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Just price
The just price is a theory ofethics ineconomics that attempts to
set standards of fairness in transactions.
With intellectual roots inancient Greek philosophy, it was
advanced byThomas Aquinas based on an
argument againstusury,which in his time referred to the making
of any rate ofinterest onloans.
StThomas Aquinas taught that raising prices in response to high
demand was a type of theft.
Unjust price: a kind of fraud
The argument against usury was that the lender was receiving
income for nothing, since nothing was
actually lent, rather the money was exchanged. And, a dollar can
only be fairly exchanged for a dollar, so
asking for more is unfair. Aquinas later expanded his argument
to oppose any unfair earnings made in
trade, basing the argument on theGolden Rule.He held that it was
immoral to gain financially without
actually creating something. The Christian should "do unto
others as you would have them do unto you",
meaning he should trade value for value. Aquinas believed that
it was specifically immoral to raise prices
because a particular buyer had an urgent need for what was being
sold and could be persuaded to pay a
higher price because of local conditions:
If someone would be greatly helped by something belonging to
someone else, and the seller not similarly
harmed by losing it, the seller must not sell for a higher
price: because the usefulness that goes to the
buyer comes not from the seller, but from the buyer's needy
condition: no one ought to sell something
that doesn't belong to him.[1]
Summa Theologiae,2-2, q. 77, art. 1
Aquinas would therefore condemn practices such as raising the
price of building supplies in the wake of
anatural disaster.Increased demand caused by the destruction of
existing buildings does not add to a
seller's costs, so to take advantage of buyers' increased
willingness to pay constituted a species offraud in
Aquinas's view.[2]
Aquinas believed all gains made in trade must relate to the
labour exerted by the merchant, not to the
need of the buyer. Hence, he condoned moderate gain as payment
even for unnecessary trade, provided
the price were regulated and kept within certain bounds:
...there is no reason why gain [from trading] may not be
directed to some necessary or even honourable
end; and so trading will be rendered lawful; as when a man uses
moderate gains acquired in trade for the
support of his household, or even to help the needy...
Later reinterpretations of the doctrine
In Aquinas' time, most products were sold by the immediate
producers (i.e. farmers and craftspeople),and wage-labor and
banking were still in their infancy. The role of merchants and
money-lenders was
limited. The laterSchool of Salamanca argued that the just price
is determined by common estimation
which can be identical with the market price -depending on
various circumstances such as relative
bargaining power of sellers and buyers- or can be set by public
authorities. With the rise ofCapitalism,
the use of just price theory faded. In modern economics,
interest is seen as payment for a valuable service,
which is the use of the money, though most banking systems still
forbid excessiveinterest rates.
http://en.wikipedia.org/wiki/Ethicshttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Ancient_Greecehttp://en.wikipedia.org/wiki/Philosophyhttp://en.wikipedia.org/wiki/Thomas_Aquinashttp://en.wikipedia.org/wiki/Usuryhttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Thomas_Aquinashttp://en.wikipedia.org/wiki/Ethic_of_reciprocityhttp://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-1http://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-1http://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-1http://en.wikipedia.org/wiki/Summa_Theologicahttp://en.wikipedia.org/wiki/Summa_Theologicahttp://en.wikipedia.org/wiki/Summa_Theologicahttp://en.wikipedia.org/wiki/Natural_disasterhttp://en.wikipedia.org/wiki/Fraudhttp://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-2http://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-2http://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-2http://en.wikipedia.org/wiki/School_of_Salamancahttp://en.wikipedia.org/wiki/Capitalismhttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Capitalismhttp://en.wikipedia.org/wiki/School_of_Salamancahttp://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-2http://en.wikipedia.org/wiki/Fraudhttp://en.wikipedia.org/wiki/Natural_disasterhttp://en.wikipedia.org/wiki/Summa_Theologicahttp://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-1http://en.wikipedia.org/wiki/Ethic_of_reciprocityhttp://en.wikipedia.org/wiki/Thomas_Aquinashttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Usuryhttp://en.wikipedia.org/wiki/Thomas_Aquinashttp://en.wikipedia.org/wiki/Philosophyhttp://en.wikipedia.org/wiki/Ancient_Greecehttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Ethics
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Likewise, during the rapid expansion of capitalism over the past
several centuries the theory of the just
price was used to justify popular action against merchants who
raised their prices in years of dearth. The
Marxist historianE. P. Thompson emphasized the continuing force
of this tradition in his pioneering article
on the "Moral Economy of the English Crowd in the Eighteenth
Century."[3] Other historians and
sociologists have uncovered the same phenomenon in variety of
other situations including peasants riots
in continental Europe during the nineteenth century and in many
developing countries in the twentieth.The political scientistJames
C. Scott,for example, showed how this ideology could be used as a
method
of resisting authority in The Moral Economy of the Peasant:
Subsistence and Rebellion in Southeast Asia.[4]
Source:http://en.wikipedia.org/w/index.php?title=Just_price&printable=yes
http://en.wikipedia.org/wiki/E._P._Thompsonhttp://en.wikipedia.org/wiki/Moral_economyhttp://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-3http://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-3http://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-3http://en.wikipedia.org/wiki/James_C._Scotthttp://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-4http://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-4http://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-4http://en.wikipedia.org/w/index.php?title=Just_price&printable=yeshttp://en.wikipedia.org/w/index.php?title=Just_price&printable=yeshttp://en.wikipedia.org/w/index.php?title=Just_price&printable=yeshttp://en.wikipedia.org/w/index.php?title=Just_price&printable=yeshttp://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-4http://en.wikipedia.org/wiki/James_C._Scotthttp://en.wikipedia.org/w/index.php?title=Just_price&printable=yes#cite_note-3http://en.wikipedia.org/wiki/Moral_economyhttp://en.wikipedia.org/wiki/E._P._Thompson
