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Price Gouging...

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emanon

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If you agree or disagree, post and tell me why so I can better understand this bizarre phenomenon.

We've just had serious flooding here in Australia, all along the North-Eastern coast.

With it has come people raising prices of things considered "essentials" like Bread and Milk to as much as $10 each... and with the rises in price have come a lot of people who are complaining about it, and how "not on" and "despicable" it is etc.

I don't get it, and I definitely don't agree. I see lots of reasons why serious price hikes are perfectly fine:

1. You aren't compelled to buy your bread and milk from that store.

2. Bread and Milk aren't essential. You can live what, upto 30-50 days without food? You don't need bread and milk that desperately to survive for a week or two, and if you do, $10 isn't a lot to pay to stay alive.

3. The people who truly need it (if there are some) would probably not be able to get any if the price were fixed at the lower price as, with product shortages, supply would run out very quickly.

4. What about increased cost of attaining the product?

5. Why the hell shouldn't they put the price up? Because you *want* bread and milk? By the same logic if you want bread and milk for free, you should get it for free too.

6. Why is it different to charge $10 for bread vs. charging $3 for bottled water? Neither of them cost a fraction of the price, the only difference is taht people think the have some right to food at whatever price they want.

I hear all the reasons, and I understand flooding is terrible, but I can't help but think that people are just complaining like a two-year-old who wants that toy in the toy-store.

If they aren't willing to use their brain, reason and ability to obtain what they want, and they aren't prepared to pay the price, then that is not the store-keeper's fault. So what if you have to eat baked-beans for two weeks. It's not going to kill you, so stop acting like a spoiled brat... (?)

Regards,

C.

Edited by emanon
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I think your counterarguments are focusing on side issues, and you haven't addressed the point that I would make first and foremost in defense of "price gouging." If you try to defend price gouging on the premise that these things aren't actually necessities, for example, you're neglecting the fundamental error in the opposing argument. Even if they were necessities, a price hike in this situation would be entirely appropriate.

The fact is, a natural disaster has occurred. Something real and massive has happened which has changed the local situation in regards to resources. Bread and milk are now in much higher demand, and there is also a reduced supply, as well as a reduced capacity to increase the supply by shipping from elsewhere. The fact is, there simply aren't enough bread and milk to sell at the old price. The first few hundred or thousand people who went in would stock up, and everyone else would be S.O.L. Trying to pretend that nothing about the real situation has changed, by trying to keep the old prices, would result in disaster, because the fact is that things have changed.

Let's say that every store in the area agreed to sell their goods at the old prices. What would happen? The first few hundred people who got to the stores would stock up, clean it out, and then they would turn around and start selling some of what they just bought to everyone else (at a much higher price). But why would this happen? Was everyone who was struck with the flood also simultaneously struck by a case of the "greedies"? Of course not. The bread and milk situation changed fundamentally, and the new prices are merely a reflection of the scarcity. People who raise prices are merely responding to that.

Furthermore, very high prices for necessities are the best way to get other people from surrounding areas to ship in more necessities. Sure, maybe most companies would send a few trucks worth of supplies, for the good P.R., but if the prices in that area suddenly go up, businesses can actually make more money by helping those who need it the most. What's best for those businesses is also best for the people hit by the flood: to ship massive amounts of necessities into the areas that need them the most.

In short, "price gouging" serves a vital purpose in recovering from the tragedy. You can't deal with such a tragedy by pretending that the price increases don't reflect real changes rather than "greed."

Edited by Dante
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As an aside, you might be surprised at the number of people on Amazon who think price gouging applies to the price of ebooks.... confused2.gif

They are constantly griping about "relative production costs" to paper books, and do not seem to understand that market value is NOT necessarily determined by production costs.

To add my own response to the price gouging idea, a man's property is a man's property... if he seeks to sell it at a higher price due to particular circumstances, he can do so because it is his property. Any other issues aside, he owes no on his property at any price other than one which is voluntarily agreed upon by both parties.

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To add my own response to the price gouging idea, a man's property is a man's property... if he seeks to sell it at a higher price due to particular circumstances, he can do so because it is his property. Any other issues aside, he owes no on his property at any price other than one which is voluntarily agreed upon by both parties.

Exactly, but it is Illegal in both America and Australia. It is ridiculous. Why shouldn't the guy who *owns* the bread/milk - after all, he paid for it so he owns it - be allowed to sell at whatever price he chooses?

It is inconsistent legislature. So, it's okay for Apple to sell their products for probably 10x their cost (and damn-straight it is okay!), but it's not okay when it comes to milk and bread?

I just... don't... understand.

And people get upset and carry on about how ghastly it is for these people. They talk about them as the "greedy shop-keepers" and one government official on the news even proclaimed that if they found out who it was, they wouldn't prosecute, they would simply make the owner's lives hell with audits, excessive health inspections etc.

He actually said that on national television as if they deserve some sort of severe punishment.

Sometimes people make me sick.

[/rant]

Edited by emanon
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