Alot of new opportunities have opened up for products/services after Sept 11. Some are enduring chg’s created by a watershed event, not simply short term panic-based demand. IMO, there are things which clearly are profiteering, but many things which im not sure if they are or not.
Profiteering is:
- Price gouging because of fear or lack of supply.
But what about these cases?
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Creating a mail checking service that screens for anthrax/other biological agents/mail bombs.
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Becoming a Cipro distributor but not charging anymore than pre-Sep11 prices.
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Starting a security company that consulted to companies/instituitions/people that were likely candidates for terrorist attacks.
The problem with calling the examples above profiteering is that they offer a legitmate service at fair prices. If such things were called profiteering (and we lived in an ideal moral world) then there would be a huge vacuum of products/services when things changed because of an unfortunate disaster. BTW, some may consider the Cipro example as profiteering if they thought the demand was fear based and the fear was not commensurate with the actual threat. But peace of mind is a valuable service too. Anyway what’s your opinion.
Just thought of this. Should something be called profiteering if the motivation was for money (even if the prices were fair) vs. a motivation to help but with the same profit margin?
I’d guess the profiteering line is crossed when the customer has no reasonable alternative except to accept the service regardless of the cost. In the examples you gave, competition would prevent any of the people you described from becoming profiteers. Even if they felt compelled to buy what was being offered, customers would at least have a choice of whom to buy from and this would keep prices within “reason”.
An example that I would consider profiteering would be if the manufacturer of Cipro (who presumedly holds a patent) decided to raise prices a hundredfold.
First, responding to a need in the market isn’t profiteering, it’s just good business sense. Making false claims to instill fear in consumers is one thing, but supplying a legitimate service that people want to use isn’t wrong by any stretch of the imagination.
Second, where is the line drawn on price “gouging” due to short supply? After all, if the supply is lowered and the demand remains the same, simple economics says that the price will go up. To me, that’s not gouging, that’s just charging what the market perceives the item to be worth. If a willing buyer will pay the price, why should you charge less?
Just been watching a feature on UK television about the Great Fire of London. When the re-building plans were discussed a plan was put forward to build a new canal from the Thames into the heart of the City. This would have generated a great amout of money for King Charles 2nd. The king was so outraged that he would be seen making a profit out of the disaster that he imprisoned the man who had suggested the scheme and the plan was scrapped.Let that be a lesson to those who would profit from the present disaster.