-market, supply and demand type, then there's no such as thing of price gouging--you support the notion of charging as much as you can any time you can get it. But much as I believe in the free market there are ethical considerations with being human and a member of a community--you don't charge a starving man $100 for a loaf of bread just because you know that as a starving man he'll pay any price.

    As to what level of profit actually constitutes price gouging I can't say, but like pornography, you know it when you see it. Take the gas station owner whose tanks are full of gas he paid $2.50 a gallon for but when oil prices spike he raises the price of that gas to $5.00. Or take a supermarket that raises the price of food just before a hurricane.[/QUOTE]

    If a man chooses to be a d-bag and charge the hungry man $100 for bread, that is his right as a human being. Even d-bags have rights.

    If the hungry man has $100 and chooses to spend it on a loaf of bread instead of 100 packets of Ramen noodles, then I guess we know the reason he's a starving man in the first place.

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    [QUOTE=Guido Monzino;2831813]If a man chooses to be a d-bag and charge the hungry man $100 for bread, that is his right as a human being. Even d-bags have rights.

    If the hungry man has $100 and chooses to spend it on a loaf of bread instead of 100 packets of Ramen noodles, then I guess we know the reason he's a starving man in the first place.[/QUOTE]

    Absolutely disagree. Where is your Christianity (or if you're a humanist, your humanity)? In the year preceding the French revolution, with people in Paris starving to death in the streets, grain speculators actually sank ships full of grain to keep the prices high and increase their profits. Your Ramen noodle analogy is a "let them eat cake" non-sequitor. As for the "even douche bags have rights" argument, well then, the people you're douching equally have have the right to kill you. After all, you're killing them. (Understand, I'm talking a life/death scenario of price gouging, not charging an extra 50 cents at the pump).
    Last edited by BushyTheBeaver; 10-29-2008 at 11:42 PM.

  14. #14
    [QUOTE=BushyTheBeaver;2831827]Absolutely disagree. Where is your Christianity (or if you're a humanist, your humanity)? In the year preceding the French revolution, with people in Paris starving to death in the streets, grain speculators actually sank ships full of grain to keep the prices high and increase their profits. Your Ramen noodle analogy is a "let them eat cake" non-sequitor. As for the "even douche bags have rights" argument, well then, the people you're douching equally have have the right to kill you. After all, you're killing them. (Understand, I'm talking a life/death scenario of price gouging, not charging an extra 50 cents at the pump).[/QUOTE]
    Not exchanging property at below market value is NOT killing someone. Customers don't have rights to a vendor's goods at the price that HE wants.

    Christianity? This is a personal moral issue, not a legal issue.

    If we're in a life or death scenario, then a good is worth a hell of a lot more than it would be on a regular Wednesday.

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    [QUOTE=BrooklynBound;2831832]Not exchanging property at below market value is NOT killing someone. Customers don't have rights to a vendor's goods at the price that HE wants.

    Christianity? This is a personal moral issue, not a legal issue.

    If we're in a life or death scenario, then a good is worth a hell of a lot more than it would be on a regular Wednesday.[/QUOTE]

    I asked earlier in what context you were asking the question. You never answered. What is the specific situation that caused you to ask the question? Sounds to me like you're trying to screw somebody and at the same time want to be patted on the back for doing it. If I'm wrong, correct me.
    Last edited by BushyTheBeaver; 10-29-2008 at 11:56 PM.

  16. #16
    [QUOTE=BushyTheBeaver;2831837]I asked earlier in what context you were asking the question. You never answered. What is the specific situation that caused you to ask the question? Sounds to me like you're trying to screw somebody and at the same time want to be patted on the back for doing it.[/QUOTE]
    There's no specific situation, I was just asking in general. If I'm screwing someone, then he doesn't have to buy it. I'm not asking to be patted on the back, I'm just asking for people to not take other people's property against their will.

  17. #17
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    [QUOTE=BrooklynBound;2831844]There's no specific situation, I was just asking in general. If I'm screwing someone, then he doesn't have to buy it. I'm not asking to be patted on the back, I'm just asking for people to not take other people's property against their will.[/QUOTE]

    Got it. Apologies if I misinterpreted your position. So what's you're own take on the matter? Is there such a thing as price gouging? And if so, should it be considered wrong (either legally or ethically)?

  18. #18
    [QUOTE=BushyTheBeaver;2831850]Got it. Apologies if I misinterpreted your position. So what's you're own take on the matter? Is there such a thing as price gouging? And if so, should it be considered wrong (either legally or ethically)?[/QUOTE]

    I could see why people wouldn't charge the highest price possible, but I don't see why there should be laws regarding it.

  19. #19
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    [QUOTE=BrooklynBound;2831852]I could see why people wouldn't charge the highest price possible, but I don't see why there should be laws regarding it.[/QUOTE]

    I'd say it depends on the goods or commodity. Luxury items? Charge what you want--no one needs them to live. But very basic staples that are essential to the life of the community are different. Suppose you and I live in a very small community and I, a farmer, am the only source of grain. Without access to my grain, the community starves and dies. Now suppose realizing this I decide to raise my prices to the point where half the community won't be able to afford it and will die. (You might say this is short-sighted on my part cuz I'm killing half my customer base, but the world has no shortage of greedy, short-sighted profit takers.) Should I have a a right to do this anyway? Well, if we lived in a plutocracy where might defines right then, yes, I would. But we don't live in a plutocracy. We live in a democracy where everyone has a vote, and voters have the right to place the greater good of the community above the profits of a single individual.

  20. #20
    [QUOTE=BushyTheBeaver;2831866]I'd say it depends on the goods or commodity. Luxury items? Charge what you want--no one needs them to live. But very basic staples that are essential to the life of the community are different. Suppose you and I live in a very small community and I, a farmer, am the only source of grain. Without access to my grain, the community starves and dies. Now suppose realizing this I decide to raise my prices to the point where half the community won't be able to afford it and will die. (You might say this is short-sighted on my part cuz I'm killing half my customer base, but the world has no shortage of greedy, short-sighted profit takers.) Should I have a a right to do this anyway? Well, if we lived in a plutocracy where might defines right then, yes, I would. But we don't live in a plutocracy. We live in a democracy where everyone has a vote, and voters have the right to place the greater good of the community above the profits of a single individual.[/QUOTE]
    Why should democracy degrade property rights? I own something, and you do not have the right to take it from me at a price that you want. It's not about might, it's about property rights.

    What if land was scarce and the people wanted to knock down your house so that a high-rise apartment could be built and more people could live there. The people who want your land and house don't have the money to pay you market value, but they REALLY, REALLY need it. After all, housing is essential. So you'll have to accept a price that they think is fair. How would you feel about that?

    And how would your example even come to fruition? Why would I rather have you die than sell it to you? I'd rather sell it to you. Maybe you'd rather pay less, but I'd rather pay less for everything. I wish was my food bill cost $1.

    Also, using your example, anyone who doesn't sell food to the poor/homeless at low prices that they can afford are "price gougers." They go hungry every day because they don't have the money to buy essentials.
    Last edited by BrooklynBound; 10-30-2008 at 12:27 AM.

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