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August 19, 2008

Comments

Bill

Well, as a toy collector, here's the concrete example that jumped out at me as soon as I read this post: In my neck of the woods you can go to ANY Target or Wal-Mart or Toys'R'Us at the exact time that they open and you will see at least one person waiting to get in that you can tell is "the dealer". As soon as the doors open, he makes a beeline for the toy aisle (usually straight to the Hot Wheels). If any new or "hot" toys have been stocked, he'll buy them all. He knows what's coming out. He knows what's valuable. He knows what to look for. And he won't leave anything for anyone else.

He will then turn around and sell those toys on e-bay, or at the toy shows, for whatever mark-up he can get.

The problem for the rest of us who only collect a few things and have no interest in reselling is that we no longer have much hope of just going to the store and finding that one thing we want. If it's special, they'll be gone and we're left to buy it on the dealers terms.

Now I'm not at all convinced that this situation violates "normal market conditions", but I'd be interested in other peoples opinions 'cause it sure sticks in my craw.

Mick

I would think the passage in the CCC is referring to a situation where someone is deliberately jacking up prices and further increasing the hardship of another.

For example, if a traveller in the desert was thirsty and came across someone who was willing to sell the person a bottle of water, but for $5000. The bottle of water may be of little worth to the seller, but he is exploiting the buyer's need and charging an unjust price.

If a person wants to buy a dvd, for example, he or she understands that it is available at any number of locations. A dvd is a luxury item, not a basic need. I think you could post it on ebay for $10,000, if you wanted to, especially if it was a particularly rare item. You are placing an item on the open market, and the market will bear out whether that was a fair price.

Obviously, exploiting someone in need or someone mentally handicapped or someone completely ignorant of the market value of an item is sinful, but what this person is asking is whether it is sinful to be, in essence, a merchant. In addition, selling alcohol as a bartender to someone obviously intoxicated could be sinful as well, as you are taking advantage of their impaired judgement.

Ken

I think the caveat about ignorance also applies in the case of the seller knowing something about the item that the buyer couldn't know. For example, take the Stradivarius at the garage sale. The seller had it appraised, and found out that it's fake, but is concealing that fact and has priced it at $50,000 (i.e., as if it was a genuine Strad). A buyer comes along and thinks it's a great deal, and buys it on the assumption that it is a genuine Strad. That would seem, under the "ignorance" clause of the CCC, to be immoral.

Chris

From this post, we can learn that Jimmy listens to Atlanta radio talker Neal Boortz, as this hotel room scenario is the exact example Boortz discusses on-air whenever there's a hurricane and people flee the coastlines, and then the MSM inanely begins talking about gouging.

You could apply the same example to gas stations when there's a coming natural disaster. If gas stations were forced to keep their prices level, you would potentially have people showing up not only to top off their tanks, but also to fill up large numbers of gas cans as they over-prepare to run their generators, chain-saws, whatever. The result? The gas station runs out of gas and people drive by it running on fumes, hoping to make it to the next station (which is also already sold out for the same reason.) Instead, the gas station raises their prices so that people will buy less - will buy only what they need to evacuate them from the coast, thus it takes longer to sell the same amount of gas, and more individuals can have their need met. Of course there's a point beyond which if the price is raised, the public will drive by that station and look for a cheaper one...thus ultimately the market bears out what is a fair price (notwithstanding the fact that gas has been at record high prices this year - please pay attention to the fact that I am really only talking here about the economics of raising prices when demand is high such as in a coming natural disaster so that a scarce resource will be available to more individuals.)

Tim J.

"From this post, we can learn that Jimmy listens to Atlanta radio talker Neal Boortz"

Or maybe Boortz listens to Jimmy Akin. Or maybe it's just a common illustration that has floated around.

Paul H

"From this post, we can learn that Jimmy listens to Atlanta radio talker Neal Boortz"

Or maybe Boortz listens to Jimmy Akin. Or maybe it's just a common illustration that has floated around.

Or my guess is that they have both read Basic Economics by Thomas Sowell. I know that Jimmy has mentioned reading that book. Sowell may not use this exact hotel example, but he presents many similar examples of situations where scarce resources can best be allocated by letting the free market determine the price.

Bill Tingley

Jimmy does a fine job of illustrating the problems of applying the E-Bay scold's interpretation of CCC 2409 to the real world. We need to keep in mind that what CCC 2409 condemns are MALICIOUS transactions. Absent malice, the mere fact that a seller is selling at a higher price than others would to a buyer doesn't make the transaction morally illicit.

Furthermore, transactions are two-way streets. I wonder if the E-Bay scold gave thought to how the same principles to be applied to sellers must also apply to buyers. For example, by his reckoning, the seller must let the buyer know that his wares sell for less elsewhere. But then the buyer must also let the seller know that others sell the same goods for more elsewhere. After all, buyers can exploit sellers too.

When it comes down to it, CCC 2409 isn't that difficult to apply to our lives if we let commonsense and common decency rule. I agree with Jimmy that a theology of economics would be wonderful thing for the Church to provide us, but I think if we just avoid trying to skin each other in the marketplace, we'll be in good stead with CCC 2409.

Regards,
Bill Tingley

David B.

I really would like to know if that "hoard and sell high" thing that Bill mentioned is wrong. When a bunch of private sellers stock up a $12 item from Amazon, sell it for $130, and continue to buy out the market, something smells funny.

Leo

CCC2409 must mean something substantive, its import cannot be whittled away to near-nothingness by a permissive analysis.

The point to note is that the Church does not accept that the market or property rights trump all other considerations.

In real-life hotel-hurricane examples are the owners increasing prices to achieve a fairer distribution or simply profiteering?

In the hurricane example a Catholic hotel owner could try to achieve a fair distribution by restricting the number of rooms which could be rented by one household. No casuistic self-deception is needed to justify profiteering. Shops sometimes restrict special offers to "one purchase per person" in non-emergency scenarios.

Mary
Now I'm not at all convinced that this situation violates "normal market conditions", but I'd be interested in other peoples opinions 'cause it sure sticks in my craw.
Note that your knowledge does you no good at all.

What this dealer is doing is creating an artificial monopoly.

Have you tried asking the toy store if they can special order items for you?

Bill

Mary,

The stores can't/won't special order for you. In fairness to the "dealers", the big stores are frequently able to undercut small comic stores that might carry some of this stuff, sometimes actually preventing small stores from getting shipments they (the small stores) have ordered in good faith. I suppose the dealers could see themselves in the role of the hotelier: that they're insuring fairer availability to interested consumers. I don't know.

I do think it's a microcosm for what may happen as the internet (Amazon, etc.) continues to change the very nature of retail sales.

maiki

but bill, if the big stores were in the role of the hotel people, they would notice the increase demand-- that the cars are selling out,--and raise prices. Making it less profitable for a dealer to buy out the stock since there is greater risk if the cars do not sell. Alternatively, big stores could carry more hot wheels, again, making it harder for a dealer to buy them out, since it is a great risk to have more product that one can move. Why they are not doing so is uncertain.

But the flip side, is to see if from the point of view of the dealer: there is this commodity in short supply that people are willing to pay more for for his effort. of camping out at the store, and doing research. So he does it. If people were not wiling to buy these rare toys from him on ebay, he would stop doing it. But since people are willing to pay more for the tiny cars, the market is bearing this increase in prices just fine. Consumers who do not want to pay the dealers prices can boycott him, until he lowers prices or ceases to monopolize tiny cars.

Bill

I feel silly even talking about this but as I said before, I think it may have larger implications for other types of retail.

maiki,

A point about the big stores: it's not that they're selling out of Hot Wheels, it's that they're selling out of, say, 10 different types of Hot Wheels that may come in a case of 200. A Toys'R'Us manager can't call up Mattel and say 'please send more of these 10', he can only order a whole new case. If he does that just to restock the 10 rare ones, he'll be sitting on extra inventory of all the rest.

So the dilemma, as I think it applies to the discussion is this: On the one hand the dealer is just obeying the laws of the market, providing a "service" and making a profit that people are willing to bear; on the other hand, he's providing a service that's unnecessary (hoarding the toys) because the demand stays the same regardless.

To use the hotel analogy again (without the hurricane aspect since HotWheels are nonessential) : Toys'R'Us would be the hotelier, the dealer would be a guy who bought out the best rooms for whatever price the hotel was asking and then sold them on the street at a mark up. I suppose it's like a ticket scalper.

ps - I'd love to hear from the 'reader' that started this to see how close we are to what he was talking about.

TerryC

The point of the CCC concerns NEEDS. Toy cars are not needs. No one needs to buy toy cars. The most egregious example of the ebay mark up are Christmas toys, especially electronic items like the XBox which are often in short supply when they are introduced. Not cheap to begin with, twits go on ebay and pay four to ten times their store price just so they can have it now. The same conveys to hard to get concert tickets.
None of this stuff is a need.
My wife sees a similar situation as a habitual garage sale shopper. Dealers get to the sales early and buy a lot, and then resell at flea markets and antique stores. One egregious case was a sale at a local Bed and Breakfast. The day before the sale a group of dealers saw the advertisement for the sale the next day in the paper. This place is also a restaurant and so they went to tea the day before the sale and casually sought out the owner to ask what she was selling the next day, then offered to buy it all. Good deal for her, after all she might not sell everything at a garage sale, and she would have to spend all day out in the hot sun doing it. She wins, the dealers win, but all of the people who wake up early on the day of the sale and rush over to the place expecting a sale are losers.
None of this concerns needs, so is it covered by the CCC? I don't know, but something about it just feels wrong to me. Maybe I just think a moral seller would have told the dealers to comeback the next day. Possibly more work for her, but then the easy thing is often not the right thing to do.

labrialumn

In Lutheran teaching, all of our talents and relationships are callings from God. the purpose of these callings is to glorify God and serve our neighbor. Therefore the example of the individuals who purchase available stock in sales in order to resell at a higher price are in violation of their calling. They are not seeking their neighbors' good (Luther's commentary on the 10 commandments). True, making a living is important also, but in such situations where there is no value added, or where the value added is significantly less than what is being charged for that added value, sin against God and ones' neighbor is involved.

David B.

I guess it just comes down to decency: do you charge all you legally can, or do you mark up items within reason? The reader strikes me as falling within the latter.

Unfortunately, many people fall into the former camp. It doesn't bother me as a buyer, because I don't buy these toys. But it does bother me that a few folks exploit the whims of children.

Bill

I wouldn't worry too much about the children, David. It's mostly the big kids like me that are inconvenienced.

labrialumn,

" ...but in such situations where there is no value added, or where the value added is significantly less than what is being charged for that added value,..."

Well put. I think that sums up what I was thinking.

David B.

I wouldn't worry too much about the children, David. It's mostly the big kids like me that are inconvenienced.

Well, I guess I should have added 'and others' to the last sentence, just to be fair. :-)

The Masked Chicken

Let's break up the paragraph from the CCC cited by the original poster:

"2409 Even if it does not contradict the provisions of civil law, any form of unjustly taking and keeping the property of others is against the seventh commandment: thus...forcing up prices by taking advantage of the ignorance or hardship of another.191

Clearly, it seems to me, this paragraph refers to those types of activities of forcing up prices that are tantamount to stealing. Does the word, "forcing" as a human activity in this context, always imply stealing? Since to steal is to take something from someone that they have a right to, it would seem that forcing up a price is only stealing when it impinges on the rights of someone to own something. What does right of ownership entail? It would seem to me that if one could assert the statement:

if I had known such and so about what I owned before I sold it (either a condition of the object or a fair market value), I would not have sold it,

then one has a claim under ignorance. Likewise, if one could make the assertion:

if I had any other way to obtain item X than selling it for this price, which I cannot really afford, I would have

then one has a claim against hardship.

I may be (probably am) wrong in my simple analysis. This paragraph would mean that people like pawn brokers might be in dangerous waters if they prey upon those in need by paying them too little because of hardship or ignorance (the negative case).

The Chicken

Eric

Well, I humbly believe that it does not matter which candidate wins. Both parties are brought and paid for by the globalists. We don't have a candidate that represents the people of America anyone. The two party system is a sham and I will not be voting this year. And I'm not into the whole "vote for the lessor of evils" nonsense.

Martin

My wife sees a similar situation as a habitual garage sale shopper. Dealers get to the sales early and buy a lot, and then resell at flea markets and antique stores. One egregious case was a sale at a local Bed and Breakfast. The day before the sale a group of dealers saw the advertisement for the sale the next day in the paper. This place is also a restaurant and so they went to tea the day before the sale and casually sought out the owner to ask what she was selling the next day, then offered to buy it all. Good deal for her, after all she might not sell everything at a garage sale, and she would have to spend all day out in the hot sun doing it. She wins, the dealers win, but all of the people who wake up early on the day of the sale and rush over to the place expecting a sale are losers.

In this case the seller lied. She placed an ad saying she would have items for sale but, at the time of the sale, she didn't. To be honest she would have to wait until the announced opening, then she would be free to sell it all in one lot. Overall though, if a buyer is willing to make such a deal you've probably underpriced you item

CT

As JA seems to briefly acknowledge implicitly in a way that is perhaps not apparent, there are other ways to manage the scarcity such that consumers of the scarce resource when the resource becomes more scarce take appropriate measures that effects its societal conservation or efficient distribution. One method is to use some kind of rationing scheme where the number or kind of room made available is limited based on various factors.

Someone mentioned a book by TS; I am not familiar with it but much of economics is theory in need of empirical verification. For example, Milton Friedman's Permanent Income Hypothesis is something that would need empirical verification. Natural Rate of Unemployment was a theory that has since been revised/criticized on the basis of empirical data.

There is some interesting work that has been done that criticizes the use of GDP as a measure of true economic health or growth. Some links for those interested (including a nice chart)

http://www.nytimes.com/imagepages/2005/10/03/science/20051004_HAPP_GRAPHIC.html
http://www.nytimes.com/2005/10/04/science/04happ.html

Unfortunately none of this is taken into account in technical economic concepts like "social efficiency"

Susan Peterson

My husband buys old 78 records at yard sales, thrift stores, auctions, and from individuals, and then resells them on Ebay. He has had to make me shut up when I blabbed in a friendly way that he was going to resell them. I have learned not to do it.

On the other hand, when he bought a box of records for $20 from a charitable agency (nongovernmental) and resold the contents for over $500, he gave $100 of his profit to the agency. He had the knowledge to know he could find sellers, and also had the work of describing the records, not as easy as your think as they must be related for appearance and sound, in some cases photographing them, then packing them safely (they are very brittle) and shipping them. So he deserved a profit. But he felt he ought to give something back.

There is nothing wrong as a general principle with buying low and selling higher, but of course there are those humane exceptions mentioned above.
Susan Peterson

Interlocutor

The catechism seems to be a blueprint for anarchy.

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