Which is worse: Greed or Envy?

GreeneyesLast October’s Hurricane Sandy brought was has come to be known as “price gouging” back in the news. The usual citizen cry-babies reported price increases to the state government for items like gasoline, cabs, hotel rooms, electrical generators and other necessities.

Naturally, the politician who doesn’t drool over the chance to grandstand on this issue hasn’t been born. New Jersey governor Chris Christie was no exception: “We will not hesitate to impose the strictest penalties on profiteers who, in direct violation of our consumer protection laws, seek to capitalize on the misfortune of others in the midst of a crisis and recovery period,”

Price-gouging laws make it a crime for a merchant to raise the price of needed goods or services during shortages caused by emergency conditions. Everybody seems to love these laws.

Take the example of a city paralyzed by a monster ice storm. If I can make it to the corner hardware store—hoping to buy some ice melt—I will most likely discover an empty pallet and a sign announcing “Ice Melt $4.” Sold out. I only need one bag and would gladly pay $10 for it, but that cannot happen. If it did, the store owner would be ex-posed to criminal liability for price gouging.

Anti-price gouging laws do nothing to ensure that we can buy essential goods when we need them most. On the contrary, such price controls guarantee that we will not have enough of what we need. We could re-christen these anti-price gouging statutes as “Let’s-run-out-of-everything-as-fast-as-we-can-when-we-need-it-most” laws. These laws seem to have no purpose except: 1) to soothe the feelings of angry citizens who feel that a greedy merchant has taken advantage of them; and 2) to provide a prosecutor or attor-ney general a platform from which he can pose as champion of the consumer.

If a disaster strikes, and water, gasoline and food can-not be sold for significantly higher prices, stores sales will be brisk as everyone buys more than they need. Then—as in the case of the ice melt—none will be left to buy at any price. In addition, it is unlikely anyone will rush to ship in essential supplies when the government has removed the profit incentive.

In his book The Church and the Market, Thomas Woods gives the example of a hotel manager who raises his room prices during an emergency. The high price may cause a family to rent one room instead of two, or cause two poorer families to double up. If such “price gouging” were allowed, the hotel could provide shelter for many additional people in an emergency. True enough, the hotel owner gets the payoff, but should that be a crime when it was his self-interest that put everybody under a roof?

Greed—the excessive desire for riches—is a sin, but who but the greedy man himself is harmed by it? A greedy person may become wealthy simply by serving his customers well, perhaps by having plenty of ice melt available after a storm. Unless the greedy merchant cheats or steals, however, he harms no one but himself.

Worse than a seller’s greed is the consumer envy that motivates anti-price gouging laws. While greed certainly harms the greedy, envy is worse. It is envy that does no one any good. Three of the ten commandments forbid envy. St. John Chrysostom taught that “envy arms us against one another.” The book of Wisdom declares, “through the devil’s envy death entered the world.”

Envy harms not only the envious, but when put into action, it harms the person who is envied. Envy never housed anyone, never fed anyone, never filled a gas tank. Anti-price gouging laws seem to spring from envy and hatred. How else to explain someone who would rather have no gas at $4 a gallon, than have all the gas they want at $6?

The repeal of price gouging laws would do more than help keep essential goods available during emergencies. A free market would also decrease the severity of shortages when they did occur. If merchants knew they could raise prices during shortages, more would take risks and stock up on the ice melt and snow shovels. With no prospect of a payoff, merchants play it safe and stock just what they are sure they can sell in a typical winter. If consumers knew prices could rise greatly during emergencies, many would be better prepared, further decreasing the demand in times of shortage.

If you wish to report price gouging to the authorities, click here.

2 thoughts on “Which is worse: Greed or Envy?

  1. Brian Dunbar

    “Greed—the excessive desire for riches—is a sin, but who but the greedy man himself is harmed by it? ”

    I believe you are jumping the gun a bit there, assuming that the seller who raises prices is greedy.

    1. The cost of doing business is going to go up in an emergency. Your corner hardware store might have to fire up a generator to keep the lights and heat on. He’s got to pay his people to shovel the walks, put salt out, pay for the guy to come in and plow out his parking lot. Extra coffee and donuts to compensate the clerks coming in during an ice storm. And so on.

    2. It is not greed to want to be compensated at a fair market price. If the market price goes up … well that’s fair compensation for being awake and selling ice melt when any rational person would rather be at home, slurping coffee and watching the ice storm through one’s window.

    1. Ed Bonnyman

      In reply to Brian Dunbar:
      “Who but the greedy man is harmed by it?” answer: everyone who is swindled by the man, or in whom the mans greed has inspired envy (“I want his money/power”), anger (“I hate the greedy bastard”), greed (“I wish I had tons of money too to the exclusion of wishing good things”), self-righteous and/or judgemental pride (“he is evil, I am so great because I am not like him”) or anything else bad.

      1. Correct.

      2. Depending on how the reader defines “fair”, their understanding of what you wrote could be something that is WRONG. Greed is a motivation more than it is an action. It is the love of money that eclipses or negates love for that which should actually be loved.

      It can be greed to want to sell something for the market price, or even for less than the market price, and it can be fair to only want to sell it for more than the market price. It depends on the price, what you paid for it (be it money or labor or risk or whatever), the person you are selling it to (how much money they have and how much they need it, weighed agaisnt how much you have and how much you need the item and/or the money from selling it), and how much you need the thing or the money that selling it at whatever price could get you.
      If everyone is making extortionate profits to enrich themselves, they are being greedy, even that price has now become the ‘market price’, and you are being greedy if you do the same. Here is a scenario: if everyone is selling bottles of water that they bought for 25 cents each to thirsty people for $20 for massive profits, $20 is the market price, but you’re a greedy asshole if you bought it for cheap and sell it to poor thirsty people for that. If you sell it to a speculator for $20, you’re being greedy because the poor guy that has to pay that much to buy it from the speculator just to stay alive is going to get ripped off. Maybe the bottled water bubble will burst, and maybe not. That is irrelevant because you are propagating the lie that bottles of water should cost $20 and contributing to propping up the price at $20 when you should be selling it for much less. If you’re selling it to Bill Gates because he is thirsty, and $20 is the market price, that may be fine if it helps take care of your actual needs if they are not already met. Otherwise you are being greedy and ripping him off. Bill has plenty of money and that is the market value, and now you can buy more water to sell to people who need it or give it to your enployees, or whatever. Selling it to Mr. Gates for $30 in that case would be greedy, but not as bad as to a poor person, to whom maybe you should freely give the item anyway.

      On the other hand, if everyone is underselling you, but your need for what is being sold is greater than your need for the money you would get at the market price, you are not greedy for selling the item for more than the market value.

      All of this is, of course, presuming that you know the aforementioned things about your customer. If you don’t, you have an obligation to sell it at a reasonable price, because odds are that the person buying your product isn’t a thirsty rich man.

      I understand that this is not how the American system of capitalism is often seen, but it is in fact truth. Just because you can do something doesn’t mean that you should, and we have a system that allows people the freedom to make that choice. It was said that our system can only work if we have a moral people. If our people can temper their baser desires, if it is possible (ie. if there is enough to go around, and usually there is) the system we put in place can do an excellent job of efficiently providing for everyone while at the same time allowing them to pursue whatever dreams they have. But again, this only works if most people act mostly morally, (and I would add, think for themselves so that the minority that don’t act morally don’t screw over the rest of us too badly) otherwise it is just another form of injustice.


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