From: Jonathan Egre' <jonathan@mantis.co.uk>
Newsgroups: alt.self-improve
Subject: Re: Is Mr. Robbins for real? I wonder....
Date: Mon, 13 Jul 92 13:06:01 BST
Followup-To: alt.flame
Distribution: world
Organization: Mantis Consultants, Cambridge. UK.

Since "Sternlight" has referred to me by my unadorned and mis-spelled surname
again, and still does not understand my position, I want to clarifiy my 
position.  My apologies to those people who were hoping to see the last of
this debate.

I am redirecting followups to alt.flame, because I think this debate has 
gone on long enough in alt.self-improve.

                                    -o-O-o-

analyst@netcom.com (David Sternlight) writes:

> Egre's latest response clarifies his position somewhat. As I read it,
> he is using "fair" to reflect his personal utility function. I can't
> argue with that, but have to point out that such a definition
> applies to no other, and thus cannot be used to make judgements on
> any price, except for that of whether Egre himself (or anyone using
> such a measure) will buy the product.

No, this is not my position, although I can see how you might think this.
I am *not* saying that $170 is more than I would *get* out of Tony Robbins'
course.  I am saying that it is *unethical* to charge "excessive" amounts of
money in return for a product whose benefits were vague and not guaranteed 
for all individuals.  "Excessive" is a vague term, but I certainly do not
mean "more than anybody is prepared to pay" or any other term derived from
economic theory. 

The key difference between the case of a person selling motivational aids
and a person selling the servive of painting your house, or a hi-fi, 
is that the motivational aids are not *guaranteed* to have any specific
benefit.  If you pay a painter, you have an expectation, supported by law
(depends on the laws of your country, but usually true), of having your
house painted.  If you purchase a hi-fi, you have a legal expectation that
you will possess a device that plays CD's, radio, whatever.  But if you 
purchase a motivational aid, then you are *hoping* to become more productive,
more assertive, or whatever - that's why you hand over your money.  But these
improvements are not guarenteed.  What is guaranteed is that you will 
receive a book, or a tape, or whatever.

My point is that I believe it is unthical to charge *vastly* more than 
production cost when people are paying money for something that you cannot
guarantee to a reasonably high level.  Note that in other fields - for 
example, a surgical operation which does not have a high success rate -
the chance of success is usually mentioned if it is not close to 100%.

The self-help industry as a whole has a track record of claiming that 
*everybody* who buys a particular product will receive a particular set of
benefits.  They never say "If you buy our product you will have a 55% chance
of making more friends".  If they did then I would not be claiming that 
charging 20 times production cost for their product was unethical.
The problem is compounded by the fact that the very people who need self-help
products are, in general (and in my opinion), *less* likely to realise that 
success rates are not as good as all the advertising suggests and *less*
likely to be able to easily afford $200 or whatever.

As somebody has pointed out, there is a good reason why vendors of self-help
products do not admit to less than a 100% success rate (namely, because these
products depend to some extent on the purchaser's confidence).  This is
understandable; but, under the circumstances of not wanting to warn customers
by admitting to mediocre success rates, I think it is unethical to charge 
"excessive" prices.  Whether or not Tony Robbins' prices are "excessive"
is a matter of opinion, and a separate question from the general issue of
whether or not it is "ethical" for a person to charge 20 times unit cost for
a product which is advertised as having a success rate of close to 100%, but
which actually has a success rate of more like 60% (so 40% of the customers
are *unknowingly* paying 20 times production cost for a product that won't 
work for them).

One of the hidden assumptions made by evangelical free marketeers who 
attempt to demonstrate that the free market not only "happens", but is 
beneficial, is that purchasers always have complete information about all
the products.  In the case of self-help products this assumption is no longer
true, and although the free market still "happens", it is no longer 
clearly beneficial (in my opinion).

> Egre is correct that the market system has flaws. That's why we have
> government regulation. At a higher level of abstraction, even those
> flaws aren't absolute, but rather diverge from the utility functions
> of enough people to induce regulation.

I agree with your statement (and the implied desirability of regulation).

You have repeatedly claimed that "it is all supply and demand".  I am not
disputing this (and I have not); what I have been disputing is whether 
certain transactions which are feasable withing the laws of supply and 
demand are ethical.

                                    -o-O-o-

I think we have also misunderstood each other on the issue of supply and 
demand in the case of teachers in schools.  The simple fact is that there
are fewer teachers in our schools than are required.  This *can* reasonably
be described as a national shortage of teachers, even if there is no
shortage in the technical (economists') sense of the word.  And there is 
certainly demand for more teachers in the sense that a lot of people 
desperately want more teachers in schools and are willing to pay for it -
the only problem is that they don't actually have the money.  *Only* in the
strict technical (economists') usage of the words "shortage" and "demand"
is it true to claim that there is not shortage of teachers, and that supply
satisfies demand.

The reason I expanded on your example of supply and demand of teachers is 
that I consider it a good example of the free market producing results which
are widely considered to be undesirable, not an example of the laws of the 
free market being broken.  Note that at that stage in the debate your 
postings carried a tone of [paraphrased] "this is feasable under the rules of
supply and demand, and the free market works, therefore this particular case
(teachers in schools, self-help products) must be good for all of us".

--
Jonathan Egre' = jonathan@mantis.co.uk = jonathan_e@cix.compulink.co.uk
ObOb: The river Ob in Siberia
Newsgroups: alt.self-improve