Besides convenience stores, vending machines are another instrument where businesses engage in unjust pricing. There are tens of millions of vending machines in the United States selling food, beverages, toys, toiletries and even cash (ATM machines). It is common knowledge that the prices for the products sold through these machines are extremely high compared to comparable products sold at local stores. Similar to convenient stores, it is not unjust if the prices for the items sold from vending machines are perhaps 10 percent higher than the average price for the comparable items sold at a local store. But it is unjust when these prices are more than 25 percent higher, and many prices in vending machines are actually 100 to 200 percent higher.
How many convenient stores and vending machines are owned and operated by Christians? With 75 percent of Americans claiming to be Christians, there has to be a significant number. Of course, these Christians are not bothered by the prices that they charge. Objectively, they would have to admit that their prices are significantly higher than the prices for comparable items at local stores. Yet, they don’t want to admit that their prices are unjust and what they are doing is wrong. Why is that? They have allowed themselves to be misled and deceived by the philosophy and principles of amoral capitalist theories. These theories establish the corporation as an amoral intermediary between the business owner and the customer. Based on these theories, owners are immune legally and morally from actions that they engage in through the corporation. Christian business owners have blindly and naively accepted these theories and feel no guilt in what they do in the name of business even though it is objectively wrong.
The price of a good or service is unfairly low when the intent is to drive competition out of business and when it is grossly out of line with prices for comparable goods or services within the same market. Wal-Mart is notorious for pursuing a strategy of unfairly low pricing to eliminate the competition within the local, rural market. In small towns prior to the arrival of Wal-Mart, local businesses were primarily family-owned and operated and relatively small in size. In these towns there were a few pharmacies, clothing stores, furniture stores, hardware stores, and grocery stores. All of these businesses employed a few hundred people. Because these establishments were locally owned and operated, customers dealt with the business owners themselves and the profits from these locally owned businesses were mostly re-invested locally. Upon the arrival of Wal-Mart with their ruthlessly low, subsidized pricing strategy, customers naturally went to Wal-Mart instead of the local businesses. Because Wal-Mart was often selling at a loss which it could handle because of its financial reserves, the small businesses could not compete and eventually had to close. Once the majority of small, local businesses were eliminated, Walmart would increase prices because there was virtually no competition. The local economy and customers actually suffered from all of this. The pay and benefits of the average worker was less than that of the workers of the local, family-owned businesses. Customers coming in could not ask to talk to the owner, and the profits were not re-invested locally.
A similar strategy was used within the trucking industry in the 1980’s after Ronald Reagan deregulated the trucking industry. Large carriers with significant cash reserves lowered prices to a point where they were not making money. Small carriers with little to no cash reserves could not lower their prices to compete with the large carriers. Their revenues suffered to the point where they could not continue operating and the large carriers bought them. After the industry was consolidated into a few large carriers who dominated the market, they raised their prices. There were many independent, small trucking companies that were family run. This strategy that was employed by the large trucking companies enabled by the deregulation of the industry destroyed tens of thousands of these small independent trucking companies and most of them want bankrupt. This was not good for these family-run businesses and it was not good for the economy. Today, forty years later the transportation industry is dominated by a few large carriers who maintain high prices and exploit the drivers who work for them.
It is another common practice by large corporations which want to grow through acquisitions of suppliers to increases their purchases from a supplier until they represent a very significant percentage of the supplier’s business. Once that happens, the large corporation forces the supplier to reduce their prices often to a point where the supplier can no longer operate profitability. When this happens, the supplier is positioned for an easy take-over by the large corporation. Is such a practice fair? Certainly not!
A captive market is a situation in which a consumer is constrained by one or a few suppliers. Captive markets almost always involve unfair, unjust prices. Food and beverage prices within captive markets such as stadiums are unfairly high. While a hotdog at a small restaurant one block from a baseball stadium sells a hotdog for $1.50, the same hotdog costs $4.50 within the stadium. People are so captive within entertainment arenas, that private security guards check people’s personal belongings for contraband food and drink. Food, beverages, and fuel at service facilities within tollway systems which are captive markets are unfairly high. Special events such as college football games, conventions, and special sporting events are also situations were temporary captive markets are artificially created where hotels, restaurants, transportation service providers and parking service providers raise prices to unjust and unfair levels. Once the event is over, the prices return to normal, fair levels.
Another example of a captive market that exists every day is last minute air travel. Many people are forced to make last minute plans to travel by air because of family emergencies or business necessities. The airlines know that they have a captive market with these people and charge unjustly high prices. Besides unjustly high prices for last minute travel, airlines charge change fees ($150 and up), luggage fees, standby fees and fees to get on the plane first. It is not the fees themselves which are unjust but the amount of the fees that are unjust. Airline now also charge a price difference between the original ticket price and the last-minute travel ticket price when a person wants to take an earlier flight on the same day as the original reservation even though there are open seats on the plane. The airline companies see an opportunity to literally get something for nothing (they are charging a fee and there is no cost on their part—it is 100% profit) and they feel no guilt in this. It is outrageous, but no one expresses outrage.
Gasoline stations raise prices before holidays knowing people are going to be travelling. They raise prices solely for the sake of profit, there is no other reason. Is that fair, is that just? It is not.
Businesses are also victims of unjust prices within captive markets. If there is only one supplier within an area from which the business has to purchase, the supplier usually sets unjustly high prices knowing that the business has no choice. Do businesses within captive markets have to charge unfairly high prices? Certainly not! Amoral capitalist economy theories support and encourage the practice of setting excessively high prices in captive markets. The owners of the corporations that do so don’t care that these prices are unjust and counter to the objectives of the US economy.
Extreme changes in price (interest rates are prices) are very detrimental to a balanced economy and need to be prevented. Consumers and business customers cannot adjust to extreme price changes. From 2003 through 2008 the price of petroleum derivatives almost doubled. This extreme increase had a severe impact on the transportation industry, on virtually every industry relying on the transportation industry as well as on consumers. Consumers and businesses cannot adjust to such an extreme change in prices. The balance of the entire economy was altered because of the unjust, unfair, and sudden increase in the price of petroleum products. And this also has happened for steel, copper, rice, wheat and many other commodities. In order to be fair and have little to no impact on the economy, price changes need to be gradual and they need to correspond to the market’s ability to adapt to such changes.
Stable and fair prices are certainly good for the economy, certainly good for consumers, and actually good for businesses. Price controls (upper and lower limits on price changes) are good for businesses in that they provide stability in planning and prevent ruthless competitors from trying to drive them out of business through unfair, subsidized prices. Unfortunately, fanatical capitalists will cry and scream about price oversight just like the school yard bully who is told that he can no longer bully people. They will employ propaganda campaigns and use tactics to scare people into thinking that price oversight is not good for consumers, not good for business and not good for