Alonzo Fyfe

A friend of mine reported a dispute recently with somebody who argued.

The dispute concerned the principles for determining a fair or just wages -- using Walmart as an example.

I thought I would post an element of that debate here.


One of the problems with pure market solutions to price problems is illustrated in the following:

Smith goes into the desert, and brings with him a tanker filled with water. Hundreds of miles away from any other person, or any other source of water, he builds a house, plants a garden, and lives a happy life of isolation.

One day, an airplane crashes in the nearby desert. The survivors drag themselves over to this man's property. They beg for water, in order to survive. The owner of the house says, "I will sell it to you, if you will sign over to me everything that you own and agree to work for me as a slave until your dying day."

Now, according to a strict property-rights theory, this water belongs to this man, and he has a right to sell it for whatever price he can get. Nobody may legitimately use for or fraud to against him as a means of getting him to transfer his property to those who are less fortunate. The only legitimate means of transaction is the market, and the buyers have a choice to either meet his price or do without.

My objection to this way of thinking is that it depends on an absolutist conception of rights -- that rights are written into the very fabric of nature and humans are obligated to conform their behavior to this system of rights and duties even against the most extreme costs.

Absolutist theories of rights are ontological nonsense. Such "rights" are as real as God, angels, and ghosts (that is to say, not at all). I hold that it is no coincidence that those who subscribe to such an absolutist theory of rights also tend to add to this that their values come from God and, as such, are inviolable.

I subscribe to a desire-based theory of value -- that all value relates ultimately to desires. The "rights" that exist are those that, when enforced, better fulfill human desires. Under normal circumstances, a "right" of private property fulfills this criterion. But this "right" should never be considered absolute -- extending into situations like the hypothetical situation above.

One could say of these survivors, "none of them would sign over everything they own for this man's water unless they are willing to accept...". However, the real question is: Does this fact make it morally acceptable for Smith to make such a demand? If the surviving passengers were to band together and force Smith to hand over the water at a lower price (but one which leaves Smith no worse off than if the plane had not crashed) are they evil? Have they done anything wrong?

The absolutist theory says they are wrong. The desire-based theory says that Smith has a duty to provide, and the passengers have a right to take, the water for a "fair price" -- where "fair price" is determined by a price that leaves Smith no better off and, indeed, rewards Smith for the fact that these passengers would have been dead if not for the water Smith provided.

Now, reasonable people can disagree on what this "fair price" is. We have two clearly unacceptable extremes. At one end, Smith charges his exorbitant price for the water. At the other, the passengers take all of the water for themselves and leave Smith with none. Between black and white is a large field of different shades of gray -- and no precise guidelines for saying that "the line should go here."

Now, with respect to Walmart, it may be true that the average wage drops when Walmart comes to town. However, it is also the case that the average price of goods also drops. Let us say that you were given a magical button. If you push it, average wages drop by 3%, but the average price for goods and services drops by 10%? Nobody is doing the poor people in a community any advantage by telling them, "We will allow you to keep your 3% higher salary, but you must also pay 10% more for everything you buy."

Part of Walmart's business practice is to go to companies such as 3M and Johnson and Johnson and say, "We will only carry your products in our store if you drop your price." It then passes those savings onto its customers.

The goods that Walmart carries are precisely those goods that poor and middle-class people most demand. Rich people barely see any benefit from Walmart's pricing practices. And, yet, they feel the pinch when the companies they own (and the stock they own in those companies) suffer a reduction in earnings as a result of Walmart's demands for lower prices.

Now, all of the figures in this discussion are made-up. I have no idea how the reduction in salaries compares to the reduction in the average price for goods and services. As a result, I am not making any final judgments as to whether Walmart's practices provide a net benefit to the community. Nor should I, because the question I was asked was not whether Walmart provided a net benefit, but about the principles to be used in evaluating Walmart's practices. Absolutist theories of rights provide a very poor set of principles for evaluating the business practices of a company such as Walmart. Desire-based theories give us a much stronger set of principles -- even though it still obligates us to dig up and examine all of the relevant facts before reaching a final judgment.

Vesica

May I suggest a third means/logic for determining fair price? Economics. Classical, Neoclassical...whatever.

By the theories of Classical Economics a 'fair price' would need to allow the seller to make a living/earn a profit but it must also be low enough the consumers (at large) can and will buy. This dynamic is different between every buyer and seller so in the case of the stranded folks, some will agree and some will not. This would be true if the man charged any amount for the water. Some would object to paying a few dollars 'because of the principal of the thing.'

As for Wal-Mart, in the end Wal-Mart's lower wage/lower price practices are not benefical to the community. Or rather they would be if Wal-Mart provided everything the residents would ever need. However the lower wage gives them less purchasing power at the car dealer, the dentist, etc. As for the companies Wal-Mart buys from, they actually benefit from the relationship (in general). Yes they are forced to sell thier products for lower prices....but in exchange for mass scale distribution. Production cost per item gets lower and lower the larger volume you are dealing in. In the end the companies still profit.

Glory

I am confused. Are you asking me to determine what policy is best for the community? Or are you asking me if I find it acceptable to take advantage of those with fewer options.

I say that because the idea that walmart is helping the poor by carrying the things they buy most is very flawed. Why do they buy those products most? Because they are the cheapest products on the market. Were other products cheaper, people would buy them, many with no regard to quality. The poor are stuck with what they can afford. Wal mart does not look for the products that will do people the most good. They look for products that people have no choice but to buy and then negotiate the lowest possible price while paying the poor the lowest possible wage. They could sell healthier food in their cafe, but french fries and hotdogs are cheaper. So, the poor get fatter while geting malnourished at the same time and Wal Mart pats themselves on the back for providing cheap food. I don't buy their altruism in the slightest.

Now, about our man selling the water. Why would his right to his personal property override those people's rights to life, liberty and the pursuit of happiness? If he refuses to provide water to those people and they die, he is guilty of depraved indifference to human life. In order to squirm out of that, the man would have to prove that giving up the water would have been detrimental to his existence. Since it did not occurr to him to ask that the water be replaced or payed for once the passengers got back to civilisation, he has no case. He would be guilty of second degree murder. His rights are not at issue.

Market values are detrmined by many factors. One of those factors is wether or not the public can survive without a given product or commodity. Anyone who claims that a man's right to charge whatever he wants for his stuff regardless of the effect his practices have on the community is a monster. Any man who claims that he has the right to pay his employees less than they can live on is equally montrous. Of course the problem is determining what a living wage is. My notions of a living wage is, I am guessing, very different from that of the powers that be at Walmart. I, for instance, think that a living wage includes enough money to save for retirement.

Glory

Vesica

Anyone who claims that a man's right to charge whatever he wants for his stuff regardless of the effect his practices have on the community is a monster.

Of course, monsterous. Or they are *gasp* an economist. If the community (in the Walmart) situation is being harmed it is the communities' problem to make it a poor economic choice for the 'monster' to remain in business. Either that or run off to get laws passed since almost all economic activity is regulated.

Any man who claims that he has the right to pay his employees less than they can live on is equally montrous.

I hope you do not read history much....I think it would really upset you. Economic laws have nothing to do with morality, nor should they. Economics as a science is not trying to feed the world or find work for all. It is trying to understand the patterns at work behind economic cycles so that food can be produced in surplus for hard times and new job oppertunities can be encouraged to emerge where they are most needed.

ImGod

From what I've seen, Walmart's idea of retirement is making you a greeter.

pug846

Glory said:

Why wouldn’t it? Please explain.

He wouldn’t be guilty of murder except under circumstances that aren’t present here. His property rights are at issue. Although, since the contract was signed under duress, it wouldn’t be enforceable anyway.

Do you believe we should attempt to save everyone’s life if it is within our means and as long as it isn’t in determent to our own life? Should the government force us to do this? Should we be held morally responsible if we can save someone’s life without risking our own, yet don’t?

It's always easy to demonize people you disagree with.

[ November 18, 2002: Message edited by: pug846 ]

[ November 18, 2002: Message edited by: pug846 ]</p>

Glory

You are unfamilliar with the concept that power lies in the hands and pockets of very few individuals who use the community at large to make themselves richer?

Do you really think that laws in this country protect the masses? Have you looked at that whole Enron thing? The rich get laws passed through bribery and the masses lose their retirement funds in accounting schemes that no one with a seven figure income can remember much about. Ken Lay gets laws passed. The community argues about wether or not a small business should be allowed to operate in a residential neighborhood.

I think it is unnecessary to be patronising. Is it your intention to debate and converse or do you just feel like being a jerk? If the latter, I have better things to do with my time.

Then why are you going on about economics in a forum about morality? The question was about morality not policy or economics. How is this relevant to determining the morality of enslaving people for water?

Glory

[ November 18, 2002: Message edited by: Glory ]</p>

Glory

Property is transferable and replaceable. Life isn't.



Letting someone die when one possesses the means to prevent that death is a kind of murder. When the means of prevention is a glass of water which is readily available, that constitutes depraved indifference to human life. In the scenario described, the whole thing hinges on the fact that everyone involved knows that the passengers are going to die if they don't get water. Hence, the duress that you mentioned.



No. Those parameters are to broad. One is not morally obligated to try to save the life of another if, for instance, the attempt would involve risking one's life or risking serious injury. I would, for instance again, risk breaking a nail but would probably not risk severing a leg. Also, I don't see how one should be obligated to spend their own money to save strangers' lives. There are a million things one is not obligated to do even when life is on the line. The scenario described above, though, is clear. The man is not risking anything but inconvenience by sharing his water. He is morally obligated to help the passengers.

[quote] Should the government force us to do this? Should we be held morally responsible if we can save someone’s life without risking our own, yet don’t?

See above.

The government already holds us to certain, very liberal, standards of behaviour regarding people in trouble. I don't feel qualified to write legislation. A badly written law often does more harm than none. I feel that people should be strongly encouraged to help those in crisis. No one wants another Kitty Gonovese.



Who else would I demonise?

Sometimes one must be willing to call a spade a spade. If you are cold blooded enough to let people die so that you can satisfy your greed, you are ... well, you know.

Glory

[ November 18, 2002: Message edited by: Glory ]</p>

Vesica

From the original post:
"The dispute concerned the principles for determining a fair or just wages -- using Walmart as an example."
AND
"I have no idea how the reduction in salaries compares to the reduction in the average price for goods and services. As a result, I am not making any final judgments as to whether Walmart's practices provide a net benefit to the community."

I was answering these issues. While not a system intertwined with morality, economics provides a conceptual theory for dealing with issues like this. Economics does not focus on what should be but what is and likely to be based on western economic history.

I am aware but within the framework I was using, Economics, it is assumed that the market can actually regulate itself for the good of the people. Current history might argue against this....

Apologies for being patronizing and rude....I will simplify my argument down to its base. I feel that economics is an appropriote and useful tool for examining the problem stated in the opening post and that the opening post can be dealt with outside of morality debates. I of course do not expect anyone or everyone to agree with this. But to move on and debate (not argue or insult):

1) Does or Can an individual have absolute soveriegnty over a possession or property?
2) Does an indivudal have a right to use said poss/prop as he/she wishes?
3) Should/Must an individual make all decisions about said poss/prop with the fate of society in mind?

Personally I answer, Yes sometimes, Yes within reason, No generally not.

In the case of the water, I think the guy can sell it if he wants!

Glory

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I definately belive that it does. In order for the market to function for the good of the people, it seems to me that the playing field must start out equal for all players. That has never been the case in the history of western civilization. Money and power are much easier to hang on to then to get hold of in the first place. Right now, the markets in the US are subject to manipulation by the wealthy elite. The wealthy elite are not interested in sharing power. They are after nothing less than world domination and theirs is not a benevolent monarchy. I believe that we have, in the Oval Office, right now, proof that absolute power does coyrrpt absolutely.

Thankyou.

</strong>

Thankyou again. I am catagorically not an economist.

I think selling it to those that can afford it is reasonable. I think his price is another matter.

I don't believe that one must always act in a way which benefits the community. I do believe that acting in such a way as to damage the community is wrong. If one is in a position to take advantage of others, I think one must consider the consequences of doing so. One of those consequences is that it becomes justifiable for someone to do same to you should they get the opprtunity.

What if one of those passengers has a gun? Would he be justified in killing or threatening to kill the man for the water? If not, what is the difference between what the man is doing and what the passenger is doing? Either way, someone is going to die and someone is going to get the water.

I still do not see an argument supporting the notion that property rights outweigh the rights to life and liberty. If they do, what kind of society would we have?

Glory