Unethical to skirt hypothetical case of economic fraud?

[Please forgive the possible absurdity of the following question. I believe it’s analogous to a current business practice and, rather than debate that, I want to analyze the reduced form.]

If a seller has a unique or semi-unique product and makes the would-be buyer sign a contract that in exchange for the product the seller can price-gouge (i.e., charge exorbitant profit rates over costs) and the buyer will forgo otherwise available remedies that would prevent the price-gouging, is it unethical for the buyer to sign the contract knowing that he will avail himself of the legal remedies to only pay a fair price (i.e., the seller’s normal profit in a competitive market)? Is all fair in price wars? Or is this a simple case of immoral economic fraud against a dishonest seller? Does the answer change if the product, while not being an absolute necessity for survival, would be a necessity for, say, emotional well-being?

For the sake of analysis, assume that in any lawsuit the seller might file against the buyer the seller would be unable to prove any damages under the rules of the jurisdiction. The only question here is the morality of the buyer’s decision to fight economic fire with economic fire. If you think that the buyer is being immoral, please indicate how serious you think the sin would be.

You are right- absurd. In no jurisdiction I know, can a person contract out of consumer laws.If the buyer understands that such conditions of the contract that excludes such remedies are void ab initio, then he is working within the law and is acting ethically. The seller is certainly stupid working within a constrained capitalistic environment if he attempts to exhort unfair prices imposing conditions that are excluded by the very jurisdiction in which he is selling.

This seems to be more of a legal than an ethical question. But if the buyer thinks that it would be a sin, perhaps he should avoid it without first consulting a priest skilled in this area of economic fraud.

While not the example I am attempting to wrestle with in the original post, another comes to mind to show that this is not so absurd as you may suggest. The music industry says no copying their music in the sales contract, but my state, and I believe many others, expressly allows this activity as long as it is for archival purposes. Does the buyer who buys music with the intent to make a backup copy, thus violating the contract, commit sin by intending to defraud the seller’s terms when the state will not penalize the activity? My take is that you would say no this is not a sin, but again, this merely shows how my original hypo is not so absurd.

It’s also slightly analogous to getting a driver’s license when you know you will be speeding at least 1 mph above the speed limit from time to time.

Whether the seller is stupid is not quite the question I’m looking for (I agree though).

Obviously, if the State Copyright laws allow for copying for specific reasons, eg archival retention, then this would over-ride common law contracts or even contracts formed under corporation statutes and thus buying within the intent of Statute law is quite moral.
However knowing you are going to break the law against speeding does not intrude on your ability to obtain a license to drive, which is a skill-based license, not one contingent on maintaining the road rules but on knowing them in the first place., albeit contravention of those rules may incur a loss of such licence, more as a penalty, rather than a judgement of competency.
Breaking the road rules with reckless disregard to the public safety is always immoral. Unintentional straying slightly above the speed limit is obviously void of moral guilt as there is no intention. But it may be a breach of the law nevertheless.
The legality and morality of an act are not always the same. Thus the destruction of the private instruments of an abortionist in the prevention of an imminent abortion may well be moral to many. Moral but against the law. A law against feeding the hungry as found in one American city recently, may be considered immoral to some.

It seems that you are assuming a court would set a “fair price”. If the product is unique or nearly so, the market will set the price, based on demand/supply and uniqueness, and that price will remain until either there is more competition bringing the price down, andother product replaces it, or it is no longer deemed viable.

It seems you are conflating price setting on a unique product (with an overlarge profit, however you are figuring what is overlarge) with price fixing among competitors.

Courts are not in the business of determining fair value and how that compares with fair compensation.

As a lawyer myself, I have some court awareness. I asked you to assume court behavior as I described above, not that you could lecture me on the legal aspect, but so you could focus on the moral aspect of my question. If you can answer the question, I would appreciate it.

there is no such thing as ‘price gouging’, so the question is null.

Whatever you want to call the pricing considerations when one might be otherwise subject to anti-trust laws (had they been applicable) is fine by me. Price gouging is my term, but I am not an economist so feel free to suggest another if that would be more coherent. If your argument is that anti-trust laws are immoral as counterproductive to capitalism, I think that would be a fascinating debate, but please start another thread.

It sounds like you’re trying to juggle two topics at once. Let’s start with one first.

Short answer on the price war question: No.

Long answer: Because really, when you’re reduced to price warring at least one of you is going to eventually end up playing with fewer pieces on their side of the game. As the saying goes, “You get what you pay for.” Of course, you can argue that value can be too subjective at times (or else there wouldn’t be such a thing as a negotiating table). Still, you shouldn’t rule out the possibility that the other guys just have really better stuff and your only real answer is to innovate or die.

Okay, now let’s move on to how this can relate to music piracy. Under certain conditions (e.g. different laws, different states, different countries even) pirates can be considered another form of competition. Call it criminal, call it insidious, but the fact is they’re threatening to eat your market share as much as any other legit competitor (assuming you even have anyone else besides yourself who wants to swim among sharks as it were).

The good news though is that we can go back to the saying, “You get what you pay for.” The stuff that pirates and bootleggers put out always have quality and warranty issues. This is something I think everyone should really be aware of. Pirated/downloaded music can seem cheap but it carries risks like viruses (if it’s torrented via the internet), sub-par quality, and now many companies are implementing stronger anti-piracy/hacker technology. (Ironically, they do it because they’ve managed to buy out the same geniuses who would’ve helped the 4chan geeks otherwise.)

Now if you, as the buyer, feel like you’re going to be cheated out because you think authentic merchandise is far more expensive, that’s really the nature of the beast.

Again: “You get what you pay for.”

I’m not sure how this can be applied to moral theology but when it comes buying/selling, this particular saying already covers a lot that needs to be said. It’s your responsibility to be a smart consumer and gauge the risks of seemingly good deals. Perhaps the real moral of the story is to not just buy on a whim. Think about the risks and judge for yourself if they don’t pose a risk to your own well-being.

Lost Wanderer, beyond your “short answer”, you lost me. Call me dense, but I’m not seeing the application to my original questions. Can you please tie in your example a bit more?

Okay, let me try again: Being a buyer is a responsibility. You should know, to the best of your ability, what you’re spending your money on and whatever ethical/moral baggage that carries could be your responsibility too. If you think a business is engaging in price wars, it’s going to be their problem and not really any of your business. What you should focus on is whether you’re getting your money’s worth.

If you think you’d rather pay more and get more, that’s actually your power over business that is offering cheap, low-quality alternatives (as in the case of pirated music). It’s the same in reverse. If you think you can deal with the risks of acquiring music from suspect sources, the one selling the higher-end goods can’t really stop you (directly at least). They have to take the fight to the criminal competitor. They’re fighting over your money but not against it.

Hopefully, that’s better.

Up to here, though I’m not quite clear where you’re going, I reluctantly tend to agree.

I don’t see how that follows your previous statements. Maybe this is a new paragraph?

I’m not sure you’re really answering my original question. What the heck does this have to do with the signing of a contract that you know in advance you will not keep, even when the other party unfairly manipulates the system?

What’s the same? I can’t figure out your antecedent.

Unlike in my example, the music industry certainly can go after you. It would likely just be economically unfeasible for them to do so. In my hypo, I specifically stated that the unfair seller would lose in court. Here, if the music industry wanted to go after buyers of pirated content, they would win if they could prove their case. So the example seems inapposite. But again, I’m more focused on the contract signing portion.

That’s my point. You think you’re being manipulated. You feel you’ve done enough homework to say that you’re getting the short end of the deal. So what do you do? Do you give them your money or to their competitor?

I repeat: You are not what they’re trying to hurt. You are their means of hurting their competition. However, that gives you power over them. They’re not the only ones who can manipulate the system. You as a buyer/consumer are as much a force in an economy as the producers.

You get the final say whether you’d rather spend money on authentic albums or think pirates are a better source of content. Either way, whatever risks you’re taking is your own (be it moral, ethical, physical etc). It’s not on their part. Their consequence is losing money because you’d rather deny them their revenue by favoring the other party. Your respective consequences are completely separate at this point.

No, they’re not. They’re going after pirates. You’re just the customer of the pirates because you get their stuff from them. I repeat: You are not their enemy. You are a possible source of revenue that pirates are denying because the latter just happens to have a lot of good hackers.

You talk of contract signing but really, it’s still sounds like a transaction, an exchange of goods. You though are the ones who has the final say. Every time you download something from a torrent site or a similar source is incentive for companies to oppose the pirates not the people the pirates cater to.

Again, I feel this is inapposite to my hypo, but rather than argue that, I posted another thread with the real-world example I had in mind. Perhaps you’d like a crack at that.

Since by your definition of the product there is no “fair market”, that point is irrelevant. One seller, unique product; the buyer has no other choices. As stated, nothing is accounted for in terms of initial research and development, costs of production, number of buyers, and need for seller to stay in business (potential lawsuits to protect patents, etc. as well as ongoing staff, and etc.). Unique products normally cost more than non-unique products because the latter normally have a fairly well laid out production process. Unique products start from scratch, and within their pricing normally is a risk factor of failure to produce a marketable product. Additionally not said is life of product sales; if it is a product which is likely to be replaced relatively soon by another unique product, that also will be factored into price.

At that point, I don’t see that the clause is even necessary; but buyer morality? The buyer (at least so far in this scenario) always has several options: dont’ buy; buy something lese that is not as unique (and presumably not as good); buy because they wouldn’t have a case anyway.

This isn’t a price war; as set up, there is no competition, or minimal. To have a price war, there has to be serious competition. I don’t see any fraud, unless it is being posited that sellers are only morally allowed a certain % of profit over cost of production. And that normally comes from an extremely narrow view of what it costs to bring a product to market.

As set up, I don’t think the buyer has a case. Morality? Not all stupidity is immoral; much of it has no moral weight.

Perhaps there are factors not listed; Buyer can think they are being gouged, but emotional reactions to cost are not a moral matter. Buyer in (what appears to them to be justified) anger may think to themselves they will sue the seller.

Sorry, not trying to be rude, but the case as stated doesn’t seem to have a moral dimension to it; it is an economic matter, and as stated, the buyer will not succeed - if for no other reason than that it is a unique product so there is no competition, and no means of setting a “fair price”.

Fair is pretty much what the market will bear for unique products. Both seller and buyer have a balancing test; cost too much and you don’t sell. Cost too little and you don’t stay in business because of the impending bankruptcy. Charge too much and you limit the number of buyers willing to pay the cost.

Perhaps there have been rules or cases which limit the amount a seller of a unique product can charge; I am not aware of them; but basic economics seem to say the buyer is a dreamer if they think a court will impose a sanction on the case as stated. But I don’t see a moral component to dreaming.

I would simply say that according to your scenario, anti-trust laws are irrelevant. Single seller with unique product.

Please see the other thread (forums.catholic.com/showpost.php?p=12632251&postcount=1) for the real-life example regarding skip-city ticketing. The product is semi-unique, i.e. having near exclusive air access to some major airline hub. This would seem to go to the very heart of anti-trust laws. None of your other concerns are relevant either since the seller is charging a premium for a lesser included service (flight from A to B) than its larger service flight from A to C that has a layover in B). By any definition you can think of, it costs them less, but yet they charge more since there is competition at the more expansive service (sometimes), but not the lesser included. Also, you contend the buyer won’t succeed; yet as I stated in my hypo, buyers do, as they do in real life quite often, and the chiseling seller has no pragmatic legal recourse (and even impractical ones are dubious). Only the moral-worrying Christian has a possible conundrum here regarding whether to enter a limiting contract or not with that seller.

So, instead of arguing with my contentions here and elsewhere, can you please refocus your comments, if any, to the morality of the situation of either my hypo, my real life example from the other thread, or both. Can one morally sign a contract promising to allow himself to be cheated without recourse when he intends to do so?

I now have read your other thread. I don’t see a moral issue. Sounds like a class action should be started.

Thank you. My gut tells me that it is not a moral problem, as I don’t think it constitutes lying or fraud either, but hair-splitting may be involved. But I’ll elaborate at some point in the other thread perhaps.

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