Important Note
Posted by
tgirsch
If you think predatory pricing and/or price gouging are bad, then you’re a dirty communist. Just thought you might like to know.
When you stop businesses from taking advantage of people and/or ripping them off, you’re destroying the American Way, comrade!
Yes, because there’s absolutely nothing communistic about redistribution of wealth using the force of law to apply arbitrary standards in contradictions to the individual choices of the very people you’re claiming to ‘protect’, using power not defined in the actual statutes itself.
They’re obviously such idiots that the government needs to watch over their shoulder paternally to protect them from making purely voluntary decisions.
By the way, “price gouging” is a legal term, defined under Indiana statute as only potentially occuring during or twenty-four hours before (and have only been found constitutional under emergencies, recognized as part of the police power). It’s a civil crime, possibly punishable by 1,000 USD per transaction, making such an accusation potentially libelous unless you like to call “reasonable persons” idiots incapable of figuring out what their local law is. “Predatory pricing” is the sale of goods at a highly discounted rates to drive competitors out of the market, and is rather obviously not the case here. It’s another crime under the various anti-trust, one that was rather obviously not at hand here, and one that has not had a successful conviction within the last seventy-odd years. But, hey, it’s not like playing loose with definitions has been a traditionally poor choice when proclaiming your viewpoint.
I think the stations at hand should refund the price difference — I’d expect them to be boycotted otherwise — but I doubt there needs to be a law against it, this particular action hints of completely unnecessary and potentially unlawful governmental action, and the only reasonable understanding of the law which would allow the sort of claims made by yourself and the described “victims’ would allow nearly any arbitrary definition of unacceptable prices to result in people being beaten around the head by the law. Moreover, it brings us back to the basic assumption that people were apparently so stupid that they couldn’t manage to look past a whole three gas stations in an entire state that they need the state government to protect them from the ever-dangerous gas store owner.
Anyway, Tam’s post on the matter was significantly better written, no offense to SayUncle.
Comment 3/20/2008
Yes, because if my choices are “Stop here and buy gas at an exorbitant price,” or “run out of gas,” then paying the gouge price for gas is a totally voluntary decision, no different than any other. “The market decided I should walk home.” Then again, I suppose it’s possible that the possibility of a small town with few or no competing gas stations never occurred to you…
And I know that price gouging and predatory pricing are different concepts, but nutjob libertarians generally defend both using precisely the same sort of logic, so I figured I’d kill two birds with one stone.
Finally, I always forget the fact that even though states have every right to regulate commerce within their borders, libertarians unconditionally consider this to be a very bad idea in all but the most basic of circumstances.
Comment 3/20/2008
Same as drinking the overpriced brown crap Starbucks spews out if you don’t drop by a reasonable coffee place instead. Last I checked, cars were required by law to have a gas gauge. None of these people should have been surprised and amazed to discover that they had to buy gas at station X, Y, or Z, if any of them were actually in such a situation.
It’s never as simple as ‘buy gas at an exorbitant price’ or ‘run out of gas’ in a situation with a whole three gas stations being ‘evil’.
I’m quite familiar with such a thing. Dansville, Indiana, however, is not such a small town, and a quick search on indygasprices.com reveals that there are — amazingly — other choices, including a Citgo (speaking of irritating socialists, I’d rather pay the 70 cents) and a Kroger. We’re talking Indiana here, not BF Egypt, Nowhere, North Dakota.
Neither of which occurred here under their statutory definitions and which are often opposed by nutjob economics majors from different viewpoints (price gouging like price caps can result in shortages by reducing the incentive to move supplies in an area of an emergency, predatory pricing laws are rather impressively vague and provide incentives against negotiating low prices).
Okay, Mr. tgirsch. You seem a fairly intelligent and well-read individual. Explain to me : have you never heard of the Comity clause in the Constutution, Chicago, Burlington & Quincy Railway Co. v. Chicago (a court case which almost certainly began the ride of incorporation), and countless other cases. Or do you just assume I’m too stupid to know them?
Anyone with a reasonable education should know that states do not have every right to regulate commerce within their borders. Amazingly, some of those limits include — tadah — the incorporation of the “takings clause”, which means that even states wanting to confiscate any money must do so within lawful eminent domain grounds or while recognizing an individual’s right to due process. The former requires people to be compensated for the value taken away, while the latter actually requires that the taking occur within statute. As I’ve pointed out already, Indiana’s state code does not recognize this particular event as price gouging, no matter how much you accuse them of the crime.
Woops.
Too bad I’m not a libertarian, nor am I basing such a belief off of libertarian (or even conservative) principles : just the rather obvious revelation that perhaps having state Attorney Generals threaten people with force of the law even when the statute does not cover this particular act alone might be a bad idea, especially when it’s done under the nebulous claim that it must protect the citizens from their own legal decisions.
Comment 3/20/2008
IANAL, so I have no idea whether this particular instance meets the statuatory definition of price gouging. That said, however, the argument didn’t seem to be that this specific case failed to meet the standard of price gouging, but that laws against price gouging were in and of themselves akin to communism. Did you interpret the argument differently?
Comment 3/20/2008
IANAL, either — my focus is on IT — but the statute is both remarkably clear, and the only one which defines price gouging, and it specifically states that the governor has to declare an emergency before it can apply.
The post by SayUncle that you linked to only stated that a normal market experience occurred and then “Communism ensues.” Given that the specific event involved threat under color of law that would not pass constitutional or even basic legal muster in order to pressure an individual who owned the property or goods for sale (a traditional mark of the ‘bourgeois’, especially when that individual is also purchasing labor power) to redistribute their property to the ‘less fortunate’, I think that was a fairly safe statement, albeit a bit on the side of hyperbole. It’s also a statement that must reference the actual event, since people don’t say a thing ‘ensues’ from a purely wide-scale theoretical viewpoint unless you have a very poor grasp of conjugation.
Mrs. Tam’s post could probably be interpreted as either/both a statement about both the actual event and/or price gouging complaints in general. That said, you didn’t link directly to her, and your criticisms were rather irrelevant as neither she nor anyone in the comment threads (as of 11:58 EST) bring up the phrase “price gouging”, the criticized events were not price gouging by statute, and even the finking form and phone number are not a matter of reported price gouging but a matter of reporting ‘excessive’ prices.
Again, while it might be hyperbole, it’s still not an impressively questionable statement to call an attempt to define ‘excessive’ prices (and thus effectively define prices to a fairly small range).
I personally expect both Tam and SayUncle would oppose most “price gouging” laws, especially since the definition of price gouging that you’re pushing has already been found to be fairly unconstitutional (and for countless other reasons), but that’s not particularly an evident point of conversation from your initial post or #2.
Would it be illogical to call those types of “price gouging” laws communistic? I dunno. The concept of government-defined acceptable prices has been rather defining attributes of both socialism and communism, but so has mass slaughter, corruption, concrete housing, and 5 year plans that don’t work. Correlation does not necessarily mean causation.
That said, it sounds like something out of Directive 10-289 (specifically point seven), and when you sound like an Ayn Rand villain — a type often criticized for being unrealistic — you know you’re heading to that particular dark side pretty fast.
Comment 3/20/2008
I actually did click through to Tam’s post, so that was mostly what I was addressing. I could have been more clear about that, though. As to where the term “price gouging” got introduced, have a look at Uncle’s title.
Would it be illogical to call those types of “price gouging” laws communistic?
Unless you (or they) can demonstrate how it inevitably leads to the workers owning and controlling everything, and a complete lack of private property, then yeah, I’m going to say it’s illogical.
Finally, I’ve never read Ayn Rand — I’m already a big enough asshole without that particular feather in my cap.
Comment 3/21/2008
Oh, and I’m like 99% sure that Tam is not a “Mrs.” anything.
Comment 3/21/2008
[…] And Tom continues: If you think predatory pricing and/or price gouging are bad, then youre a dirty communist. Just thought you might like to know. […]
Pingback 3/21/2008
I was getting all ready to spew some vitriol about Gattsuru’s ironic castigation of TG for “poor definitions” and then using terms like “choice” and “voluntary” in a manner that relate to their actual meaning in only the most existential way. Funny how, you link to Marx there, Gatt, isn’t the “free market” as it is applied as an egregious misappropriation of the actual meaning of the words as there is?…
But, instead I’ll end it there and just comment about how funny/awesome/disturbing I find it that there’s an internet abbreviation for “I am not a lawyer.” I’d never actually seen it before, but I figured it out immediately. I don’t know if it’s the mere existence that I find funny, or that as an acronymn, as opposed to just an abbreviation, it would be pronounced “I Anal.”
Comment 3/21/2008
Technically speaking, Marx didn’t necessarily require the workers to own and control everything, merely control the means of production and a limited amount of merchant action. The whole ‘revolution’ thing he pushed tend to result more toward the own everything side, but that’s not what he defined during his writing. Moreover, most people wouldn’t require act A to result in complete and total domination of mentality Z before describing act A as having attributes of mentality Z. It’s a bit Big Brotherish for modern England to have something on the order of 4 million surveillance cameras and genetic samples taken from ‘potentially criminal’ individuals, even though that doesn’t mean that the people in power are specifically focusing on a future consisting of a boot stepping on a human face forever.
But, yes, generally taking the traditional assumptions — that the proletariat outnumber the bourgeois, price gouging is apparently defined only as ‘high’ prices rather than by any existing statute — you can pretty easily see that sort of action result in a situation where the ‘working’ (and non-working) class takes control of most sales. Even if they don’t specifically own the production itself, having the ability to completely define prices is a pretty big step toward controlling the actual company.
I can’t say it inevitably leads to a completely communistic society. Laws can be rather easily changed, the People’s Commissar of Acceptable Prices could suffer amnesia, and particularly stupid Attorney Generals tossed out of office. That’s easy enough. As it is, businesses could still actually leave the area when the laws against price gouging get too ridiculous, as well as simply not selling goods, for now, and I’m not familiar with any laws that would stop them. Of course, there weren’t any laws stopping them from selling gas at that price…
But either way, that doesn’t stop it from being a rather major step down that particular road.
I’d advise trying it sometime. She’s such a remarkably heavy-handed writer that it’ll seem like a bad parody of the traditional political straw men to you. Funny, in a “kill three hundred men, women, and children, but say it’s okay because they were socialist” sort of way.
Horrible hyperbole and ridiculous characterizations, but you know that if you’re picking leaves from a Rand villain’s book, you’ve got problems.
Comment 3/21/2008
What I don’t understand from the actual news story is that one station claimed they screwed up and mean to raise the diesel price and then another station said they raised their prices ‘because of the competition’
That’s bullshit, no one RAISES prices because of competition. If all of your competitors are selling at significantly higher prices than you, guess who will get more business? It definitely seems like something weird was going on here.
If I was in a situation of buy this gas or (truly) run out of gas in that area I’d buy a gallon and move on in search of a cheaper station. If people were whining and shocked at the price then that means they have some idea of what gas prices were and that these places were too high. (Show someone from 1997 gas for $2.00 and they’d be shocked, but I’d be happy to pay that.) They should have gone in search of cheaper gas, instead they just chose to rip themselves off and bitch about it.
The stations may have been doing something shady, and perhaps that should be investigated as monopoly behavior, and they should be charged. The stations also voluntarily decided to give refunds after being threatened with legal action. They certainly could have fought it; but nothing about this whole situation is communist, IMO.
Comment 3/21/2008
Matt, I disagree with you. If I am in a market and my company and my three competitors all sell a similar product for $10 a unit and my three competitors raise their prices to $15 a unit, I am immediately going to raise my price to something like $14 a unit. I’ll still be the low price, but my margins will be increased.
When you say “monopoly behavior”, I think what you really mean is price collusion (aka price fixing).
Comment 3/21/2008
Matt and Ted:
Agreed. It looks to me like there may have been some collusion going on, and the station owners hid behind thin excuses. And whatever else you can say about it, there’s nothing “communist” about it, unless you’re the type that fears Commies around every corner (a type which is sadly still remarkably common).
Comment 3/21/2008
Economics 101 — it’s not always better to ‘get more business’. Group A can have a hundred times the sales of Group B, but if they’re making a penny per sale while Group B makes a dollar, Group A’s getting a hell of a lot more wear and tear, going to be more heavily taxed, and simply deal with more hassle than Group B.
That ignores the other, more perverse, incentives. Running out of gasoline can be an expected and major issue for these stations : if they sell all of it, they’re probably not getting replacements for six hours, meaning that the sales of food and drinks (the real profit area) will probably plummet, and that’s not a trivial concern.
Comment 3/21/2008
Yeah, I’m going to agree with Gattsuru, because it has to happen once in awhile, right. But, I’m also going to disagree.
I mean what you say, Gatt, is completely true. Louis Vitton doesn’t look at Old Navy and say, “Oh shit, we’re gonna get pushed outta the handbag market because we don’t have competitive price point.”
Of course, that is only applicable to the degree that we can argue Citgo is the Louis Vitton of gasoline. Actually, if I opened up a gas station, I think I’d advertise my product as the Louis Vitton of gas - people would show up just to see the sign, I think…
Ted’s reply makes the most sense here.
Comment 3/21/2008
Damn skippy.
Look, by my way of thinking it comes down to this:
You’re having a garage sale, Mr. Tgirsch. Who gets to be the ultimate arbiter of the price you can ask for your Star Wars action figures: You? Or your neighbors? Or the state AG?
Who gets to set the asking price of your stuff?
Comment 3/22/2008
Gee, I see a few problems here.
A) central control of prices is typically a feature of communist economic systems and is a short road to a huge, hairy mess, as prices as set and accepted in the market are a major channel of communication between producers and consumers. Chop that wire and you get…problems. I do not expect any economics student anywhere to grasp this notion; it’s too simple and it’s not Marxian enough.
B) Y’all do not understand Hoosier idiom or how gas prices work; these little outfits, they generally sell gas on consignment, trying to sell off each tankload they receive for what their next refill will cost, plus enough to cover expenses and (maybe) turn a profit. (Most of their profit is on the soda pop, smokes and geegaws). How do they set fuel prices? Quite often, they makle an educated guess. So “the Competition” (the gas station around the corner) suddenly jacks up prices, you may do the same, suspecting they know something you do not. Some hours later, you realize the stations owned by Various Big OilCos have not made any change, make a few calls and realize there’s a SNAFU afoot. …About then, the Atty. Gen’l rings in and you start stammerin’ about refunds….
Rollin’ up to the station on fumes is rare these days. I do it (I’m absent-minded) but if the gas seems too high, I’ll buy a gallon and move on. The prices are clearly posted; if you don’t like ‘em, move on. This is not a rocket seance. The only “sign” needed is that big one that sez eleventy-two-ninety-eight a gallon. If you don’t bother to read it, you are an idiot and I see no reason to block evolution by bailing you out.
Comment 3/22/2008
Once again, what I’m taking issue with isn’t whether or not consumer protections were a good idea or appropriate in this particular case. Rather, I’m saying that whether or not you agree with it, it ain’t communism. Stupid, maybe, maybe not. Without knowing more of the particulars of the case, I really can’t say.
But in general, protecting consumers from being ripped off isn’t communism. (And just because someone is a willing participant in a transaction doesn’t mean they didn’t get ripped off.)
Comment 3/22/2008
Roberta X:
Rollin’ up to the station on fumes is rare these days.
Well, rare for you maybe, but for some of us… *blushes*
Also, I reserve the right to steal the phrase “rocket séance.”
Comment 3/22/2008
I believe the actual phrase is “rock it! seance”
Comment 3/22/2008
I doubt even many libertarians would have issues with protections from being ripped off. If the gasoline was, for example, really sugar water or toxic sludge, I doubt we’d be crying much if the local courts sided in favor of the victims.
But we’re not talking about that, we’re talking about legal limits on maximum (and if you want to prevent ‘predatory pricing’, minimum) prices, according to what a third-party individual considers “just”.
Yeah, that’s not typical behavior for centrally planned economies that espoused communism or
Comment 3/22/2008