NationStates Jolt Archive

Okay, I'll buy that money isn't everything. I'd rather have my family than my money, and assuming I had a girlfriend I'd rather have her too.

However, I am a strong believer that value is everything. I've observed what seem to be environmental and ethical premiums on certain prices, which I find fascinating. Take, for example, Walmart. Walmart sells at lower prices than almost all of its competition, but not everyone shops at Walmart. Why doesn't everyone else go out of business? The answer is that some of Walmart's achievements can be attributed to unethical or environmentally unfriendly practices. Thus, while Walmart provides a lower price, they also provide a lower value than some of their competitors.

What does this have to do with all of us? Well I would submit that if you take the difference between prices in an unethical firm and an ethical firm selling the same product (assuming they both remain in business with roughly equal profits), you can calculate a morality premium. Basically, that would be how much more people are willing to pay to have the sense that they've done the right thing. I haven't worked out all the empirical parts yet, but what do you guys think?

I agree with your analysis that value is everything, but not necessarily with your assertion as to why WalMart isn't the world's only retailer.

You gotta remember that there are stores that do charge less than WalMart for stuff, you just have to go looking for the stuff. For example, WalMart is probably going to be pulling out of Germany, because German shoppers have dedicated the attention to the matter to find stuff cheaper than what WalMart provides. And as such, they just don't shop there.

I think there are too many subjective variables to really calculate it objectively like that; not everyone places the same moral and ethical value on every aspect of the production cycle, and not everyone has a comparable economic and social environment to calculate an objective premium.

Here's a good question: If you value environmental protection and workers rights, what do you do when one might negatively effect the other?

I think there are too many subjective variables to really calculate it objectively like that; not everyone places the same moral and ethical value on every aspect of the production cycle, and not everyone has a comparable economic and social environment to calculate an objective premium.

Here's a good question: If you value environmental protection and workers rights, what do you do when one might negatively effect the other?
Very true, value is subjective and individuals will put different values on different things. One cannot argue for a moral premium because one cannot argue objective morality. Really, I'd say that there is one thing that is really necessary in terms to look at from companies and that is whether or not they violate somebody's rights. If they do so then they need to be fined for that, if they don't there is nothing wrong with what they do. Delivering a profit is one of the major social responsibilities of business.

It depends on which you value more of course. Values can most certainly be ranked ordinally.

Yes, but again that is case dependent; the variables don't always remain constant and vary from person to person.

Money helps a lot.

But money does'nt buy:

Love
Hapiness

Yes, but again that is case dependent; the variables don't always remain constant and vary from person to person.
I edited my comment. You are right though, I ignored the fact that he was arguing for government imposed values.

Money helps a lot.

But money does'nt buy:

Love
Hapiness


Sure it can!! Just buy a dog! Voila, now you will always be loved!! Then get a bunch of drugs and now you will be happy!!! Money buys everything!!!:D

Theoretically, there should be a calculable average that will offset those who care a great deal and those who are apathetic. I'm not trying to create a model that applies to every single person, but rather one that gives us an idea of what kind of price people are willing to pay for the same product so they can have the knowledge that they did the right thing.

Furthermore, I can imagine numerous cases where environmental protection and other ethical issues would be confounded. My goal would be to find products on the market where that confounding does not take place and use them as starting points. For example, if I can find a basket of ten goods that have no environmental effect one way or the other and use them to figure out the premium on something like poor labour practices, I should be able to take that information and factor it out of products with both environmental and labour issues to leave just the environmental factors. It would be tough, no doubt, but at the same time it could be quite interesting.

Okay, I'll buy that money isn't everything. I'd rather have my family than my money, and assuming I had a girlfriend I'd rather have her too.

However, I am a strong believer that value is everything. I've observed what seem to be environmental and ethical premiums on certain prices, which I find fascinating. Take, for example, Walmart. Walmart sells at lower prices than almost all of its competition, but not everyone shops at Walmart. Why doesn't everyone else go out of business? The answer is that some of Walmart's achievements can be attributed to unethical or environmentally unfriendly practices. Thus, while Walmart provides a lower price, they also provide a lower value than some of their competitors.

What does this have to do with all of us? Well I would submit that if you take the difference between prices in an unethical firm and an ethical firm selling the same product (assuming they both remain in business with roughly equal profits), you can calculate a morality premium. Basically, that would be how much more people are willing to pay to have the sense that they've done the right thing. I haven't worked out all the empirical parts yet, but what do you guys think?
Unethical can most objectively be seen violations of rights, and if wal-mart is violating rights or laws then it should be punished for such violations. Also, the environment wholly has to do with who is affected by their environmentally unfriendly policies. Pollution is already regarded in economics as an externality, and as such it needs to be dealt in a manner befitting of externalities but has little to do with a moral premium. I'd say that the moral premium is completely unnecessary as it is dealt with in other parts of econ.

Theoretically, there should be a calculable average that will offset those who care a great deal and those who are apathetic. I'm not trying to create a model that applies to every single person, but rather one that gives us an idea of what kind of price people are willing to pay for the same product so they can have the knowledge that they did the right thing.

Furthermore, I can imagine numerous cases where environmental protection and other ethical issues would be confounded. My goal would be to find products on the market where that confounding does not take place and use them as starting points. For example, if I can find a basket of ten goods that have no environmental effect one way or the other and use them to figure out the premium on something like poor labour practices, I should be able to take that information and factor it out of products with both environmental and labour issues to leave just the environmental factors. It would be tough, no doubt, but at the same time it could be quite interesting.
So, why care about the apathetic?? If the problem isn't objectively a problem then why should they have higher prices forced on them, and if it is objectively a violation of rights or an externality then shouldn't it already be dealt with.

So, why care about the apathetic?? If the problem isn't objectively a problem then why should they have higher prices forced on them, and if it is objectively a violation of rights or an externality then shouldn't it already be dealt with.

They shouldn't have anything forced on them unless it's an objective violation of rights.

However, we have to remember that some violations of rights are not objectively illegal; it's not illegal to pay workers minimum wage and few benefits and then use the savings to undercut competitors who pay more and offer better benefits. Of course, if that company greatly reduces the standard of living of the displaced employees, which in turn has negative ramifications on the regional economy, should that be considered an externality or simply the outcome of competition?

The question comes down to what should be,objectively illegal or included as an externality and what shouldn't?

Sure it can!! Just buy a dog! Voila, now you will always be loved!! Then get a bunch of drugs and now you will be happy!!! Money buys everything!!!:D

You know nothing of love, young padawan!

They shouldn't have anything forced on them unless it's an objective violation of rights.

However, we have to remember that some violations of rights are not objectively illegal; it's not illegal to pay workers minimum wage and few benefits and then use the savings to undercut competitors who pay more and offer better benefits. Of course, if that company greatly reduces the standard of living of the displaced employees, which in turn has negative ramifications on the regional economy, should that be considered an externality or simply the outcome of competition?

The question comes down to what should be,objectively illegal or included as an externality and what shouldn't?
Well, when I spoke of objective rights I was speaking of negative rights, such as slavery and violations of contracts are wrong. I would say that the case is one of competition as cheaper goods are not a problem and the people who get the jobs apparently still benefit from them. To view this as an externality might be promoting an inefficient use of resources and make the broken window fallacy.

Negative rights are not something difficult to consider. Externalities are involved with the side costs violating another's property, the company's actions are not an externality anyway as they don't violate property rights anyway.

I'm not proposing charging people a morality premium, but rather that one already exists in the difference between ethically made products and unethically made ones. It's a similar concept to the liquidity premium in Finance.

Please, don't misunderstand me. I'm not proposing any government action at all. I'm commenting on a phenomenon that I've noticed.

I have long been a believer in the cost benefit tie into everything. The problem is rather then a hard value scale the intangables have their own personalized value scale.

While I agree everything is weighed in a cost benefit scheme evaluating it in some aspects is exceedingly hard.

I'm not proposing charging people a morality premium, but rather that one already exists in the difference between ethically made products and unethically made ones. It's a similar concept to the liquidity premium in Finance.

Please, don't misunderstand me. I'm not proposing any government action at all. I'm commenting on a phenomenon that I've noticed.
Ah, it is pretty much based on what others depict as immoral though, but I get what you are saying to some extent. You are trying to detect the additional money people are willing to pay to feel moral about their purchases, right? Sorry for misunderstanding.

Well, when I spoke of objective rights I was speaking of negative rights, such as slavery and violations of contracts are wrong. I would say that the case is one of competition as cheaper goods are not a problem and the people who get the jobs apparently still benefit from them. To view this as an externality might be promoting an inefficient use of resources and make the broken window fallacy.

I'm wondering primarily because the absence of competition is a negative right because it represents a breakdown within an already partially inefficient market that bars free competition within the marketplace. Would it not be possible to argue that too much competition within that same partially inefficient market might be a negative right as well because the inefficiencies enable companies to do things that might be impossible in an efficient market?

I'm wondering primarily if the market's inefficiency creates "zones of externality" at both ends of the competitive spectrum; for example, subsidies and tax credits might enable a company to cut costs far beyond the level capable in an efficient market, effectively pushing in to an externality zone of over-optimized competition that is supported only by government intervention. It has been made artificially efficient by government intervention which has corresponding negative effects on the workers.

Negative rights are not something difficult to consider. Externalities are involved with the side costs violating another's property, the company's actions are not an externality anyway as they don't violate property rights anyway.

Hypothetically speaking:

Well, if a company's actions were to, let's say, cause one of the aforementioned employees to lose their property, could that not be construed as a violation of property rights in the sense that the company's actions directly led to that outcome?

I have long been a believer in the cost benefit tie into everything. The problem is rather then a hard value scale the intangables have their own personalized value scale.

While I agree everything is weighed in a cost benefit scheme evaluating it in some aspects is exceedingly hard.
Hence the challenge of it all.

Ah, it is pretty much based on what others depict as immoral though, but I get what you are saying to some extent. You are trying to detect the additional money people are willing to pay to feel moral about their purchases, right? Sorry for misunderstanding.
Exactly. While morality is flexible in many cases, I thought I would take some of the common concerns, especially from the left, and see how much people are willing to pay to practice the values they preach. I find it an interesting dichotomy, for example, that over half of all people in Canada favour emmission reduction, but very few can be bothered to check for things like ISO 14001 (I think) when making their purchases. After all, if we all cared as much as we said we do, environmentally friendly practices would be immensely profitable and a great marketing strategy.

I'm wondering primarily because the absence of competition is a negative right because it represents a breakdown within an already partially inefficient market that bars free competition within the marketplace. Would it not be possible to argue that too much competition within that same partially inefficient market might be a negative right as well because the inefficiencies enable companies to do things that might be impossible in an efficient market? Technically speaking though, wouldn't a right to the absence of competition clash with the even greater right of property, and why would any company have a right to a certain market in the first place? One cannot own a market. I don't see how too much competition is a right though, as competition is created through people's actions and although they may choose to act in a manner there is no right for them to act in such a way, if there is too much competition then members will drop out until it becomes more sustainable.

I'm wondering primarily if the market's inefficiency creates "zones of externality" at both ends of the competitive spectrum; for example, subsidies and tax credits might enable a company to cut costs far beyond the level capable in an efficient market, effectively pushing in to an externality zone of over-optimized competition that is supported only by government intervention. It has been made artificially efficient by government intervention which has corresponding negative effects on the workers.

Well, technically speaking, I think that the issue there is the subsidies and such more than the idea of externalities. Unnecessary subsidies distort the market and cause it to fail but I don't think that really counts as an externality though as externalities are shifting costs and can be dealt with better defined property rights. This is partially just imperfect market structures and those exist anyway but still in most cases work with some level of efficiency. In this case though the government intervention is a major cause, otherwise we would not likely have the same negative impacts on workers. If we cannot eliminate this governmental intervention(as might be the case given political structures) then we need to design laws to limit the distortion.


Hypothetically speaking:

Well, if a company's actions were to, let's say, cause one of the aforementioned employees to lose their property, could that not be construed as a violation of property rights in the sense that the company's actions directly led to that outcome?
It depends on how this was caused. If one destroys the property of another then that company would be responsible, however, that company must have been the direct cause and initiated action against that property.

Technically speaking though, wouldn't a right to the absence of competition clash with the even greater right of property, and why would any company have a right to a certain market in the first place? One cannot own a market. I don't see how too much competition is a right though, as competition is created through people's actions and although they may choose to act in a manner there is no right for them to act in such a way, if there is too much competition then members will drop out until it becomes more sustainable.

Well, yes it would. However, that situation does exist from time to time and has had to be controlled with regulation; the causes of this kind of breakdown are arguable, but suffice to say that it does happen and we have to deal with it.

I would say competition is a right generated through the freedom of individual action in making economic decisions; without individual economic freedom, competition is limited and that can lead to the kinds of market breakdowns associated with the aforementioned lack of competition and other negative rights. Now, it's also true that the market reaches an equilibrium point between the number of competitors and the number of individuals making decisions in the market, but that is the outcome of a free market rather than any artificial interference and so neither leads to a monopoly nor does it lead to a suboptimal competitive market with too many competitors or artificially strong competitive forces.

Well, technically speaking, I think that the issue there is the subsidies and such more than the idea of externalities. Unnecessary subsidies distort the market and cause it to fail but I don't think that really counts as an externality though as externalities are shifting costs and can be dealt with better defined property rights. This is partially just imperfect market structures and those exist anyway but still in most cases work with some level of efficiency. In this case though the government intervention is a major cause, otherwise we would not likely have the same negative impacts on workers. If we cannot eliminate this governmental intervention(as might be the case given political structures) then we need to design laws to limit the distortion.

Of course. That's pretty much what I'm getting at; personally, I feel that things like government intervention are not so much externalities themselves but help to create an environment that increases the number of possible negative externalities by artificially distorting market forces and allowing companies to get away with things a free market would not allow. The positive externalities created by government intervention are outweighed in this case by the negative ones, which leads to the necessity of government regulation to correct its mistakes.


It depends on how this was caused. If one destroys the property of another then that company would be responsible, however, that company must have been the direct cause and initiated action against that property.

Well, if the company were to receive government subsidies that it uses to cut costs to the point where workers' property was negatively affected or were able to use its clout to shape the government's actions in regard to labor policies, would it be directly responsible for violating the positive right to property of those workers?

I would say competition is a right generated through the freedom of individual action in making economic decisions

What's the connection between the freedom of individual action and the freedom of "economic decisions"?

What's the connection between the freedom of individual action and the freedom of "economic decisions"?

Primarily, I'm narrowing it down to a more specific subset of individual action. "Economic decisions" effectively means any interaction with others with the purpose of obtaining goods and services that provide utility. And "freedom" means being able to obtain the goods and services that you want within the parameters necessary for the system to meet the demands of everyone who participates in it.

"Economic decisions" effectively means any interaction with others with the purpose of obtaining goods and services that provide utility.

Then there is no necessary connection between the freedom of "economic decisions" and individual freedom.

After all, the purchase, sale, and seizure of slaves all constitute "interaction with others with the purpose of obtaining goods and services that provide utility," but are also violations of individual liberty.

For a less slanted example, it could be easily questioned whether the goods you exchange and the goods that you exchange your goods for actually "belong" to their owners in the sense necessary for them to constitute individual freedom.

(Personally, I don't see competition as an individual right at all, except perhaps in highly limited contexts; it is a way of running the economy that can be limited, expanded, or adjusted in any way through democratic means if doing so would benefit society as a whole.)

Well, yes it would. However, that situation does exist from time to time and has had to be controlled with regulation; the causes of this kind of breakdown are arguable, but suffice to say that it does happen and we have to deal with it. I won't say that monopolies and such necessarily do not exist, and if one arises then we must be utilitarian about it.

I would say competition is a right generated through the freedom of individual action in making economic decisions; without individual economic freedom, competition is limited and that can lead to the kinds of market breakdowns associated with the aforementioned lack of competition and other negative rights. Now, it's also true that the market reaches an equilibrium point between the number of competitors and the number of individuals making decisions in the market, but that is the outcome of a free market rather than any artificial interference and so neither leads to a monopoly nor does it lead to a suboptimal competitive market with too many competitors or artificially strong competitive forces. Whatever the reason, competition arises from freedom and rights. Negative rights don't mess with competition though and are generally considered to be a part of the market. I mean, the rights we have without governmental intervention are negative rights as opposed to positive ones.

Of course. That's pretty much what I'm getting at; personally, I feel that things like government intervention are not so much externalities themselves but help to create an environment that increases the number of possible negative externalities by artificially distorting market forces and allowing companies to get away with things a free market would not allow. The positive externalities created by government intervention are outweighed in this case by the negative ones, which leads to the necessity of government regulation to correct its mistakes. In cases they do, however, I would just put a lot of that stuff into generic market failure rather than externality. The only question is whether regulation really is a correction of the error or perhaps even a measure that worsens the issue.


Well, if the company were to receive government subsidies that it uses to cut costs to the point where workers' property was negatively affected or were able to use its clout to shape the government's actions in regard to labor policies, would it be directly responsible for violating the positive right to property of those workers?
Property isn't a positive right, it is a negative right. Negative rights are rights that exist derived from individuals, positive rights require being granted by governments.... that is if we are on the same topic of positive vs negative. Some individuals do not use the same definition as the wiki I go off of. The company is not violating a right in this instance though, it may be argued that the legal structure has been distorted into an unfavorable manner by a distortion of the market, however, people still can vote with their feet. In this case though... the big issue is the market distortion, the company did no violation, the employees did nothing wrong, just the government used its clout in a manner that made everything worse. Perhaps some positive action by the government needs to be undertaken to make things better(although that does give them a bit of trust), or perhaps the government action needs to be restructured in a way as to avoid this mess like why does the corporation need the subsidy in the first place?

Property isn't a positive right, it is a negative right. Negative rights are rights that exist derived from individuals, positive rights require being granted by governments.... that is if we are on the same topic of positive vs negative. Some individuals do not use the same definition as the wiki I go off of.

You are thinking positive and natural (or legal and natural), not positive and negative (http://en.wikipedia.org/wiki/Negative_and_positive_rights).

You are thinking positive and natural (or legal and natural), not positive and negative (http://en.wikipedia.org/wiki/Negative_and_positive_rights).
Oh..... wait... how am I not thinking of those??? Ok.... you are probably right, I think I misinterpreted negative as natural as a lot of the negative rights are similar to the natural, like the property thing is where I said it was.

Soheran, what do you think?

I used to work in advertising. Our outfit didn't formally calculate a morality premium, but we did routinely just tack on an extra amount of money to anything that was even remotely marketed as a green product, or as being healthy or natural, even if the product could have been sold more cheaply than a regular product (which was sometimes the case).

I hated that profession, and got out of it early. Advertising is the cancer of human information systems, in my opinion.

One of the things that bothers me though is that if the goal is to get people to use more environmental friendly products, or just products that are better for them, they need to be able to compete with stuff that _is_ cheaper and more profitable. Often, especially when a particular product is just starting out, green or not, it's simply not going to be able to take advantage of economies of volume, and won't have the same distribution channels. That's often why many greener products are more expensive.

But sometimes they're more expensive because the companies who prouce them are run by people with less business savvy or fewer connections. And sometimes they're more expensive because they're basically the same kind of crap sold as "green", with a higher price label on it.

Now, if the goal here is actally just to figure out how much more you can charge, based on whether a product is, or is billed as, green, I'm fairly sure that big companies and ad firms already have their own methods of calculating that. I wish people wouldn't though.

What I really wish, personally, was that the main method of competition between products would be based on value for money, and quality of product, and for me, quality of product would include that the product be made according to healthy and environmentally-friendly standards.

There is a whole segment of the product marketing industry that targets hippie-tree-huggers of various stripes. They're not marketing to everybody - they make labels that appeal to people who already want to buy certain types of products. When you see those "recycled paper" boxes and labels that look like used cardboard... that's not because recycled paper needs to look like that. In 1989, we could make slick looking packages with recycled materials that looked exactly the same as normal packaging... it is, after all... just paper. It's not rocket science.

But people don't _believe_ it's recycled paper unless it looks like crap. Or looks brown. Some of the "recycled paper" boxes I've seen on products in health food stores in the last couple of years, the thick, warm-looking brownish stuff... that actually takes more processing to achieve that faux-natural look than regular paper.

I think if you really wanted to calculate a real cost of a product, and determine what it's really worth, for "normal" products versus organic or earth-safe, you'd need to figure out the actual energy and resources and time used for each... and not try to _estimate_ that in money. Money only provides a sort of complicated least-common-denominator measure of what actualy goes into making something.

With the result that something that costs more energy and resources to produce can make more money than something that's cheap in energy and resources to produce.

One of the problems I see with the way we manage stuff in a "free market" (hah! Free? Tell that to my local cable provider!), is that we tend to judge things based on monetary value, instead of actual cost. That enables a few people (actually a lot of people) to make a _lot_ of extra money selling us crap that's not good for us, doesn't work as well, doesn't provide as much benefit, and uses more resources.

Unless some magic hippy tree-hugger revolution occurs, where an autocratic hippie council forces everyone at gunpoint (or psychedelic-point) to start using earth-safe products, (okay, I'm going to have nightmares from that one)... the only way to make earth-friendly, organic, or other such things more competitive is to make them be better, cheaper, and easier to get.

Right now, they're being sold to targeted markets. Sometimes by companies that sell the same or similar products to different markets with different labels.

One of the clients I once did work for was a _major_ supplier of cooking oil, and one of the labels they sold this product under is one you see and hear about all the time, and see commercials for all the time. They sold the _exact_ same product under over fifty different labels, for wildly varying prices. They had labels (with different product names) for people of different ethnicities, economic groups, regions of the country, etc. They had labels to make their stuff look "gourmet", or look "cheap" or even look "healthy."

It was the _exact_ same product. Someone at their company basically calculated how much of the market contained people who bought this or that kind of stuff, and they sold the same stuff to all of them.

This is happening with a lot of your "health" food, folks. Although yes, sometimes it actually is better or different products, they're often not being sold for ethical reasons by moral companies out to make the world better. They're being marketed to a target demographic, with little concern for expanding that demographic, and you're being charged more than you need to be.

Soheran, what do you think?

About your OP?

I think the idea makes sense, but I'll have to go with the trend here and say it would be extremely difficult to calculate, chiefly because non-monetary value comes in all kinds of forms. Isolating the role of moral principle would be next to impossible.

There are also more factors at play here than the simple willingness of individual consumers to sacrifice principle for profit; someone might value environmental protection very highly, for instance, but also not see her purchase as likely to actually aid in the cause, and thus might not be willing to sacrifice much in terms of prices.

I agree with your analysis that value is everything, but not necessarily with your assertion as to why WalMart isn't the world's only retailer.

You gotta remember that there are stores that do charge less than WalMart for stuff, you just have to go looking for the stuff. For example, WalMart is probably going to be pulling out of Germany, because German shoppers have dedicated the attention to the matter to find stuff cheaper than what WalMart provides. And as such, they just don't shop there.

Maybe a bit incorrect: Many Germans are obsessed with cheap prices, but they also made other mistakes like being "jwd" (far away from anything) so the stores are never 'on the way'. The stores are/were also too big and you had to search too much.


To the OP: Of course, ethical values can be assigned a cost. just ask people whether they would be indifferent between $Item1 at $cost1 and $FairerItem at $cost2 and you get a subjective monetary value for ethical behavior. TransFair uses that since years or decades, I think.

To the OP: Of course, ethical values can be assigned a cost. just ask people whether they would be indifferent between $Item1 at $cost1 and $FairerItem at $cost2 and you get a subjective monetary value for ethical behavior. TransFair uses that since years or decades, I think.
Ah, but when you're asked between the two when you don't actually have to buy the product you'll be more likely to pick the moral item than if you buy it once a week at that higher cost. I'd imagine what people say on surveys and what they do in the marketplace are quite different.

Ah, but when you're asked between the two when you don't actually have to buy the product you'll be more likely to pick the moral item than if you buy it once a week at that higher cost. I'd imagine what people say on surveys and what they do in the marketplace are quite different.
Okay, then use these values in a market-test.

Happiness is not everything. It cannot buy money.