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Baklava
Honorable
Legendary Hero
Mostly harmless
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posted May 18, 2014 03:33 PM |
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Poll Question:
Profiteering
So a bunch of cities, towns and land over here is under water from the largest floods in the past century or so (bunch of rain, rivers spilling over, water flooding in from the neighbours). Things ain't so good - a lot of material damage, water encroaching on important power plants and infrastructure (destroying bridges and shyte), a bunch of displaced folk, some casualties - but we're moving on.
Anyhow, I'm here with a question.
Just back from making levees and shyte (everyday I'm shovelin) - a very refreshing turnout of volunteers, actually, as well as donations and supplies from both the industrial sector and individuals (sadly, less so internationally - a bit from the neighbours and Russians but that's about it; little to no media coverage as well) - but there were, as always, attempts of taking advantage. Namely, at some places, the prices of basic goods (food, bottled water), as well as shovels, waterproof boots and clothing, etc, grew in prices to the point of doubling or tripling. The gov's answer was a ban on this, along with the arrest of some of these enterpreneurs for profiteering.
There's been an overwhelming positive response to this among the volunteers and the general public (which is, let's face it, one of the reasons the gov did it), and it was pretty much done as a warning, but there's been a screenshot circulating Facebook depicting a comment by a person signed "Libertarian" that objects the act due to it being a violation of basic market laws and human rights and asking on what grounds were the arrests performed. While a bunch of disgruntled folk were busy replying "On the grounds of my foot in your arse" and variations thereof, needless to say I remembered you guys and thought I'd ask you 'bout what you think on this and similar profiteering issues and how they should be handled and prevented.
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Tsar-Ivor
Promising
Legendary Hero
Scourge of God
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posted May 18, 2014 03:40 PM |
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You have the freedom to extort, and the government has the freedom to cuff you and throw your immoral ass in jail.
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"No laughs were had. There is only shame and sadness." Jenny
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OhforfSake
Promising
Legendary Hero
Initiate
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posted May 18, 2014 03:49 PM |
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Let's start off with putting the boot in my arse.
Now that my arse is nicely booted. I think that:
1) The government has a responsibility towards its people, the people doesn't have towards its government (but in some (many? most?) countries there are laws which makes people responsible for each other beyond that of a parent child responsibility. [E.g. take US vs. Northern Europe. I've been told in US if there's an accident, a passerby may under no circumstances interfere in other way than calling for professional help, because if he pulls a person out of the potentially hazardous situation, he might do more harm than good. In Northern Europe on the other hand, if the person does not pull the injured out of potentially hazardous situation, he can be held partly responsible for some of the injuries sustained])
2) If not everyone tries to take advantage of the situation, then assuming an even spread of people who do not over charge, people will buy at the cheaper locations, hence taking a price sufficiently higher than what the competitor takes, will actually produce more of a loss than a gain.
Of course it may happen that everyone over charges. In my country you can see shops adjusting their prices to their competitors, and while it may be regulated by supply and demand, I've gotten the impression that all the shops takes a higher price than what they need to. Especially the price jumps looks very artificial and it's odd how all shops end up at the exact same price after a short period of time, once the prices do change. Further more, we'd a situation where a government extra tax increased the price of many products quite a lot, and it targeted products it wasn't intended to. In response the shops increased the price, a natural phenomena. As the government realized the price had gone up on the wrong items, they removed the tax. The price on the items didn't decrease.
The shops justified it by saying stuff along the lines of supply & demand had changed + inflation stuff. Of course that makes sense, but the artificial part was that the price ended up exactly the same as after the government introduced their new tax.
3) Even if supply & demand means higher prices, because e.g. it's harder to get items out to the shops and a lot of people wants to buy, it doesn't change the fact that if you place your prices beyond what the general public "can" pay, it follows some kind of reaction will come. It may be by force as what you mention, it may simply be that the demand drops and then it doesn't help having those high prices anyway. All in all, I think there's a threshold for how much certain group of items can cost before unwelcome reactions to those prices occurs and if that means selling with a loss, the dealer should probably consider waiting to sell that item until he can sell it more comfortable.
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Living time backwards
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artu
Promising
Undefeatable Hero
My BS sensor is tingling again
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posted May 18, 2014 04:07 PM |
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I'm between "That's a bit tough, simply enforcing the ban should be enough (fining, for instance)" and "You can't forbid it but the state should intervene to hand out supplies where needed."
It depends on the magnitude of things.
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xerox
Promising
Undefeatable Hero
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posted May 18, 2014 04:14 PM |
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The role of government is to protect its citizens, so it should provide supplies where needed. It doesn't have any right to forbid peaceful actions though, no matter how immoral they might be considering given the situation. I also think the sheer social pressure against the profiteers might be enough to solve the problem.
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Over himself, over his own
body and
mind, the individual is
sovereign.
- John Stuart Mill
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Vindicator
Supreme Hero
Right Back Extraordinaire
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posted May 18, 2014 04:27 PM |
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I picked that it was harsh and simply enforcing the ban should be enough, on the grounds that at the time the people were committing the crime, it wasn't actually a crime. Sure, it wasn't nice, but it wasn't illegal, and it did make economic sense to do so. That being said, I fully support the ban, and now that it is banned they absolutely have the right to arrest anyone who continues doing it.
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Corribus
Hero of Order
The Abyss Staring Back at You
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posted May 18, 2014 05:47 PM |
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Edited by Corribus at 20:15, 18 May 2014.
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The poll options aren't particularly great. The law is the law. If the government passed a law that forbids this kind of profiteering, then that's the law and it should be enforced. The more pertinent question is whether there should be such a law in the first place.
Laws against price gouging in emergencies are already in place in most western nations. I don't really have a problem with them for the most part. Yes, they run afoul of the principle of free markets, but so do a lot of other necessary regulations that nobody complains about. I think emergencies are special situations and enhanced government oversight during such specifically defined times is perfectly acceptable, in order to minimize long-lasting harm to human health, the environment, social infrastructure, and, indeed, the economy itself.
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master_learn
Legendary Hero
walking to the library
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posted May 18, 2014 06:40 PM |
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After a water flooding food and bottled water become necessities for many people,who may or may not afford to pay the increased price to get them.Even in case the water is so clean they can drink from it,food would be a problem to get.
The bigger issue is that a natural disaster(name it) could happen to our land as well and we could face the same profiteering effect on us.If we turn a blind eye to such effects now,it would be too late to complain when the problem comes to us.
If such a law is not in effect,I think the media coverage and public attitude could be enough in some countries.
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"I heard the latest HD version disables playing Heroes. Please reconsider."-Salamandre
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mvassilev
Responsible
Undefeatable Hero
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posted May 18, 2014 08:56 PM |
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I see absolutely nothing wrong with this. As demand increases due to the disaster, prices increase as well. Prices are signals and mechanisms for rationing - when prices rise, it roughly means "make more of this!", and increases in prices help alleviate shortages. Aside from the basic ethical principles of non-interference that I've written about a thousand times, there is an ironclad case for letting prices rise and fall with supply and demand.
If the companies can afford it, I would recommend them to say something like "If you don't let us sell at the prices we want, we won't sell anything at all".
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Eccentric Opinion
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Fauch
Responsible
Undefeatable Hero
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posted May 18, 2014 09:10 PM |
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we have an economic system that encourages that kind of profiteering. the need for exponential growth encourages that kind of behaviour.
were those merchants among the victims of the flood? maybe they weren't trying to make more profit but just trying to deal with a situation of crisis?
after all we don't miss example of people who feel they have to shoot down other people just so they can put food on the table, the competition for jobs is largely about that.
it's funny that everyone is obsessed about inflation, because what happens when money is rare, is there are less activities and people have to fight each others for jobs so they can get their small part of the money. it is rarity artificially caused by a lack of money, whereas our means of production could potentially allow us all to live in abundance.
well, of course, a flood makes that more difficult, but we have the capabilities to make previsionnal stocks in case something bad happens. people did it in the past, probably, among other reasons for avoiding drastic rises in prices due to temporary difficulties for getting items of first necessity.
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JollyJoker
Honorable
Undefeatable Hero
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posted May 18, 2014 09:52 PM |
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MVass, you see only half of it.
What we have is a natural disaster hitting a certain area of a country - let's say a flood desaster in New Orleans.
Free market means - since the astute businessman sees opportunities here, the raised prices will lead to an increased offer (sellers from other areas will come), until prices fall again.
However, if that's not possible - due to, for example, traffic restrictions due to the problem - free market mechanisms can't work anymore.
Bottom line is, disasters tend to negate the prerequisites for a working free-market economy. Therefore, it makes no sense to argue for it. It's a special situation.
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master_learn
Legendary Hero
walking to the library
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posted May 18, 2014 09:53 PM |
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mvassilev said:
an ironclad case for letting prices rise and fall with supply and demand.
mvass,the problem is that prices DON'T FALL with the increase of supply or decrease of demand,as they SHOULD in an ideally free market.
When the demand increases,prices get high.
When the demand decreases,prices stay on the same level.
That is the wrong part here-when there is NO demand,the price is still the same as WITH demand.
So the prices go ONLY UP.And I find the going in ONLY one direction a wrong process(market failure).
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"I heard the latest HD version disables playing Heroes. Please reconsider."-Salamandre
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mvassilev
Responsible
Undefeatable Hero
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posted May 18, 2014 10:13 PM |
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JJ:
The allocation mechanism still works even in that case. People are more careful with their stuff (since replacing it is more expensive), those who have extra have an incentive to sell, etc. And the rationing mechanism still works - if prices didn't rise, shortages and/or long lines would be likely.
ML:Quote:
When the demand increases,prices get high.
When the demand decreases,prices stay on the same level.
This is completely not true. If you look at the prices of electronics, say - the real prices, adjusted for inflation - you'd see them falling.
You think prices don't fall? Are you serious?
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Eccentric Opinion
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JoonasTo
Responsible
Undefeatable Hero
What if Elvin was female?
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posted May 18, 2014 10:13 PM |
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In a perfect world, no, there would be no reason to regulate such profiteering.
In the world we live in the perfect free market just does not happen. If there are no laws companies will just get together and decide what they will charge. Should a disaster happen that would increase the need for something like bottled water, that is not a luxury item anymore, it will be priced RIDICULOUSLY high because people MUST buy it or die. They don't have a choice in the matter. So it will be priced as high as possible to make the most profit out of it.
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DON'T BE A NOOB, JOIN A.D.V.E.N.T.U.R.E.
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Fauch
Responsible
Undefeatable Hero
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posted May 18, 2014 10:13 PM |
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Edited by Fauch at 22:24, 18 May 2014.
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Quote:
mvass,the problem is that prices DON'T FALL with the increase of supply or decrease of demand,as they SHOULD in an ideally free market.
and actually, the increase of supplies is simply wasted if it doesn't come with an increase of the money in circulation, or at least, if there isn't enough money in circulation to buy and consume the excedent of production.
Quote:
And the rationing mechanism still works - if prices didn't rise, shortages and/or long lines would be likely.
so it's ok to make people starve? we largely have the means to avoid shortages. people have been facing such crisis and dying because of them for a long time, so they found solutions. it seems that even the stock exchange was initially meant to protect productors against such unpredictable events, before some people decided to corrupt it for their own profit. now it rips off those people it was initially meant to protect.
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master_learn
Legendary Hero
walking to the library
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posted May 18, 2014 10:28 PM |
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Electronics is an example,where the prices DO get lower.
I might have written it more polar than it should be written.
In some cases,prices fall.In some cases,they stay the same.
The key in that is the company,which provides the supply.
If there are few big companies or one big company,the prices reflect the interest for profit of that company,regardless of events upon it's customers.
Well,there might be a number of companies,which would take care of their costomers(including lowing prices),I am just skeptical about that.
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"I heard the latest HD version disables playing Heroes. Please reconsider."-Salamandre
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mvassilev
Responsible
Undefeatable Hero
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posted May 18, 2014 10:57 PM |
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Companies don't decrease their prices because they care about their customers, they decrease their prices to stay competitive - because other companies are decreasing their prices too.
And even monopolies are subject to market pressures.
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Eccentric Opinion
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meroe
Supreme Hero
Basically Smurfette
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posted May 18, 2014 11:05 PM |
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My sentiments are exactly the same as Corribus.
When it comes down to national emergencies, the Government is right to forbid that type of profiteering, as it isn't a simple case of supply and demand - i.e. all the kids want the new iPad, so lets put up the price. Because then you make the conscious decision to either buy your kid the iPad and swallow the costs or just beat the child 
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Meroe is definetely out, sweet
as she sounds sometimes, she'd
definetely castrate you with a
rusted razror and forcefeed
your genitals to you in a
blink of an eye - Kipshasz
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JoonasTo
Responsible
Undefeatable Hero
What if Elvin was female?
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posted May 18, 2014 11:06 PM |
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Without any regulation there would just be cartels or monopolies in everything though.
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DON'T BE A NOOB, JOIN A.D.V.E.N.T.U.R.E.
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mvassilev
Responsible
Undefeatable Hero
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posted May 18, 2014 11:17 PM |
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Except that cartels are hard to maintain, as are monopolies - it's why Rockefeller had difficulty establishing one, and why most industries today don't even come close to a monopoly.
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Eccentric Opinion
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