Tuesday, September 27, 2005

Pure Exploitation

I'll admit it - I am quite addicted to eBay. Perhaps my fondness for eBay stems from my view of shopping as purely a transactions cost and eBay as a way to reduce the time I have to spend shopping. Perhaps it is because items in general are less expensive. Or perhaps it is because of the unique items that are available for sale. In perusing eBay this morning, I happened across this auction. I had to chuckle at the irony somewhat -- it is not often that you hear of people exploiting their own loss after a hurricane, amidst charges of "price gouging" and "taking advantage of other people's misfortune." At the same time, I had to marvel at the seller's entrepreneurial spirit.

A few years ago, I remember when Hurricane Isabel came through Virginia. It didn't cause significant damage, but there were power outages and many fallen trees. I was one of the first to take advantage of other people's misfortune. I drove around and found a neighborhood with a number of fallen trees and came across a house with a weeping willow that had fallen across the yard. I knocked on the door and asked the owner if he would like for me to remove the tree. I wasn't sure how much a tree removal service would cost, but I knew my price was less. I made the deal - for $100, I would cut down the tree for him and take all of the branches and logs away. The owner of the house was more than happy that I was making money from his misfortune. He had a heart condition and did not want to risk moving the tree himself. So I suppose not only was I taking advantage of the tree falling through his yard, but also taking advantage of his poor health! Yet, this transaction was mutually beneficial for both parties. What if I had not come along seeking to profit from the misfortune of others? Perhaps the man would have tried to move the tree himself, risking further injury. Or perhaps he would have paid a more expensive tree removal service. Lucky for him, I was competing with others who also wished to exploit the negative impact of Hurricane Isabel. Had there been a law stating that I could not take advantage of this man's misfortune and could not charge him to remove the tree from his yard, I would have just stayed home.

It is comforting to me that there are people with an entrepreneurial spirit who wish to take advantage of my misfortune. In fact, I wish there were more people who wanted to take advantage of my misfortune -- then I might pay less to have my misfortune corrected. For example, I currently have a nail in my car's front tire. I have neither the time nor the inclination to patch the tire myself, but it is certainly an inconvenience having to fill my tire with air a few times a week. Luckily for me, there are at least a dozen tire places within just a short distance, and all of them are competing for my business. They stand ready at a moment's notice to take advantage of my misfortune, so that I don't have to suffer misfortune for long.

Call it what you will: pure exploitation, taking advantage of others, profiting/benefiting from misfortune, etc. This profit-seeking behavior makes people better off than they otherwise would be.

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