Price Gouging

Abstract: Price gouging arises when, in the wake of a disaster, retailers roughly increase their prices for basic commodities to gain more revenue. The majority of people believe that price gouging is immoral others that it is a fully justified behaviour. The rationale of this document is to investigate a quantity of issues surrounding price gouging, and to argue that the widespread ethical criticism of it is for the most part incorrect. I will also attempt to illustrate price gouging from philosophical views of Aristotle and Immanuel Kant.

Introduction

Prices for critical goods are expected to rise when a disaster strikes. Price gouging is not legally prohibited but it is generally thought to be immoral and exploitive. The rationale of this document is to investigate a quantity of issues surrounding price gouging, and to argue that the widespread ethical criticism of it is for the most part incorrect. I will make this argument in four steps: 1) explaining the difference in philosophical views between Immanuel Kent and Aristotle, 2) clarifying The Moral Status of Laws Against Price Gouging 3) clarifying The Moral Status of Laws Against Price Itself 4) presenting ethics of Price Gouging.

Difference in philosophical views between Immanuel Kent and Aristotle

The basic philosophy of Aristotle opposed to the contemporary ideas of Immanuel Kant created a good competition for the most intriguing analysis of the human good. Nevertheless, after studying each philosopher’s beliefs, Kant’s view spoke about the good in a collective sense throughout the unconditional imperatives of man, on the other hand Aristotle stated that, “Happiness, then, is something final and self-sufficient, and is the end of action.”(Nicomachean Ethics, 1999) In his book “Nicomachean Ethics” Aristotle invited the reader to give an explanation of what he believed is good. Aristotle listed various frequent examples such as having friends, experiencing pleasure, being healthy, and so on. Aristotle supplemented his disagreement by reaching to the origin of every good action. He observed that if a man kept questioning different actions he reasoned as good, he would discover that every good action lead to some shape of happiness. Aristotle characterised the utmost good as “eudemonia” or happiness. To accomplish eudemonia, man is required to develop virtue within in his life. Aristotle explained virtue as the tendency and willingness to perform with distinction in every situation. It is the constant virtuous activity over the duration of man’s life that will reach eudemonia.

In opposition, in “Grounding for the Metaphysics of Morals” (Kant, 2002) Kant declared, “A good will is good not because of what it effects or accomplishes, nor because of its fitness to attain some proposed end; it is good only through its willing, i.e., it is good in itself”. Good will is the law on which the utmost ethics rest, letting man to conclude actions with the most moral worth, “…good will appears to constitute the indispensable condition even of the worthiness to be happy” (Kant, 2002). Kant alleged good will is the only entity that is actually good in itself and not a product of anything else.

Kant wrote: “The Formula of Universal Law: Act only in accordance with that maxim through which you can at the same time will that it become a universal law’’ (G 4:421; cf. G 4:402)” (Kant, 2002). His reasoning being everyone makes their own happiness but at the same time if the action can be applied collectively to all humans, then the action would understandably be believed as a good.

Immanuel Kant would oppose to Aristotle’s idea of the good through Aristotle’s meaning of virtue. Kant would declare that if a man is excessively honest in every situation, just to reach the mean of his actions, he would need to lie. Therefore the consequence of these actions
would be that there is no truth, since everyone was meant to tell lies. Man tells lies for the consideration of being assumed as it were a truth. On the other hand, Aristotle would oppose to Kant’s idea of the good on the root of eudemonia. In his point of view happiness is at all times the fundamental motive for any action. Aristotle would also comment that it’s extremely unreasonable to characterise common duties to all of mankind, since those duties certainly cannot be kept in every situation possible.

The Moral Status of Laws Against Price Gouging

The disagreement in this part is intended to demonstrate that laws against price gouging are ethically unjustified. Countless amounts of people feel that price boosts for the duration of emergencies are unreasonable, but policy analysis needs more than a survey of public attitude towards the matter.

One complexity with anti-gouging laws is that there is no easy way of setting the norm of price gouging for legal reasons. Laws which forbid price enhancement beyond a specific level charge improve on the aspect of simplicity, but embark on other complications as a consequence of the nonflexible limits they set. This increases troubles from both equality and coherence perception. “In terms of fairness, it is not clear why the merchant should be forced to absorb the increased costs in order to benefit her customers, especially if we think that those merchants exercised good foresight and responsibility in obtaining a ready stock of goods which might be necessary in the case of a disaster.” (Zwolinski, 2008)

Although the price they are being charged is extremely high and greater than customers would preferably like to pay, the reality is that they are eager to pay it. This states that they rate the good they are acquiring more than the cash they are giving up for it.

Even though practical complications may possibly be defeated, yet, there would still remain an important moral contemplation adjacent to anti-gouging laws. The most important motive why such laws are ethically unjustified is that they forbid equally beneficial trade in a way that leaves those who are already helpless even worse off.

The Moral Status of Laws Against Price Itself

• Coercion – theoretical explanation of coercion differ, therefore it is tricky to give a universal denial of this claim, on the other hand we can note that the majority cases of price gouging have three characteristics that appear to undermine anxieties about coercion on roughly any understanding of that theory. Firstly, the majority of buyers in price gouging cases agree to the exchange. Secondly, generally cases of price gouging do not engage cheating, lack of information, or foolishness from the buyers, which enter to the exchange voluntarily. Lastly, in contrast to standard cases of coercion, the loss, which might fall on the victim, is not provoked by the price gouger but rather by the disaster or emergency from which the buyer is trying to recover.

• Exploitation- another and much more established apprehension about price gouging is that it is wrongfully exploitative. It is unjust for sellers to take benefit from buyers’ liability with the purpose of obtaining unequal profit for themselves, even though buyers are also benefitting from the exchange. There are, however, some dilemmas concerning the incorrectness of mutually beneficial exploitation as contrasted with the actions of most non-gougers. “The puzzles have to do with incoherence in our thinking about what morality requires of us in terms of aiding those in distress. On the one hand, to the extent that we hold that price gougers are guilty of mutually beneficial exploitation, we hold that they are acting wrongly even though their actions bring some benefit to disaster victims. On the other hand, many of us do nothing to relieve the suffering.” (Zwolinski, 2012)

• Prices and Efficiency- When operating accurately, markets have a propensity to distribute resources toward their most valued uses. Those individuals who rate a good more will be keen to pay a superior price for it than those who value it less. The valid question is not whether the price scheme is an ideal method for apportioning goods to their most valued use, but whether it is the finest approach than the existing alternatives. “When it does, and when we have no alternatives available which better satisfy our moral obligations, we have good reason to view price gouging as morally permissible.” (Zwolinski, 2008)

Ethics of Price Gouging

Many people consider price gouging as morally wrong, therefore those who are opposed to such activity came up with the set of moral condemnation of price gougers, which are greedy, heartless, and selfish.

A number of people who choose to take part in price gouging do so from morally shameful reasons. The activity of price gouging is well-matched with a quantity of diverse ethical motivations. A few might engage in the activity because they are concerned only about their own return. Others, however, might worry both about their own prosperity and the anguish of others. Maybe it is the right thing to say that moral virtue involves more than simply doing what is morally acceptable. “The Aristotelian phronimos doesn’t simply do the bare minimum that morality permits. Someone who fully instantiates all the virtues such as justice, beneficence, and liberality, we tend to think, would be disposed to charge less than the market-clearing price, even if charging the market-clearing price passes the threshold of moral permissibility.” (Zwolinski, 2008)

Sandel characterizes the virtue argument for price gouging laws as follows:

“Greed is a vice, a bad way of being, especially when it makes people oblivious to the suffering of others. More than a personal vice, it is at odds with civic virtue. In times of trouble, a good society pulls together. Rather than press for maximum advantage, people look out for one another. A society in which people exploit their neighbours for financial gain in times of crisis is not a good society. Excessive greed is therefore a vice that a good society should discourage if it can. Price-gouging laws cannot banish greed, but they can at least restrain its most brazen expression, and signal society’s disapproval of it. By punishing greedy behavior rather than rewarding it, society affirms the civic virtue of shared sacrifice for the common good.” (Sandel, 2010)

Aristotle explained virtue as the tendency and willingness to perform with distinction in every situation. He instructs us that justice means giving people what they deserve. Therefore, in order to agree on who is worthy of what, we first need to decide what virtues are worthy of honour and reward. Aristotle’s said that every good action leads to some shape of happiness. Consequently, he would agree to the statement that if man considered price gouging as good, he would discover that it would lead him to happiness.

By distinction, contemporary political philosophers Immanuel Kant disagree that the main beliefs of justice that classify our rights should not rest on any scrupulous idea of virtue. As a substitute, good actions should be universalise, letting man to conclude actions with the most moral worth, therefore if price gouging would fall under it requirements man would know that its good activity path.

Conclusion

In this paper, I have offered a justification of price gouging. I have done so by explaining the difference in philosophical views between Immanuel Kent and Aristotle, clarifying The Moral Status of Laws Against Price Gouging, clarifying The Moral Status of Laws Against Price Itself and presenting ethics of Price Gouging.

The main question of this document was, ‘is price gouging IMMORAL, IRRESPONSIBLE OR FULLY JUSTIFIED BEHAVIOUR???’ After presenting all the facts, I can easily say that all descriptions apply. People who do not have full knowledge of price gouging will always categorise it as an immoral and irresponsible activity. On the other hand those who are involved in exchange and gain benefits will justify their answer as being justified behaviour. Still, any legal prevention of price gouging will generate discouragement for individuals to engage in economic activity which helps those made helpless by disaster. Therefore, any decisions towards solving such issues should be carefully made taken under consideration for everyone who might be involved in it.

At the end of my document I came to the conclusion that personally Kant’s view is the most suitable approach to exercise. He allows man to conclude actions with the most moral worth. He also beliefs that everyone makes their own happiness but at the same time if the action can be applied collectively to all humans, then the action would understandably be believes as a good.

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