Hi,

If a person invents something which there is enormous demand for, how does one know whether they are selling it for an unethical price? After all, asking what a person (in terms of wages) or product (in terms of sales price) is worth seems a bit like asking how long is a piece of string.

Please share your thoughts.

Daniel

How do you define profit?

Do you believe the individual has a right to recover the cost of non-recurring engineering (development cost) that went in to bringing the item to market?

There is no such thing as an ethical value. How much something is worth is the price at which the seller and buyer reach agreement on and then proceed with the trade. Value is therefore, in the eye of the beholder. Anyone can say "Product X is worth $100", but unless they can find someone that agrees with them and is willing to engage in a trade on that price basis, that statement is largely worthless.

It would be, generally agreed, unethical to sell food(which has perpetual high demand) for such a high price, that the majority of customers cannot buy sufficient amounts to stay properly sustained.

As for non-essential items, a Capitalistic Market naturally defines, demand, supply and prices.(you should look into the basic principles of supply/demand for an understanding of this)

Not sure, but you might be trying to get at the unbalance of wealth in the world or in particular societies and/or the greed within these. In that case you have to look at market systems/economies/nations as a whole.

daniel

I'll try asking the question another way.

Do you believe markup and profit are the same thing?

to me if a person invents a thing which is not currently not available in the market and new to the people but not the necessary need of the people then the inventor has the to make a reasonable profit because he made a long effort to invent this thing.

If the invented thing is a "necessity" then it should be of price affordable be poor and if it is a "comfort" or "luxury" then price could be a little higher.

The problem is how to define luxury and necessity.

Take food for example. A loaf of bread isn't just a loaf of bread. It comes in varying styles. Some plain, some quite fancy. Should fancy bread be subsidised as a necessity? If someone feels they need boutique bread that is fair-trade, organically grown and thus more expensive, should that be subsidised? Is butter subsidised as well as margarine? What about peanut butter? What if someone has an allergy to peanuts, and thus uses another spread? Do jams and conserves get a look in, or will they be classified as fruit? Or are spreads not subsidised at all?

Who is going to determine all this? A vast new government bureaucracy? So now, the poor taxpayer is not only paying what are likely to be non-sensical subsidy levels but also paying for a vast amount of public servants to arbitrarily determine the subsidy levels for every single product that is currently being made?