The ethics of getting a good deal

[Davidius]

I've been reading Cicero's De Officiis and in the last book he discusses the relationship between morality and expedience. I don't mean to go into the subject in-depth here, but at one point Cicero gives examples of business deals to see whether they are fraudulent. I'd like to propose a similar one here and see what you think.

Say you visit a yard sale or are browsing a website like Ebay and find a great deal. In fact, the person selling this thing must be really generous or simply ignorant of its value. Should one offer the seller a price more equivalent to the product's value, or is it okay to buy something at a "steal" when the seller may not know what he has?

 

[Reformed Covenanter]

What an interesting question.

 

[Backwoods Presbyterian]

I think it would show more virtue not to knowingly swindle an ignorant person. Just as much you have to be careful on E-Bay when purchasing items that are obviously below value for any number of reasons, some of which are illegal, not just immoral.

 

[py3ak]

My brother once purchased some things at a junkyard for a cut-throat rate. On arriving back home he realized that inside the items he purchased were other items (which he also wanted), but which should have upped the value considerably. As I recall, he went back the next day and explained what had happened, but the junkyard didn't ask for any more money. But obviously he (or my mom!) took the view that you should make sure that the people giving you a good deal know that they are doing so.

 

[CDM]

I am sure it is not unethical to get a good deal. Of course, each situation warrants its own evaluation.

But, I believe informing the seller that what he has is more valuable than he is asking gives more glory to our Father in heaven.

 

[Herald]

I think it would show more virtue not to knowingly swindle an ignorant person. Just as much you have to be careful on E-Bay when purchasing items that are obviously below value for any number of reasons, some of which are illegal, not just immoral.

Benjamin gives a very good answer. Ebay is really the open market at work. I wouldn't be concerned about making too good of a deal in that venue. A garage or yard sale? Listen to your conscience and do what is right.

 

[Craig]

44"The kingdom of heaven is like treasure hidden in a field. When a man found it, he hid it again, and then in his joy went and sold all he had and bought that field.
45"Again, the kingdom of heaven is like a merchant looking for fine pearls.

I don't want to reduce a parable to merely understanding business ethics...but in the parable, it doesn't seem like the merchant felt the need to tell the owner "hey, there's an incredibly valuable pearl on the land...please be aware so you can charge me for the value of the pearl as well".

 

[smhbbag]

I think I'm going to go with the dissenting view on this one, though I'm not sure if I'm serious or as a devil's advocate.

In the yard sale example, I might operate from a simple principle: I have no moral obligation to do other people's research for them.

It is their item, and they can place it for sale for any price they wish, as that is the prerogative of any owner (unless they're in an actual business and Congress is still in session, in which case they can only charge what the almighty legislators think is reasonable, else it's "gouging." Business owners don't have property rights, but the yard-saler does).

There are facts of life, and the more we shield people from the consequences of poor action, the more it will breed. This is a small-scale version of a type of economic 'moral hazard.' The market will teach lessons that could prove very valuable, in ways that will not be forgotten. It might even be best to buy it at the deal price, and then inform the seller of its real value just before leaving with it. The seller will potentially be better off in the future, and more inclined to figure out what he's doing before he does it.

If you simply inform him of the actual value, and he has no felt loss from the encounter, he is far more likely to forget the moral of the story and continue to do himself harm in the future.

Also, a yard sale is inherently an admission by any seller that they do not particularly want to receive the market value of a product, but that they simply want to get rid of it very quickly and gain a little in the process. To buy at the "deal" price is fully in-line with the purpose of the sale itself.

 

[smhbbag]

I don't want to reduce a parable to merely understanding business ethics...but in the parable, it doesn't seem like the merchant felt the need to tell the owner "hey, there's an incredibly valuable pearl on the land...please be aware so you can charge me for the value of the pearl as well".

That is a good observation that got me thinking. I'm not sure if that parable can be taken that far in this respect, but another one seems directly applicable:

When the guy hires servants in the morning, mid-day, and evening to work for him and pays them all the same, he felt no need to tell the sellers of their labor, "Hey, just so you know, odds are your labor will fetch a much higher price (per unit of work) later today." No, he just made an agreement that was agreeable to them both, and the laborer's lack of knowledge (relative to the employer) is not moral deficiency in the employer.

 

[Kevin]

I think it would show more virtue not to knowingly swindle an ignorant person. Just as much you have to be careful on E-Bay when purchasing items that are obviously below value for any number of reasons, some of which are illegal, not just immoral.

Paying someone the price that they ask for an item is not a "swindle".

 

[TaylorOtwell]

In the hypothetical yard sale situation, I would say the buyer has a responsibility to inform the seller.

Question 141: What are the duties required in the eighth commandment?
Answer: The duties required in the eighth commandment are, truth, faithfulness, and justice in contracts and commerce between man and man; rendering to everyone his due; restitution of goods unlawfully detained from the right owners thereof; giving and lending freely, according to our abilities, and the necessities of others; moderation of our judgments, wills, and affections concerning worldly goods; a provident care and study to get, keep, use, and dispose these things which are necessary and convenient for the sustentation of our nature, and suitable to our condition; a lawful calling, and diligence in it; frugality; avoiding unnecessary lawsuits and suretyship, or other like engagements; and an endeavor, by all just and lawful means, to procure, preserve, and further the wealth and outward estate of others, as well as our own.

WLC 141

As we all know, the Lord taught us to do unto others what we would have them do unto us. I personally would want someone to tell me if I had a baseball card worth $10,000 priced at $1.50.

The eBay situation would be a little harder to tell, since the seller may have just set the price low anticipating the price to rise as buyers bid on it. So, I guess it would be a case of contacting the seller to make sure they know what they are doing.

Good post.

 

[py3ak]

All right, make it a little more complicated. There is a yard sale, and it is obvious that the condition of the family is one of desperately selling everything they own to meet some crushing financial burden. But, they have an original Monet sitting on a lawn chair with one broken arm --price tag $5.00. Do you tell them then?

 

[Davidius]

All right, make it a little more complicated. There is a yard sale, and it is obvious that the condition of the family is one of desperately selling everything they own to meet some crushing financial burden. But, they have an original Monet sitting on a lawn chair with one broken arm --price tag $5.00. Do you tell them then?

Hey! Are you allowed to change the terms on my thread?

Seriously, though. I hate the threads where the reasoning is guided by ridiculously unlikely circumstances. The situation is simple and probably not very uncommon: regular yard sale, regular folks, and a steal of a deal. I think that keeping the discussion there would actually be beneficial for the average person.

 

[TaylorOtwell]

All right, make it a little more complicated. There is a yard sale, and it is obvious that the condition of the family is one of desperately selling everything they own to meet some crushing financial burden. But, they have an original Monet sitting on a lawn chair with one broken arm --price tag $5.00. Do you tell them then?

I don't know if I am understanding this correctly, but I think you are asking should the buyer inform them even though they are charging way too much for the lawn chair...???

I say yes, the buyer should tell them. No matter what evil they may have committed, we cannot return evil for evil.

 

[py3ak]

Unless you are willing to call getting a good deal theft, though, I think you have to acknowledge different aspects that lay a claim on you. If a thrift store is selling something valuable for cheap, you know they didn't pay anything for it and no one is losing by you gaining. In the situation of a desperate antique-store owner, however, where it may not be a concern of strict justice, it is a concern of charity.

My provisional answer, as I watch how the thread unfolds, is that it is not unjust to get a good deal, because the person set the price and you paid them the price. But if you know that they are in hard circumstances, and selling something for way under value, the Golden Rule, the dictate of charity, would be to let them know about it. I've never thought much about applying the Golden Rule to corporations, though.

 

[py3ak]

Oh, P.S. Do you see my tagline? It means what you think it means.

 

[Backwoods Presbyterian]

I think it would show more virtue not to knowingly swindle an ignorant person. Just as much you have to be careful on E-Bay when purchasing items that are obviously below value for any number of reasons, some of which are illegal, not just immoral.

Paying someone the price that they ask for an item is not a "swindle".

I think it would be a swindle to knowingly purchase something that you know is worth a good bit more than the person is selling it for at the "yard sale". I would think you are at least under obligation to inform the person of the real price of an object. If they do not care then it would be fine to purchase at that price. But if a person is ignorant it would be unethical to take advantage of that ignorance for your own benefit.

 

[Kevin]

All right, make it a little more complicated. There is a yard sale, and it is obvious that the condition of the family is one of desperately selling everything they own to meet some crushing financial burden. But, they have an original Monet sitting on a lawn chair with one broken arm --price tag $5.00. Do you tell them then?

I don't know if I am understanding this correctly, but I think you are asking should the buyer inform them even though they are charging way too much for the lawn chair...???

I say yes, the buyer should tell them. No matter what evil they may have committed, we cannot return evil for evil.

"evil for evil" ??? Now you are just being silly.

True story.


My dear wife visits a yard sale. She sees a large (very large) assortment of Thomas & Brio train pieces in a box marked $10. She purchases said box. At the time that she pays for this item the owner of the aforamentioned item laments all the money that was spent buying these toys for kids who never used them.

My dw googles these items & finds that they are "worth" over $500 if sold on ebay. She then throws them in the train box with all of the other trains.

Fast forward to today; the toys have been well used by several kids & would no longer bring even 50 bucks on ebay.

Question. What were the items "worth"?

Some have theorised that these items are worth the "maximum price paid, by anyone, anywhere". This is silly.

Any item for sale is worth what the buyer & seller freely agree it is worth. Period. Full stop. End of sentence.

I would never have paid 500 bucks for toys that wear out. i would have paid $10, $20, $40, $50 but not $500! So the trains are not "worth" $500, to me! The fact that a (nonexistent) "buyer at $500" may exist is not a factor in this transaction.

A "potential future purchaser at a higher price" DOES NOT EXIST! You may find such a person, later, after advertising, after spending time & money, BUT at the time of the original transaction, the do not exist.

If I attend an auction & I buy $1000 worth of widgets , based on my belief that I will later find a buyer of these widgets at $1200, have I defrauded the final puchaser of widgets of $200?

Any one who sais "yes" to the previous question is a crank, on the same level as a person who believes that "cars can run on water, if only oil companies would let them!"

 

[Kevin]

I think it would show more virtue not to knowingly swindle an ignorant person. Just as much you have to be careful on E-Bay when purchasing items that are obviously below value for any number of reasons, some of which are illegal, not just immoral.

Paying someone the price that they ask for an item is not a "swindle".

I think it would be a swindle to knowingly purchase something that you know is worth a good bit more than the person is selling it for at the "yard sale". I would think you are at least under obligation to inform the person of the real price of an object. If they do not care then it would be fine to purchase at that price. But if a person is ignorant it would be unethical to take advantage of that ignorance for your own benefit.

"worth" is relative.

Do you really mean that you have an obligation to find the highest price offered for any item before you buy it?

To a starving man, a bag of rice is "worth" his house. Does this mean that you must pay 150k for a bag of rice?

 

[staythecourse]

Do unto others

If you were accidentally selling an extremely valuable Van Gogh for cheap and you met you on the other side of the table and the other you was privy to it's value, would you tell you and recommend a better price? You bet you (pun)! That would be love!

Now, I take Christ at his word in deals. "Give what ever they ask" I give them what they ask or say no. That's my rule. No, "10 for that you must be mad!" (LoB quote).

My conscience is 100% clear when I do that and the other guy (and here's the kicker) I believe has a clear conscious about its value when he set the price. I will not second guess his heart. But if it's outrageous and I would have a bad conscious, as in my above example, love takes a different form by my humbly explaining the worth of the item for his benefit (not mine except a clear conscious - invaluable).

 

[LadyFlynt]

It really depends upon the situation. And I don't say this lightly.

If we were dealing with a family in straights and they had a Monet marked at $5, most likely the Monet is a fake (you'd have to REALLY know what you were talking about and have it professionally examined to make that kind of claim) or it would be a kindness to ask or tell them about it before purchase.

What the "highest ebay value" is doesn't count. The sad thing about ebay is that it is a form of intentionally "upping" the value to amounts that the items truly are not worth. Everyone that goes yardsaling, sells it to someone else for a bit more, who sells it to another for a bit more than that, and so on and so forth (the Thomas trains being a prime example...ebay has created a hoard and then scalp for 10-50x's the amount market on certain items). I don't like ebay for a number of reasons, this is one of them. I refuse to participate in ebay.

In many cases it's a "one person's junk is another's treasure" and what doesn't sell will typically go into the trash, straight to a thriftstore charity, or back in storage for next year's neighbourhood yard sale.

And CULTURE. Yep, pulling the culture card on this one. I was raised military. Heavens, if you didn't try to barter for a lower price, you would insult the wife holding the yard sale. In the military, yard sales are a means of socialising, swapping goods, and survival LOL! Here in PA, I learned that I can insult the wife by asking them to lower prices. It depends on WHO you are asking (culturally). So, I'm more careful and less likely to barter like I did when I lived on and near a military base.

 

[Pergamum]

REAL SCENARIOS:

In a cross-cultural situation this happens all the time, especially in countries that do not have fixed prices:


Scenario 1 (happens all the time if I don't watch myself, and even when I do):

Me (Mr. Whitey) comes and the locals jack up the price. I pay extra in 50% of the cases even after I barter them down and they "cheat" me if that is true cheating.


Scenario 2: A Western tourist comes to a poor area where the people are literally starving and haggles a poor local down to 1/2 the cost of what an item normally sells for and the poor local takes it because he really doesn't have many other choices to feed himself or his family.



I have experienced and/or seen both scenarios more than once.

It DOES seem to me that there is an ethic here, but I am not sure all that it entails. Unfair weights and measures seems to apply in both directions. Neither party should take advanatage of the other even while trying to get a good deal - not sure how those two things interact.....


Signed,
Confused.

 

[TimV]

To a starving man, a bag of rice is "worth" his house. Does this mean that you must pay 150k for a bag of rice?

I gave this matter a lot of thought a few years ago during the housing bubble. A young friend was buying up property, and a young man sitting across the table couldn't buy a house as the prices were inflated due largely to speculation of the same sort the other friend was engaging in.

I came across a sermon from Spurgeon which you can read here:

Withholding Corn  --  C. H. Spurgeon

it is on that verse which deals in speculation

He that withholdeth corn, the people shall curse him: but blessing shall be upon the head of him that selleth it.”—Proverbs 11:26.

The idea is that just because something is permitted by God's law doesn't make it right. Engaging is economic activity has all sorts of shades and perhaps this is the reason there are not laws dealing with every aspect of economic activity (although there are indeed laws that deal with economics). But if one looks long and hard enough one can find at least Scriptural principles to guide.

The other passage that seemed to apply was Numbers chapter 30, which deal with contracts. A head of household is considered responsible for economic decisions. We have a reflection of that in our current law that won't allow those under 18 years old to have a credit card, since it is illegal for someone under 18 to make a contract.

So buying something when both parties are heads of households is lawful, but not always right.

That helped me clear my mind a bit, since once in Junior High School a substitute teacher bragged about buying a rare coin from one of his students. He said he didn't tell the kid the real value as "That wouldn't be good business" and I then decided I'd never be a good businessman since I viewed the sub as a thief. And he was in terms of Biblical law, but if it were at a garage sale sold by an adult or on eBay then it becomes a whole different story.

 

[NaphtaliPress]

If the seller were a friend who didn't know what he had, and was selling a pricey item for a song, would you buy it or tell him the truth about the item. If you'd tell a friend, why not a stranger?

 

[Pergamum]

Tim:

Wow that is a good sermon!!!!

 

[JBaldwin]

REAL SCENARIOS:

In a cross-cultural situation this happens all the time, especially in countries that do not have fixed prices:


Scenario 1 (happens all the time if I don't watch myself, and even when I do):

Me (Mr. Whitey) comes and the locals jack up the price. I pay extra in 50% of the cases even after I barter them down and they "cheat" me if that is true cheating.


Scenario 2: A Western tourist comes to a poor area where the people are literally starving and haggles a poor local down to 1/2 the cost of what an item normally sells for and the poor local takes it because he really doesn't have many other choices to feed himself or his family.



I have experienced and/or seen both scenarios more than once.

It DOES seem to me that there is an ethic here, but I am not sure all that it entails. Unfair weights and measures seems to apply in both directions. Neither party should take advanatage of the other even while trying to get a good deal - not sure how those two things interact.....


Signed,
Confused.

You have a good point. Here's what I am experiencing.

I have been taking our extra eggs and a few other homemade items to our local flea market once a week. I have set a price which is already quite low (lower than what you can pay for the items in the local shops). Ater I pay for the rental of the space and figure in the cost to produce the eggs and make the items, I make a few dollars. Sometimes I only break even. Once in a while, I loose money. Why do I go? I don't want to throw away good eggs.

What bothers me, and it's similar to what you mentioned above. Even after I remind people that they are getting a much better deal than elsewhere (and they know it as much as I do, I check the grocery store prices weekly), they still try to haggle me down.

And by the way, Pergamum, it is cheating if they jack up the price just for you. My regular egg customers pay more than what I sell eggs for at the market, but they ALL know it, because we deliver their eggs to them. They also know that if they come to the market and buy them, they will save 50 cents.

When it comes to items sold at yard sales, I believe if I knew that I was getting something cheaply that could really help someone out financially if they kept it and sold it elsewhere, I would not be able to live with myself if I didn't at least mention it to them ahead of time. On the other hand, many times I have let go of quality items for ridiculously low prices, because I wanted to. I don't find anything in the Bible that says generosity is wrong.

 

[Pergamum]

Wow, more gold from the Spurgeon sermon that Tim linked:

"...The market goes best when it is left alone..."


It seems like Spurgeon was an economist as well!

 

[Backwoods Presbyterian]

I am sure Spurgeon had read Adam Smith.

 

[Davidius]

Wow, more gold from the Spurgeon sermon that Tim linked:

"...The market goes best when it is left alone..."


It seems like Spurgeon was an economist as well!

Spurgeon for President!

 

[Kevin]

This is turning into a "just price" thread.

An object is only "worth" what a real buyer (not a non-existent potental or future buyer) is willing to pay.

If I sell an object for $1.00 then it is because I value one dollar more then I value the object I am selling. The purchaser pays the dollar because he values the object more then the he values the little green piece of paper.

The fact that the buyer of my object is buying it so that my (former) object, when combined with something else (including his specialised knowledge) is then worth more to a third person is not immoral.

If I have a used shirt, and to me it is only a used shirt and I want $1.00 more then I want the shirt, then I sell it. IF I find a buyer, then I sell it.

If the buyer buys my shirt because it was once worn by a famous ball player, and he believes he can sell it to a sports memorbelia collector for $50.00 then he has NOT defrauded me.

The market is simply rewarding him for his specialised knowledge. I do not value this knowledge, and thus am not prepared to spend the many hours over many years needed to gain this knowledge. In fact I never even watch sports.

To me it was, and remains a used shirt worth one dollar.

To a person who values a percieved connection to a famous sports figure, then my shirt may be worth $50.00. That fact is immaterial to the original transaction.

Why would a person who invested a large portion of time to developing a specialised knowledge (probably at great expense, in opportunity cost if nothing else) be required to "give" me his knowlege for free?

This is what some people have argued in this thread. A person has at great expense in time & money, learned about a narrow field of interest. This person then "capitalises" (i.e. turns it into capital) this knowledge, by buying objects from people who value them less & reselling them to people who value them more. This transaction is (according to some) immoral.

Why? Is not knowlege an economic good? Do you not pay to go to school?

If knowledge has value (in money terms) then why would you force someone to "give" this knowlege away. Isn't forcing someone to "give" away something of value with nothing in return theft?