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Trading for less than value

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I am still learning about Objectivism; I understand the gist of it, but have trouble understanding some of the edge cases.

 

I would be interested in learning the opinions of other Objectivists on the following:

 

If person A would like to buy something from person B and person B would be willing to accept an amount of money that is far less than the value of the item to be purchased (and person A knows this is true), is it ever immoral to "take advantage of" person B?

 

There are several reasons person B could be willing to make the deal:

1) The need to sell quick

2) Lack of knowledge of the market value of the object to be sold

3) Mental disability

 

I am curious if paying virtually nothing for the object (if the seller is mentally disabled) would be a violation of the trader's principle ("giving or tak[ing] the undeserved"), or if the mentally ill would be considered non-consensual due to their condition.  At the same time, I understand that there is no obligation to help them by buying from them.

 

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I will not comment about the mental disability aspect, only the others.

There are many reasons why a rational person would choose to "loss lead", so no... it is not unethical (all other things being equal) to purchase for less than a thing is worth.

Think about bars and "Happy Hour"
Happy hour is in many places a "loss lead"- that means you lead people in that wouldn't otherwise come in with a small loss to yourself. There are many reasons to do this.

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If B has a copy of the 1936 first edition of Ayn Rands We The Living, and A knows that it's market worth would fetch at least a cool 10k, but B doesn't know that and then asks B "Hey, you think I could have that, or buy it off of you for a couple of bucks? I've always liked that novel, just never had a copy of it myself" and B says, "Take it. Someone bought it for me years ago, but I like reading nonfiction books on Russia, not fiction."

Perfectly moral.

Edited by intellectualammo
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I am curious if paying virtually nothing for the object (if the seller is mentally disabled) would be a violation of the trader's principle ("giving or tak[ing] the undeserved"),

Yes, of course: "He [a trader] deals with men by means of a free, voluntary, unforced, uncoerced exchange—an exchange which benefits both parties by their own independent judgment. "

 

Same goes for taking advantage of other people's ignorance. Not for taking advantage of the need to sell quick, though: if a man has the capacity and knowledge to judge that selling quick and for less money will benefit him, then a trader should respect his judgment.

 

The trader principle is more than just the political principle of individual rights. It's more than just "go out there and make money without breaking any laws". A businessman should be a leader: someone who concerns himself with the well being of his employees, clients, trading partners, and everyone else he deals with. That is the only way one can be successful, in the long term, as a businessman, in a free society.

 

If you're really interested, watch this (hour long) lecture John A. Allison (former CEO of BB&T - a major American bank: one that didn't default in 2008) to a group of young business managers. It's centered around Ayn Rand's trader principle.

 

 

If B has a copy of the 1936 first edition of Ayn Rands We The Living, and A knows that it's market worth would fetch at least a cool 10k, but B doesn't know that and then asks B "Hey, you think I could have that, or buy it off of you for a couple of bucks? I've always liked that novel, just never had a copy of it myself" and B says, "Take it. Someone bought it for me years ago, but I like reading nonfiction books on Russia, not fiction."

Perfectly moral.

No, it's not perfectly moral. There's nothing moral about lying to screw people out of their valuables for pennies. Furthermore, there's nothing profitable about it. If you're a scumbag, people will just learn to avoid your business.

Edited by Nicky
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Ayn Rand  made a clear distinction between absolute and commercial value. A value of loaf of bread is far less than gold of the same weight. However for the starving person bread is much more valuable than gold and he will gladly and voluntary make such an exchange which is proper and moral.One biblical character even sold his birthright for the lentil soup.

Edited by Leonid
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Yes, there was. You're saying that the reason why you want to buy the book is because you always liked it, but never had a copy. In reality, the reason is that it's worth 10.000 dollars.

Wrong. Person A wanted it because he always liked it. No where did it say he was going sell it, you are assuming that. He told the whole truth completely. Person A knew the value of it, while B did not. Nothing morally wrong for A to ask B if he could have it or buy it for a few bucks. Edited by intellectualammo
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Wrong. Person A wanted it because he always liked it. No where did it say he was going sell it, you are assuming that. He told the whole truth completely. Person A knew the value of it, while B did not. Nothing morally wrong for A to ask B if he could have it or buy it for a few bucks.

Yeah, I'm gonna stop talking to you now.

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Thank you for that John Allison link, Nicky.  I found it to be very helpful in answering my question!

By the way, I do not like emotional arguments, like calling intellectualammo a "scumbag."  I find it much more useful/convincing to elaborate on why it is wrong:

In objectivism, an act is wrong if it is self-destructive.  Nicky mentions that being deceitful is self-destructive because "people will learn to avoid your business."  Also, Nicky's link mentions that honesty is the foundation to human relationships and that it should be a person's goal to improve their personal values.  Therefore, even if other people would never learn about this specific transaction, it would be immoral because "Person A" would be acting self-destructively in the long-term by tainting his/her own personality.  Lying can easily become a habit, which would make it difficult to build benefitial human relationships.

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laz,

 

I don't think that was a case of Nicky personally calling I.A a "scumbag".  I believe he was trying to make the point that if you get a reputation for going around taking advantage of the short comings of your fellow man you run the risk of others not coming to very flattering judgements concerning your basic character.   There's a big difference between between being a savy, knowledgeable, hard barganing, Trader that knows how to deal with others to mutual benefit and being some one who just goes around preying on the cupidity of the lesser lights among us.

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It is wrong to take advantage of the mentally disabled who cannot make a fair deal. Instead, you should deal with those who are legally responsible for them. I never want unearned wealth, and taking advantage of those incapable of dealing with me as an equal is right up there with armed robbery.

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