3 ms·

As I understood it, the question was not whether it's ethical to "charge for it", it was whether it was ethical to charge big bucks, ie. make a killing profit.

As I understood it, the question was not whether it's ethical to "charge for it", it was whether it was ethical to charge big bucks, ie. make a killing profit. If you had a filter that can purify water, and you could get away selling it for huge margins, like 500%, just because they need it and they'll sacrifice other things in order to buy it, would you? I, for one, don't think that would be moral. A heathy profit to sustain your business would be OK.

_delirium 15y ago
I do agree that large profit margins mean something is wrong, though I'm not sure the blame should necessarily fall on the person making the profit. It's the kind of situation where one should ask: why are profit margins high, especially if persistently high? Classic economic theory would predict that large profit margins shouldn't persist for more than a short time, because competitors will enter the market, whether the initial company wants them to or not. So then a question would be what's keeping the market uncompetitive. Sometimes it might be the fault of the entrepreneur in question, especially if he/she has government connections: there are situations where a company is maintaining large profit margins serving the poor because their potential competitors keep running into licensing roadblocks. Other times it's something to do with patents, or network effects, or who knows what else.
- dextorious 15y ago
  """I do agree that large profit margins mean something is wrong, though I'm not sure the blame should necessarily fall on the person making the profit.""" Well, if that person is you, though, then you have the morality question to answer, not the market. It doesn't matter, morality wise, if the profit happens because the market is inefficient or for some other reason. An easy example would be, because you have a patent for the thing you sell, so no one else can get into the market while it holds. That's essentially what big pharma does (they justify it with the "we fund future research" line, which I call BS. If you can save more people now, do it, instead of invoking vague future benefits. Else, even when that future drugs are available, you'll just screw the people of the future needing them, with the exact same argument about more future research).
  - _delirium 15y ago
    Yeah, I agree there are situations where if it's you making the decisions, you should ask questions like that. I'm mostly interested in the structural causes, though, because I think encouraging people to have more ethics in business tends to be like whack-a-mole, if you don't also tackle the structural reasons that it's even possible for someone to extract persistent large profits from a situation.

_delirium 15y ago

I do agree that large profit margins mean something is wrong, though I'm not sure the blame should necessarily fall on the person making the profit. It's the kind of situation where one should ask: why are profit margins high, especially if persistently high? Classic economic theory would predict that large profit margins shouldn't persist for more than a short time, because competitors will enter the market, whether the initial company wants them to or not. So then a question would be what's keeping the market uncompetitive. Sometimes it might be the fault of the entrepreneur in question, especially if he/she has government connections: there are situations where a company is maintaining large profit margins serving the poor because their potential competitors keep running into licensing roadblocks. Other times it's something to do with patents, or network effects, or who knows what else.

dextorious 15y ago
"""I do agree that large profit margins mean something is wrong, though I'm not sure the blame should necessarily fall on the person making the profit.""" Well, if that person is you, though, then you have the morality question to answer, not the market. It doesn't matter, morality wise, if the profit happens because the market is inefficient or for some other reason. An easy example would be, because you have a patent for the thing you sell, so no one else can get into the market while it holds. That's essentially what big pharma does (they justify it with the "we fund future research" line, which I call BS. If you can save more people now, do it, instead of invoking vague future benefits. Else, even when that future drugs are available, you'll just screw the people of the future needing them, with the exact same argument about more future research).
- _delirium 15y ago
  Yeah, I agree there are situations where if it's you making the decisions, you should ask questions like that. I'm mostly interested in the structural causes, though, because I think encouraging people to have more ethics in business tends to be like whack-a-mole, if you don't also tackle the structural reasons that it's even possible for someone to extract persistent large profits from a situation.