| | I came into this discussion rather late, which is why I am just now responding to Scott De Salvo's first reply (Post 1) of this thread. He wrote:
"There is something unsavory about kicking someone when they are down. And that is precisely what you do when you make outrageous demands of another man when you have something he must have.
"Why don't surgeons demand 20 million dollars per surgery when its a life threatening ailment in an emergency room, why dont they run a credit check on the sick person, and then gouge them so that they are penniless? Why not? The sick person has the demand for the surgery, the surgeon the supply." Etc.
Hi Scott! May I ask you a question? It's a rather simple question really. Is a person morally justified in refusing to work for others, if they need his services? Or do the needs of others confer a moral claim on his life, his time and his energy? If, as I think you would agree, he is morally justified in quitting his job or in refusing to offer his services for money, despite the fact that others may need them, then why isn't he morally justified in making his services available at an exorbitant price if he thinks that others will pay it? Making his services available at an exorbitant price is a better deal for consumers than not making his services available at all, wouldn't you agree? Well, if he is justified in not making them available at all, then surely he is justified in making them available at an exorbitant price. Conversely, if he is not justified in making them available at an exorbitant price, then he is even less justified in not making them available at all, in which case, he is a moral slave to the needs of others.
Let's assume, for the sake of argument, that he is indeed a moral slave to the needs of others - that he is ~not~ morally justified in refusing to perform a service for those who need it. In that case, what price is it moral for him to charge? And how does one determine what price that is? Under economic altruism, the standard cannot be supply and demand, because supply and demand depends on the profit motive; it depends on charging whatever price the market will bear. If the market will bear an exorbitant price, then that is the price dictated by the law of supply and demand.
Of course, an exorbitant price will bring an exorbitant profit, and exorbitant profits invite competition. Others will want a piece of the action, so they will underbid the "price gouger" in an effort to make a (slightly less) exorbitant profit for themselves. Even in the case of a one-horse town, suppliers will be lured from other towns by the scent of money, and will come galloping in as fast as their steads can carry them. As competition increases due to the increased supply being offered for sale, profit margins will decline to the point at which there is no longer an above-average rate of return. Consumers will wind up getting all they need at rock bottom prices.
But suppose that due to the morality of altruism, according to which the producer is the moral slave of the consumer, the supplier keeps his prices low even in the face of a scarce supply and a vastly increased demand. In that case, there will be no incentive to increase the supply as needed, and as a result many consumers won't receive the service, because there will be no extra profit to be had by transferring supplies from other locales where the demand for the services is less urgent. By sacrificing his profits to the needs of consumers, the altruistic business person indirectly and unintentionally sacrifices the needs of the very consumers that he or she is seeking to benefit.
You continue, "What about an ambulance...why dont the drivers stop at an accident scene and haggle with the family of the 11 year old who just got run over by a car, life drifting away, second by second? They have the supply, the boy's family the demand. It's all okay, right?"
Because that's not a profitable way to do business. People would already have purchased medical coverage, with the price determined by competitive bidding between medical providers. Very few people would be stupid enough to negotiate such services at the scene of the accident, especially if they knew that no ambulance would answer their call for help if they were not covered to begin with. People routinely purchase accident insurance, so that they are covered in such cases. They would purchase medical insurance for the same reason. A hospital is a business, not a charitable organization. It cannot be expected to offer free medical care to those who are unwilling or unable to pay for it. If a person is too poor to afford medical coverage of some kind, he can apply for charitable assistance from those who are willing to provide it. But he must earn even that by showing that he is not an irresponsible wastrel. He cannot demand that others take care of him, based solely on his need for such care.
You ask, "Why dont I just charter a large helicopter and offer to rescue those New Orleaners who can come up with the most impressive array of cash, jewelry and loot? Or I could go down there with insulin for the legions of diabetics and open up shop. Only $10,000 per shot, I don't care where you get the money."
If insulin were needed, such that people were willing to pay $10,000 for it (a price that is substantially above cost), don't you think other providers would see a profit opportunity in offering it for less? The reason people don't charge exorbitant prices is because they can't sell their products at those prices; others would underbid them. You are certainly free to charge $10,000, just as you are free not to offer insulin for sale at all. But in either case, you will be forgoing a profit opportunity if you do, so why would you?
You write, "This article makes me ashamed to be a SOLOist."
Really?! Then what in Galt's name are you doing on here? This is an Objectivist list. Steven's article was perfectly consistent both with the Objectivist ethics and the economics of laissez-faire capitalism.
- Bill
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