Just price

As a fair price (Latin iustum pretium ) a value determined according to ethical and normative criteria value in the exchange of goods is called. The question of the fairness of prices is subject of business ethics and attributed its origin to Aristotle. To assess whether a fair price exists, it must be clarified which justice scale a judgment about the price is based on how the price was determined and whether this value corresponds to the selected scale for justice.

One starts from the principle of commutative justice ( justitia commutativa ), is the question of equivalence in the foreground. Prices are disabled when meet performance and reward. The purchaser must have all property information acquired good and there must be no distortions by exploiting special situations, for example, excessive water prices in drought present. Commutative justice is based on the merit principle. Prior to that, the principle of distributive justice is ( distributive justice ), which is based on the needs. After that prices are unfair, not at least ensure a part of society adequate primary care.

From a legal point of view, unfair prices that are immoral, prohibited. These measures include usury, so a mismatch between performance and counter taking advantage of an emergency situation.

Problems of price evaluation

An award is made, if it is to come to the exchange of goods. In this case, the price of anyone ( political) can be defined ( administered price ), or it is on the market as the market price determined by supply and demand. When evaluating a price - whether political price or market price - a distinction is the use value and exchange value. Is the so-called Wertparadox between these two subjective scales. Good with a high utility value, such as water or a painted picture from a relative, can with high availability have a very low exchange value. On the other hand, goods with a low value in use, such as luxury goods such as diamonds, have a very high exchange value. Problematic from a social point of view are goods that have both a very high utility value and a very high exchange value. This is for example the case when food or living space are so expensive that the poor parts of the population they can not afford.

To avoid the problem of price determination with subjective standards, the price theory was proposed in the history, constitute an objective price the labor value of a commodity ( labor theory of value in Smith, Ricardo and Marx). If in the whole economy, the same work values ​​are used, then commutative justice can be achieved. However, the determination of an objective price has turn problems. Firstly, it is assumed that the goods are produced at a given work value is sellable as well, so a demand for objective value exists at all. An objective value is set to another requires that the wages of any work is measured in the same way, for example after work hours. Due to various personal skills but is the work output per unit of time is not the same for everyone. In addition, the production conditions play an important role. Thus, the generation of a certain amount of grain leads to a poor soil in the mountains or in a fertile river plain to different time effort. As the product is homogeneous, a buyer will not be prepared to pay the higher amount of work by a higher price.

A new approach to the theory of prices resulted from a shift of the question in the late 19th century. Issue was no longer the "correct" price of a good, but the question at what price supply and demand come to cover. This led to the consideration that a buyer purchases exactly the product that it the most value, the marginal utility brings (Carl Menger, Walras, Jevons ). The theory of marginal utility follows the hypothesis that in scarce goods because of the high prices as long as the suppliers produce more as demand exists. As a result, the scarcity gradually reduced and prices will fall gradually as long as, until a price in the market in which supply and demand are equal in height and reach a market equilibrium. Such equilibrium model sets strict requirements: perfect competition, market transparency and the absence of transaction costs. Newer models of industrial economics differentiate according to situations of imperfect market ( monopoly, oligopoly, etc. ), but continues to ask the way, how prices are formed in the market and use the concept of marginal utility. Since this is purely explanatory models for prices, can not be assessed with these concepts, the question of the justice of prices. Market power, social inequality or price discrimination will be shown in their effects, but not normatively assessed.

The distinction between exchange and distributive justice goes back to Aristotle. Basis of exchange is the need for him. In exchange prevails initially justice when performance and reward correspond. However, make sure that is taken into consideration when calculating the performance on social relations: " So how the builder to shoemaker, in the same proportion the shoes behave to the home or food; would not be possible, there would be neither exchange nor joint "Depending on the social position, so the performance can be evaluated in different ways. The distributive justice ( distributive justice ) must ensure order in which after iustitia commutativa ( commutative justice ) can be traded.

In his commentary on Aristotle Albertus Magnus stressed that the price of justice should take account of labor employed and the material used. Even Thomas Aquinas based on Aristotle. It determines the value of a good than market price: "The value of things but who come for the benefit of people in circulation is calculated by reference to the price paid. " However, he restricts " sell expensive or shopping cheaper than a thing is worth, that is in itself unjust and unlawful. " in particular, the exploitation of an emergency is prohibited because of the excessive price is not due to a power seller. On the other hand, holds Thomas in contrast to Aristotle, who rejected this as chrematistics, moderate gains from trade admissible. Thus, the price may be a compensation for the loss of the benefit of the seller.

While Aristotle and Thomas was still important that the price should not lead to a change of the social order, is found in Thomas Cajetan the view that a price is also justified where it accounts for more than the seller to preserve its needs is necessary, it could cause a rise to a higher level is possible. Gabriel Biel also saw trading positive. For him, the just price was determined by the need for an estate of its rarity and the effort to produce it. He said the merchant to also serve as a reward. A stronger emphasis on markets and a negative response to government influenced rates can be found in the Spanish Scholastics, as in Luis de Molina, who spoke in this context of a " natural price ". In contrast, Martin Luther called for an "objective" price, which is determined according to labor, cost, effort and risk. However, he saw the problem of finding an appropriate value for this: "It is not possible, to specify exactly how much you've earned with such toil and labor. It is enough that you then seekest with a clear conscience, to take the right measure, although it's a peculiarity of the trade, that creates the impossible. "

To break with tradition, in the price of both subjective as well as objective measures to bring to bear, there was Thomas Hobbes. His model of society based on contractual conception, which is also relevant for pricing: " The value of all items of a contract is measured after the request of the parties, and therefore the fair value of its customers are willing to pay them is " Distributive justice is here no more input. The price is solely determined subjectively. This also applies to human performance: " The validity or the value of a man is like that of all other things his price. That is, it depends on how much you would pay for the use of his power, and is therefore not absolute, but depends on the needs and the assessment of others. [ ... ] Because like someone, as do most people, themselves attach the highest value, but its true value is not higher than it is esteemed by others " For Hobbes labor is a commodity like any other, which price is determined in the market, the price depends of the demand for the appreciation ( use value ).

Adam Smith is known for his advocacy for the market, its " invisible hand leads to higher efficiency and thus to a greater prosperity than the state control of he criticized mercantilism. In order to investigate which exchange value should have a commodity, Smith deals with the supply side. After the price has both an income for the work as the original value, but also the capital that was invested in means of production, and finally allow for the landowner as ground rent. " [ It ] is the value of a commodity for its owner who does not want to use or consume itself, but exchange it for another, equal to the amount of work that allows him to buy them or to dispose of it. Work is therefore the true or actual measure of the exchangeable value of all commodities. "

For Immanuel Kant, one can derive the demand for a just price of his reflections on the categorical imperative, where it finds based on the " kingdom of ends " that everything has either a price or a dignity. " What has a price in its place can also be something else, as an equivalent set,; something about it is sublime beyond all price, and therefore admits of no equivalent, has a dignity. " (GMS BA 77). Claims to his dignity, the man who is never to be treated merely as a means, but always as an end, also claim to experience reciprocity in righteousness. This is particularly true for the wage as the price of labor.

In the labor theory of value by Karl Marx, the work has a dual character: "All work is, on the one hand expenditure of human labor power in the physiological sense, and in this capacity the same human or abstract human labor, it is the value of goods. All work is on the other expenditure of human labor power in a special form of dedicated, and in this capacity of concrete useful labor, it produces use-values ​​. " ( Das Kapital, MEW 23, p 61) The concrete work on a product creates a useful utility value. Abstract labor is, however, as working in the exchange value of a product a, which determines the price of a commodity on the market. " The daily or weekly value of labor power is quite different from the daily or weekly operation of this force, as was the food, which requires a horse that is quite different from the time that it can carry a rider. The quantity of labor, which is limited by the value of the labor power of the worker, in no way constitutes a limit on the quantity of labor which is able to do its work force. " (Wage, price, profit, MEW 16, 133) In addition to the basic idea of ​​the value of labor took Marx by David Ricardo indication that the capital investment would resolve after the profit rate of each industry and thus contributes to the profit possibility to control the use of capital. However, the use of capital determines the respective prices of production. By the relations of production of capitalism, the value of the work from the value of the goods and is itself a commodity resolves. This leads to alienation, abandonment and impoverishment. At least in Marx the question of the just price is even if Marx and Engels saw a question of social justice, even the solution to distribution problems in historical materialism not as a question of justice, but in the overthrow of capitalism: " The materialistic conception of history starts from the proposition that the production, and, next to production, the exchange of things produced, is the basis of all social structure; that in every society historically occurring distribution of products, and with it the social division into classes or estates, is dependent upon what is and is produced and exchanged as -produced. Thereafter, the final causes of all social changes and political revolutions are to be sought, not in the minds of people, in man's better insight into eternal truth and justice, but in changes in the production and exchange manner; they are to be sought not in the philosophy but in the economics of each particular epoch " Marx therefore recommended that the working class ". Instead of the conservative motto: "A fair day's wage for a fair day's work ", they should write on their banner the revolutionary watchword "Down with the wage system " ( wage, price, profit, MEW 16, 152)

For the economist Gustav Schmoller v., which is attributable to the socialists, it was to be suitable also ethical values ​​in economic theory. When it occurs besides commutative justice again distributive justice in the form of social institutions: "We call today, above all, next to the fair exchange traffic just volkswirthschaftliche institutions, that is, we demand that the complexes of rules of morality and justice, which groups together control of working and living together people for specific directions, remain in their results with those ideals in harmony, which are reaching today ruling or to rule on the basis of our moral and religious ideas. " in this sense, Schmoller speaks for state intervention, market failure from. The official and the free formation of prices each have their advantages and disadvantages and so need to correct each other.

Also Oswald von Nell- Breuning an important representative of Catholic social ethics held a dualism of state and educated at market leading prices to be appropriate. In economic policy, it is in the first step is to create a sensible order, which also takes into account ethical principles, 'the object of the social structure policy is therefore first the target choice: which social structure resulting in the current total Verumständung, where this is to be accepted as a given, the well-being of the members of the body social? Then the choice of means, under the in the economic field with the first place is the reduction of those data that lead to that structure of wages and prices, and thus to that income and in other visual ability layering, which leave the base suitable for as correctly recognized social structure. " objective function of the economy is an optimal satisfaction of needs and ensuring the maintenance care. If there is a properly -designed order, also arise in the market using the equivalence principle ( commutative justice ) a proper price a. " The determinants of value are also the determinants of the 'right' price and the 'right' price in the economic sense is the one that just ' price within the meaning of morality " State intervention may be necessary where abusive conditions, especially market power by monopolies and cartels revealed. Basically, however, the primacy of the economy and the principle of subsidiarity apply.

Flush formulated by the sociologist Niklas Luhmann 's historical concept of the thing so:

" Sociologically, that covered by the semantics of the ' just price ' therefore to moral standards, so. Upon the social system as a whole, ie to the general conditions of human society and in particular to stratification. It was directed against purely individual pursuit of profit taking advantage of all which lends itself to opportunities the semantics of ' fair price ' is therefore to be read in light of the difference of the common good (which every individual makes his due ) and selfishness. "

Today's meaning

The concept of the just price is considered in the oriented on the modern market economy economics on a broad front as impractical - inter alia because there is no objective way to determine a "fair " price. After the introduction of social legislation that guarantees a living wage, the market price principle was accepted in the Western industrialized countries the majority that leaves the pricing the offer and the demand. Pay equity is made in the negotiation process between workers and employers without the involvement of the state through their associations. Task of governance is creating the framework, for example to prevent distortions in prices caused by competition policy. Interventionist state intervention or general government price regulations are mostly rejected the argument of lack of efficiency. It is controversial to what extent the state should interfere with social policy in the economic order and whether a supply-side policy or a demand policy of economic development is better. Should the market price too much on the "perceived " fair price, so the policy works even today with market regulation in the pricing of a - for example, through special taxes ( tobacco tax, fuel tax ), state allowances, tax deductions, a reduced tax, legal regulations such as encryption or commandments. In the case of rising crude oil prices, the German federal government responded by releasing government stockpiles. The question of the just price is still reflected in the debate about minimum wages, which are designed to ensure at least to satisfactory life at full working time, or to the salaries of managers.

Fair Trade

Main article: fair trade

In foreign trade is attempted under the heading of fair trade from a number of organizations, products from developing countries at a fair ( ie fair ) price for sale.

Demarcation: Fair Value

In the evaluation of assets pursuant to IFRS fair value is determined. But this is just not a fair price for the purposes of this Article, but an attempt to find a rating as close to the market price.