If I bill high prices for goods&services that bear no relation tothe costs of producing them,am I gouging you?

Answer 1

In any free exchange, both parties benefit. If I value your goods or services more than the money I have in my pocket, then I give that money freely in exchange for the goods or services, but only if you are willing to accept my money freely. And if you do accept it freely, then you must value my money more than the goods you possess or the time it takes you to perform the service. Therefore, in a free marketplace, there is no such thing as gouging. It is called free exchange, and both parties gain something of greater value to them.

Look at it another way: if you are trying to buy something and you hold out for a lower price, are you gouging the seller? No, you are just holding out for a better price. That's all a seller is doing: holding out for a better price.

Also, in a free market, you won't get to bill high prices for long before you are outbid by your competitor, because your customers are also holding out for a better price.

Answer 2

Absolutely not! The price of goods and services is a function of the supply for those goods and services and the demand for those goods and services. It has nothing to do with the cost of production. Turn it around, if you produce a good that cost you $10 to produce, do you think anyone would care about your costs if the demand for that item was such that people were only willing to pay $5 for it? When you produce something that is in high demand and you do it in a way that adds so much value that others can not compete with you at your price, then you deserve high margins on the sale.

Read "Price Theory: An Intermediate Text" by David D. Friedman
which is available on line for free:
http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC.html

--Eric



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Answer 3

Only if I'm Democrat. Otherwise, I'd much prefer the option to pay a high price for something I want or need over the alternative of having nothing to buy, but being able to pay a low price for it.

Brad Pitt and George Clooney would be in trouble if their movie fees were based on their costs, wouldn't they? Perhaps we should force them to provide us entertainment for a low price. After all, it doesn't cost them much to get to the set, doesn't Brad drive a Prius? Do you think they'd do it? I can't recall the last time I've heard someone accuse Brad or George of price gouging.

Answer 4

If the value of the goods and services exceeds your price, then it is fair. For example, if I can show a car manufacturer how to save $200 per car, and I ask for $1,000,000 to show them how, the savings of $200,000,000 or more per year would more than off-set any cost for my service, even if I only had to spend 20 minutes figuring out how to save the $200.

And by the same token, if one auto maker finds a way to save $200 per car - and the other auto makers don't - he isn't gouging if he adds $200 extra profit instead of dropping his price.

Answer 5

The cost of producing specific products or services has nothing to do with prices to the public, and economy has nothing to do with justice.

Answer 6

Not only will you lose potential customers and loose your reputation, but you will brand your self in this world and in the unseen worlds as a thief. Remember that every action --known or unknown has an equal and opposite reaction--known or unknown.
Boaz.

Answer 7

The key to making a profit successfully over time is to make a "fair" profit. Charging too much will, eventually, cause your demise!

Answer 8

Of course. But if it's what the market will bear, then that's capitalism, baby.

Answer 9

you are stealing - and stealing has a price -

when it works through all the deals in society, it causes concentration of wealth, which is overpay, which causes tyranny, and causes poverty, which is underpay

and these two grow endlessly

no justice, no peace

justice is the nonnegotiable price of peace

let us use the term total costs to stand for all costs, including fairpay for the owners of the company - fairpay being proper and fair, full recompense for sacrifice of time and energy

then price above total cost is by definition money for nothing - a unilateral transfer of wealth [value, product of work] from worker [creator of wealth, of goods and services] to nonearner

it is of course the easiest thing in the world for a company to charge $11 for something of which total costs are $10 - but this is clearly sleight of hand beggary - getting something for nothing

again, in a notforprofit company, everyone gets paid - so what are profits?

it results in the ceaseless automatic drift of wealth from earners [creators, workers] to nonworkers - someone works for nothing, and someone gets paid for nonwork

[which is unbiblical: do not pay people for not working]

this ceaselessly increasing injustice or theft is the cause of 99% of war and crime

after 1000s of years of ceaseless drift of wealth from workers to nonworkers, we have super hyper extreme injustice - pay from $1 to $1 billion for a fortnight's work - from a 1000th to a million times the average

if it wasnt for this automatic ceaseless injustice or theft, every family in the world working average hard would be getting all they earn [create wealth by work, by making], US$75,000 a year [world annual income US$75,000 billion, about 1 billion families]

justice is of course equal pay for equal work

justice is essential for happiness, because injustice in money causes all the conflict

[everyone knows this: what would happen if a govt took 90% of income permanently off 90% of people and gave it to 1%? everyone will readily say: big big trouble - and doing this would give an injustice factor of just 910, or 91000% - we have pay from $1 to $1 billion for equal work [100 hours, or one fortnight] - an injustice factor of 1,000,000,000 or 100,000,000,000%

we have super hyper extreme injustice, SO WE CAN BE SUPER HYPER EXTREMELY HAPPIER

somehow everyone has overlooked this greatest of all facts about the very sad and dangerous human condition

who for instance mentions that israeli average income is 20 times the average palestinian income? - [and if this is the average, then the extremes are of course far higher]

there is a high correlation between violence and inequality - middle east: low equality, high violence - scandinavia: high equality, low violence

what seems innocent and innocuous at the personal level ['a nice, tidy profit'] becomes a violent sea of inequality on the large scale after a long time

economics has completely failed to notice [as far as i am aware] the fact that inequality [injustice, theft] is built in to transaction itself -

even if everyone was trying to make total costs and price equal [just, nontheft, nonwar], it would be impossible: no one can measure exactly the amount of work in a thing - so the value of any two things exchanged is going to be x and x+y - so every transaction is a fair-exchange-no-robbery [x for x] plus an automatic, real, movement of wealth [value, work] from earner to nonearner

which, when multiplied by trillions of transactions over time, produces a bellshaped curve of injustice - a few winning often, many winning more often than not, many losing more often than not, a few losing often

and this curve stretches endlessly with every transaction

and this has never been observed, generally acknowledged and effectively countered in society

it has stayed outside the general consciousness

it can be easily countered by limiting fortunes to the most one person can earn [create by their work, US$2 million] and spreading overfortunes automatically, electronically, equally among everyone in the world [one account per person of course, everyone to open accounts]

and this MUST stop war - because everyone knows that injustice [govt taking 90% off 90%] will cause war, and nothing will stop the war caused by injustice except stopping the injustice [theft]

because money is a joker good, good for virtually everything, including all necessities, its loss is totally bad

besides the fact that everyone is trying to give as little and get as much, there are the many many wideopen legal ways that money shifts from earners to non-earners

the 'extractive' economy is 20 times the size of the creative economy - ie, moneyraking is 20 times moneymaking [by work]

all it takes to get people to see the vital need for a mechanism that effectively counters this automatic legal unjust ceaseless drift is to explain it - and if one tells only two people, so well that those two see the vital necessity of telling two, every adult in the world will learn it in just 31 times the time to tell two

and then there will be quickly made the necessary laws, with universal approval, and injustice and war will cease

and war is escalating soon to ww3 and frozen dead planet

so it would be a good thing indeed

and 99% would be better paid - everyone including housewives would be on US$15 an hour [divide world annual income by number of workhours] - so 99% will be very keen

and 100% will be much happier - no extinction, for a start, and no danger for the overpaid [tot serves, quot hostes - x people under him, x2 people against him]

but can we get our thinking engines, our common sense, ticking over, firing on all cylinders, in order to grasp this common sense, which everyone already knows?

it has not occurred to anyone, seemingly, that if you pay bill gates US$500,000 per working hour - which we have done for every hour he has worked - he gives society one hours work, and society gives him 50,000 hours' work - that others have to be partslaves, ie robbed, ie annoyed, ie violent

per capita income: US: $40,000, ME $2000 - both working equally hard - with extreme escalating expensive violence - instead of every worker in the world, including housewives, on $40,000 a year - and world peace - and no [or 100th] defense and police cost element in taxes

simple as: 100 kids, 1000 sweets, everyone grab from each other, result: endlessly escalating and costly war, no friendship, no peace, no time to eat sweets, no time to play, endless work for all financing the endless and escalating violence

100 kids, 1000 sweets, 10 each, play, friendship ['fraternity'], equality [justice] liberty [no superwealth/superpower=tyranny, fascism, corruption, evil]

it is obvious that without superwealth, there is no superpower, no tyranny - the founding fathers knew it, they passed laws to limit fortunes, to stop wealth concentrating - they knew that the republic was dead as soon as wealth concentrated

and yet limitation of fortunes to the just maximum is not in american consciousness - the fact that in 200 years america has gone from democracy, liberty, equality and fraternity to tyranny and fascism, plutocracy, rule by the few, slavery, wageslavery has hardly begun to penetrate

how much impartial dispassionate intelligence is there out there?

enough, or not enough?

for instance, has reading this galvanised you? - or left you with no impression? - are you now deeply committed to investigate this line of thinking further, confirm it, and spread it, or not?

our survival and our release from war and millions of offshoot problems and unnecessary suffering depends totally on how many people are alive enough to be galvanised to check this out - hoping like heck it checks out - or we are dead

if not you, no one - if not now, too late

can you fault the logic?

if you have questions, will you ask them, or just drop it, and thus drop the future of the human race?