RoR: Forum

I wrote, "There is no such thing as a fair or unfair price." Jay replied,

I have some gasoline I'd gladly sell you for $22/gallon.

If you don't want to sell it for less than $22/gallon, then that's certainly your prerogative, but all it means is that you're not especially interested in selling it, because clearly no one would be willing to buy a gallon of gasoline at that price, when they can easily get it for a lot less from another seller. If "fair price" means anything in this example, it simply means a price that is likely to be accepted by a willing buyer. But, strictly speaking, that is not what the term "fair" means. "Fair" means just, and the notion of a just price is a relic of ancient and medieval philosophy. It has no currency among modern economists.

I asked, "'Good' for whom and by what standard."

I explained this in an earlier post. The government's REASON for not wanting, but for needing, to purchase should a clearly evident. This is what I mean by "good cases".

"Needing"? As Rand has so often remarked, "A need is not a claim." I need your car to make a trip. Do I, therefore, have a right to it?

I wrote, "Contrary to your suggestion, materialistic values are quintessentially Objectivist."

There is more than one definition for materialism. However, the definition most commonly used is "tendency to consider material possessions and comfort as more important than spiritual/philosophical) values" (Oxford American Dictionary). Rand soundly criticized materialism.

If that's your definition of "materialism," then how does holding out for a higher price imply that one considers material possessions and comfort as more important than philosophical values? How is holding out for a higher price or refusing to sell a valued possession at odds with Objectivism's philosophical values?

I wrote, "How do you think 'true market value' is determined if not by a process of voluntary exchange between buyer and seller"

Decidedly... not by the voluntary exchange between one buyer and one seller.

It is for the exchange between that buyer and seller. The true market value for that particular exchange is the price that the buyer and seller agree on.

True market value can be determined by a fair and objective market analysis of the subject property and similar properties.

Fair and objective analysis of what? It can only be of the price at which the owner would be willing to sell. So, if the owner is unwilling to sell at that price, then your so-called fair and objective analysis didn't yield the true market value of the subject property, after all, because if it had, then the owner would have been willing to sell at that price. Your "fair and objective market analysis" simply indicates what the property is likely to sell for.

A broker priced my neighbor's house at $750,000 three years ago. The property eventually sold for only $600,000. What was its true market value? If by "true market value," one means the estimated value determined by the broker's "objective" analysis, then it was $750,000, but that's not what it actually sold for, so it's really a misnomer to say that the higher figure was its "true" value. It's true market value was the price that it actually sold for, which was $600,000. The owner couldn't legitimately force a prospective buyer to pay $750,000, just because that's what its true market value was estimated to be, if no buyer was willing to pay that price. Nor could the seller complain that the buyer wasn't willing to pay a "fair" price or negotiate a "fair" trade, just because the buyer was only willing to pay $600,000.

The final price may be a little more or a little less than the true market value.

If it sells for a little more or a little less than the so-called true market value, then that value wasn't the true market value, after all, now was it?! The true market value was the price that it actually sold for. What you're talking about is simply an estimate of the true market value. The true market value itself is determined only at the time of sale. It has to be, for suppose that no one was willing to sell at the estimated true market value -- suppose that everyone was demanding twice the estimated value. On what grounds could that value then be considered "true"?!

However, when the seller is demanding a price clearly inconsistent with the true fair market value of the property - over double the fair market value in our example - he is certainly not interested in a fair exchange.

Again, a fair exchange is one that is voluntary; an unfair exchange, one that is involuntary. If there is anyone who is not interested in a fair exchange, it is the buyer who resorts to eminent domain to obtain possession of someone else's property. Eminent domain is, by definition, an unfair exchange, regardless of how much money the "buyer" gives the owner in exchange for the property. There is nothing unfair about an owner's refusal to sell, any more than there is about a buyer's refusal to buy.

His irrationally high price is just a price. It has no bearing or relation upon the true fair market value.

Why is the high price irrational if the seller doesn't want to accept a lower price? His refusal to accept a lower price simply means that he values the property only at the higher price -- that he would prefer to keep it rather than to sell it at a lower price. What's irrational about that?

- Bill

Post 41

Sunday, September 14, 2008 - 7:50am

Bill,

By your logic, then, any and all prices are fair, which is why I offered you $22 per gallon gasoline. Sticking to my example - sticking only to my example - a fair , documentable, established market value for the property was $260,000. The sellers in question demanded $600,000. I made these numbers distinctively disparate so there could be no question as to the seller's intent to extract more-than-the-value-of-the-land from the government which had-no-option-to-go-around the property. These are the circumstances of this case. Arguing to alter the circumstances is not an option.

Not all agreed prices are fair, even if technically fair by virtue of agreement. It is easy to overpay, whether through carelessness, ignorance, lack of viable alternatives, or lack of time. It is just as easy to overcharge, as in the example.

It was suggested that I provide an example of where eminent domain might be justifiable. I provided two examples, each with different levels of consequence. I have even conceded that eminent domain is not justifiable in ethical principal. The sole question is to whether there are situations where the consequences of not having a mechanism (such as eminent domain) might outweigh the best intention of the ethical issues. The wartime scenario that I presented makes a stronger case. The peacetime scenario is weaker, but still worth consideration given the facts presented (but you'll have to stick to those facts to answer).

jt
(Edited by Jay Abbott on 9/14, 8:01am)

Post 42

Sunday, September 14, 2008 - 10:22am

By your logic, then, any and all prices are fair, which is why I offered you $22 per gallon gasoline.

Any and all voluntary exchanges are fair, and any and all involuntary exchanges are unfair. Do you get that? This is true by virtue of the principle of individual rights. So, you could say that any price that is determined by voluntary agreement of both buyer and seller is "fair" and any price that is not so determined is "unfair." But beyond that, there is no such thing as a "fair" or "unfair" price. The notion of an "unfair" price that is arrived at voluntarily is a fiction. It is what underlies the commonly held view of "price gouging" and of price controls. And it is what is used to justify rent control, farm price supports and minimum-wage laws. You have accepted the moral premises of the statists and interventionists, perhaps without realizing it.

Sticking to my example - sticking only to my example - a fair , documentable, established market value for the property was $260,000.

Jay, have you been reading my replies? I've already addressed that argument. There is no such thing as an "established market value" for a property that doesn't sell at that price. If it doesn't sell at that price, then that's not its market value. You can certainly estimate its market value -- what it is likely to sell for -- by observing what other similar properties are selling for, which is what the locution "fair market value" refers to in common parlance, but the terminology is misleading and is strictly speaking a misnomer, because the so-called "fair market value" of a particular property is simply an estimate of what it will sell for, given what other similar properties have sold for. It's true fair market value is what it actually sells for.

The sellers in question demanded $600,000. I made these numbers distinctively disparate so there could be no question as to the seller's intent to extract more-than-the-value-of-the-land from the government which had-no-option-to-go-around the property.

Jay, I got that. If you recall, my reply to you was to ask the obviously rhetorical question: Value of the land TO WHOM? There is no such thing as an intrinsic land value independently of the value that the owner places on it.

Not all agreed prices are fair, even if technically fair by virtue of agreement.

Do words have any firm meanings to you? If all agreed upon prices are technically fair by virtue of agreement, then they're fair.

It is easy to overpay, whether through carelessness, ignorance, lack of viable alternatives, or lack of time. It is just as easy to overcharge, as in the example.

To say that you "overpaid" through carelessness or ignorance simply means that had you been more careful or vigilant, you could have bought it from a willing seller at a lower price. To say that you overpaid through a lack of viable alternatives or a lack of time makes no sense. If there were no cheaper alternatives available within your time frame and the transaction was voluntary, then you didn't overpay.

It was suggested that I provide an example of where eminent domain might be justifiable. I provided two examples, each with different levels of consequence. I have even conceded that eminent domain is not justifiable in ethical principal.

If it's not justifiable in ethical principle, then why have you argued that the owner's demanding a far higher price than the so-called "true market value" is unfair? I thought you were saying that under these circumstances eminent domain was ethically justifiable, because the owner was holding out for an unfair price?

The sole question is to whether there are situations where the consequences of not having a mechanism (such as eminent domain) might outweigh the best intention of the ethical issues.

Look, Jay, nothing "outweighs" ethics. What is ethically justifiable is what ought to prevail. That's what "ethically justifiable" means.

The wartime scenario that I presented makes a stronger case. The peacetime scenario is weaker, but still worth consideration given the facts presented (but you'll have to stick to those facts to answer).

If you're going to argue that expropriating someone's property in wartime is justifiable, you'll have to show that by not selling it, the owner is somehow giving aid and comfort to the enemy or allowing the enemy to establish a beachhead, or some similar rationale. In such cases, the owner would be guilty of initiating force, and your seizing the property would be an exercise of retaliatory force. But barring that, you would have no right to seize the property. Seizing it simply in in order to build a road that is more convenient for motorists is not justifiable, precisely because it does violate the owner's property rights.

- Bill
(Edited by William Dwyer on 9/14, 10:24am)

Post 43

Sunday, September 14, 2008 - 1:30pm

Jay, you are using "fair" in a conventional sense that Objectivists find problematic.

First, can you not see that one could describe the price as reasonable or unreasonable, rather fair or unfair? Prices are like opinions - in themselves they are neither fair nor unfair. The fact that you like chocolate better than vanilla is not fair nor unfair to me. Because of that desire you may be willing to trade me your vanilla ice cream cone, but not your chocolate cone. That too, is not fair nor unfair. So if you told me that you would part with the vanilla for a quarter, but the chocolate only for ten bucks, then that would not be fair or unfair either.

Fairness, according to Objectivism, has to do with justice, not opinion and value. It is fair to let a person set his own price. It is fair to let you decide whether or not to pay that price. It is not fair for a third party to step in, without consent, and say that it will use force to set the terms of trade, since it knows better, or for whatever reason.

Bill's points above are fully correct. Ignore, for a second, the specific prices he uses as examples, and see if you can understand the deeper point he is making.

Post 44

Sunday, September 14, 2008 - 4:00pm

Bill,

First, to put it to rest, it appears that you would agree with use of a mechanism such as eminent domain (rather than just seizing) in the wartime example. Your justification is that preventing the purchase would therefore interfere with the defense effort (thus aiding the enemy), and is therefore has an ethical basis. Good response - that is what I would have said.

The second example is not on that same ethical plane. The ethical approach is to say tough luck to the government, and to those people whose lives only might, in theory, be saved, protected, or improved by the new highway.

Our discussion seems to be complicated by our using the term "fair price" in two completely different contexts. Please consider then, that when I am saying "fair price" or "fair market value" that I mean "reasonable price" and "reasonable/true market value". Market values are frequently quoted as a range - sufficient enough for our purposes here - and they are determined by mathematical formulas established by the realty industry. Reasonable/true market values will (generally) fall within that calculated range.

In my example, the holdout landowners property is not worth any more than those others who sold. If the highway project were cancelled, their property values would likely revert to something less than what was originally offered. In essence, those landowners are quite legally (and ethically?) forcing or threatening to stop the project, in an effort to extort more money than their property is actually worth. And I would like to emphasize that 'extort' is the correct word. The only extra value involved is the value extorted by threat.

Yes, those landowners are ethically within their right to set whatever price they want, to sell or not sell, and even to try extorting an unreasonable price. However, I think we have to face the fact that that there are severe, and tangible consequences for accepting a hands off approach in this area. Conservatively speaking, we could forget about our interstate highway system, we could get accustomed to having more, less efficient, local electrical power plants (trouble getting right-of-way for power lines), learn to live with fewer sewer systems (adjust to using local septic tanks instead), learn to pay treble or quadruple for our food and other products (fewer rail lines & fewer highways means lousy distribution). I'm sure the list could run on and on.

I've said before that the world is a complex place, and often demands more complex solutions. I don't doubt for a minute that there is an objective solution to this question. I'm just not sure it is the one so far suggested.

jt

(Edited by Jay Abbott on 9/14, 4:25pm)

Post 45

Monday, September 15, 2008 - 1:21am

Jay wrote,

Our discussion seems to be complicated by our using the term "fair price" in two completely different contexts. Please consider then, that when I am saying "fair price" or "fair market value" that I mean "reasonable price" and "reasonable/true market value".

Whether a price is reasonable or unreasonable depends on how much a seller wants to sell, or a buyer wants to purchase, an item offered for sale. There is nothing unreasonable about demanding a price substantially above what other similar properties are selling for, if the owner is not especially interested in selling the property. The so-called "fair market value" may not be enough to induce him to sell if his property is worth more to him than what others are willing to pay him for it.

Market values are frequently quoted as a range - sufficient enough for our purposes here - and they are determined by mathematical formulas established by the realty industry. Reasonable/true market values will (generally) fall within that calculated range.

But that range pertains to sellers who are eager to find a buyer for the property. The price range tells the seller what he should charge if he wants to sell the property within a certain period of time. It does not apply to property owners who are not looking for buyers.

In my example, the holdout landowners property is not worth any more than those others who sold.

Worth more to whom? It's certainly worth more to the property owner if he's not interested in selling at the price he's being offered. Again, there's no such thing as "intrinsic" value or "intrinsic" worth, which is a point that I made in my last post.

If the highway project were cancelled, their property values would likely revert to something less than what was originally offered. In essence, those landowners are quite legally (and ethically?) forcing or threatening to stop the project, in an effort to extort more money than their property is actually worth.

Not true. They're not attempting to extort more money than their property is "worth," because there is no such thing as intrinsic worth -- no such thing as worth that exists independently of a valuer; there is only worth to the buyer or to the seller. The value of the property to the seller is the price that he is offered for it only if he is willing to sell it at that price. If he is not willing to sell it at that price, then to him, the property is not worth the price he is being offered for it.

Yes, those landowners are ethically within their rights to set at whatever price they want, to sell or not sell, and even to try extorting an unreasonable price.

If the landowners are ethically within their right to set whatever price they want, then the price they set does not constitute extortion. Extortion involves threatening someone with force in order to obtain his property. Nor is it unreasonable for the owners to set whatever price they want for their properties. If they are willing to sell the properties only at a price that is higher than normal, then the price they are asking is perfectly reasonable. Anything less would be unreasonable, because they would be receiving less than the property is worth to them.

However, I think we have to face the fact that that there are severe, and tangible consequences for accepting a hands off approach in this area.

What about the severe and tangible consequences of a hands-on approach -- of giving the government the power to seize our property for whatever it considers a "good cause." We are witnessing those consequences before our very eyes.

Conservatively speaking, we could forget about our interstate highway system, we could get accustomed to having more, less efficient, local electrical power plants (trouble getting right-of-way for power lines), learn to live with fewer sewer systems (adjust to using local septic tanks instead), learn to pay treble or quadruple for our food and other products (fewer rail lines & fewer highways means lousy distribution). I'm sure the list could run on and on.

You're assuming that all of this retarded progress would happen in the absence of eminent domain? Why? There are, in fact, some very strong incentives for landowners who are within the area of a planned road construction to sell part of their property to the developer. Because the remainder of the property will then be in close proximity to a road or thoroughfare, the value that it will command on the open market will increase, giving owners an incentive to offer the developer an especially good deal. In fact, many landowners have voluntarily donated land for private sector right of ways for this very reason. (See Daniel Klein, "The Voluntary Provision of Public Goods? The Turnpike Companies of Early America, " Economic Inquiry 28: 788-812.) Also, as economist Bruce Benson notes, private land developers frequently donate land to the state so it can build roads that connect their developments to public highways.

Moreover, you're assuming that the presumed hold-outs are doing so, because they already know that a big project needs their land. This may be true for well publicized state run projects, but a private developer could keep his project a secret (through "dummy" buyers) until he acquires the properties he needs to complete the project. And, as it turns out, private developers are frequently able to consolidate large parcels of land without being stopped by hold outs. (See Starkie, D.N.M. 1990. "The Private Financing of Road Infrastructure." Transportation and Society Discussion Paper No. 11, Oxford University.) In fact, the first two modern privately provided highways in the U.S. , the Dulles Greenway in Virginia and SR 91 in California both got the land they required through bargaining instead of relying on eminent domain.

One strategy that the private buyer of a right of way might use if he wants to make his project known to the public is to pick two possible routes, then inform property owners on each route that he is interested in buying their properties and for them to submit bids in competition with property owners on the other route. Both sets of property owners will want to submit a bid that is high enough to satisfy the value that they place on their properties but lower than what they think the other sellers will submit; otherwise, they will lose the bid to the other sellers. It is this kind of competition that would temper the incentive of the respective sellers to inflate the value that they actually place on their own properties.

There are, no doubt, other creative solutions to overcoming the hold-out problems that you envision. But none of these would ever be discovered or implemented, if eminent domain could be invoked any time a developer wants the use of someone else's land.

There is also the moral hazard of a developer's lobbying the government to have the property condemned on some fraudulent pretext in order to lower the property value and the sale price. When governmental coercion is always available as an option, the incentive to abuse it is omnipresent. There's no arguing with a gun. And if the state can put a gun to the head of a would-be seller to force him to sell at a price that the state determines is "fair," there's no necessity to engage in an argument or a process of negotiation in which both parties benefit through a process of voluntary exchange. Voluntary exchange is clearly preferable to a coerced exchange, if only because in a voluntary exchange, both parties are made better off, whereas in a coerced exchange, only one party is made better off; the other is made worse off.

The reason that in a voluntary exchange both parties are made better off is that the exchange wouldn't take place unless they valued what they were receiving more than what they were giving up. For example, if the owner sells his property in exchange for $500,000, he values the $500,000 more than he values the property. Similarly, in paying the seller $500,00 in exchange for the property, the buyer values the property more than he values the $500,000. The reason that a coerced exchange makes one party better off, but the other worse off, is that the person who is forced to make the exchange values what he is receiving less than what he is giving up. If he didn't, it wouldn't be necessary to force him to part with it in exchange for what he is receiving.

But there is a more fundamental issue here, which is the question of who has the right to determine the disposition of an owner's property -- the owner or a non-owner. If a non-owner does, then there is no such thing as property rights; another agent (in this case, the government) can seize your property for whatever projects it desires and pay you whatever price it deems appropriate.

You're assuming that allowing the government the power of eminent domain will produce better consequences than allowing the owners control over their own properties. There are many examples that refute that assumption. Take the case in which the entire residential community of Poletown was condemned by the city of Detroit in order to provide land for General Motors Corporation to build a new assembly plant. The condemnation displaced 3,438 residents, who sued the city, arguing that the takings did not constitute a public use. The city countered that massive unemployment was going to occur if the plant was not built. The Michigan Supreme Court agreed with the city. If you give the government the power to take your property without your consent, don't complain when it abuses that power, as it inevitably will.

You're also assuming that anyone who refuses to sell his property at a price that other similar properties are currently selling for is being unreasonable. But the prices that other similar properties are currently selling for are one's that the property owners think will attract willing buyers in a reasonably short period of time, for these property owners are eager to sell their properties and are looking for buyers. It's an entirely different story for property owners who are not interesting in selling their properties and are not looking for buyers. What they consider a reasonable price for their properties will necessarily be higher. To offer them the same price as the other sellers are willing to accept is, therefore, unreasonable, because it is unlikely to induce them to sell. In their case, the so-called "fair market price" is not a fair market price at all, because it is too low. How high it has to be depends on how much the respective owners value their own properties. Since there is no obvious price at which they can be expected to sell, it is unjust for the government to dictate a price and then force them to sell at that price.

- Bill

Post 46

Monday, September 15, 2008 - 7:29am

Bill,

I've tried the word "fair" and I've tried the word "reasonable". I've referred to the method used for determining (in realtor's words) "fair market value". I'd be willing to try the words "appropriate" and "inappropriate" if I thought they would finally secure the concept that owners in question we trying to extort an inordinately greater value than they were trading. I completely understand what you are saying, but it fails to acknowledge a simple fact. The landowner can believe his plot is worth a billion dollars more than his neighbor's identical plots on either side, but his believing so will never make it so. By your reasoning, it is worth a billion dollars more, two billion... whatever he chooses to believe.

By my reasoning, by conventional reasoning, and by common accepted real world practices, his property - unless containing some unique extra features not present in his neighbor's properties - is worth somewhere in the same ballpark as those other properties. No stretch of the owner's imagination will change that. For sake of the example, I quoted values to be used as fact.

As far as the consequences of not having eminent domain, you are dead on when you question what powers does this imply for the government. That is a major, and quite justified concern, and the government has shown it can abuse those powers.

However, with regard the the consequences on not having a mechanism such as eminent domain, I think my examples are far more realistic. First, we've confined ourselves here to talking about government projects. There is no way such a thing as eminent domain could or should ever be used for private endeavors (It is questionable enough, that it is found in government's hands). So, any such projects will always be open to public scrutiny - the chance of quietly buying up land on the sly is not an option.

Given the large tracts of land required for many of these projects, it is virtually impossible to avoid dealing with some landowners who will either not want to sell, or who will try to extort a greater value than their land is worth (in the market, please). Thus on virtually all major projects, there is a very real risk of failure because the lands may not be secured. Your suggestion of publicizing two routes may sound logical, but considering the studies required to determine just one route do themselves run into millions of dollars, such an idea is impractical - plus as results are published, everyone will know which route the government needs to take. I am not a pessimistic kind of fellow, but I do understand the practical. The suggestion that 'someone will (somehow) find a solution' seems more naive that realistic. If so, such solution would already be out there for our consideration.

In short, I stick to my statement that my estimates of the consequences were probably conservative. And I find that troublesome. And that is why I think the issue is worth examining in greater detail.

jt
(Edited by Jay Abbott on 9/15, 7:41am)

Post 47

Monday, September 15, 2008 - 8:34am

Jay, you said, "By my reasoning, by conventional reasoning, and by common accepted real world practices, his property - unless containing some unique extra features not present in his neighbor's properties - is worth somewhere in the same ballpark as those other properties."

But each man's property does indeed have the one unique extra quality that matters - that it is his own, and no one else's.

Post 48

Monday, September 15, 2008 - 8:59am

Ted,

True, and each man is entitled to think of it that way. However, his perception will not alter the (using realtor's term here) "fair market value" of his property.

jt

Post 49

Monday, September 15, 2008 - 11:23am

I've tried the word "fair" and I've tried the word "reasonable". I've referred to the method used for determining (in realtor's words) "fair market value". I'd be willing to try the words "appropriate" and "inappropriate" if I thought they would finally secure the concept that owners in question were trying to extort an inordinately greater value than they were trading. I completely understand what you are saying, but it fails to acknowledge a simple fact. The landowner can believe his plot is worth a billion dollars more than his neighbor's identical plots on either side, but his believing so will never make it so. By your reasoning, it is worth a billion dollars more, two billion... whatever he chooses to believe.

First of all, and contrary to your assertion, it's clear to me that you don't completely understand what I'm saying. In fact, you don't understand it at all. It's not an issue of language. "Appropriate" and "inappropriate" are no better than "reasonable" and "unreasonable" or "fair" and "unfair." There's nothing inappropriate, unreasonable or unfair about an owner's refusing to sell his property at a price that his neighbors would be willing to sell it for.

Suppose that my neighbor and I have exactly the same kind of house. If I'm not interested in selling my house, because I like the location, but my neighbor is interested in selling his, because he doesn't, then the price that he's willing to accept for his property will be lower than the price that I'm willing to accept for mine. Do you get that? There is no such thing as a fair or true market value which dictates that we should both value our properties the same and be willing to sell them for the same price. People can value the same thing differently and do so quite appropriately, reasonably and fairly. In fact, if they didn't, no trade would ever take place.

Suppose, for example, that a property sells for a million dollars. The buyer must value the property at more than a million dollars, otherwise he wouldn't give the seller the money in exchange for the property. And the seller must value the property at less than a million dollars, otherwise he wouldn't give the buyer the property in exchange for the money.

You say, "The landowner can believe his plot is worth a billion dollars more than his neighbor's identical plots on either side, but his believing so will never make it so. By your reasoning, it is worth a billion dollars more, two billion... whatever he chooses to believe."

Worth a billion dollars more than what and to whom? Worth a billion dollars more to him than his neighbors' identical plots are worth to them? That's entirely possible, if he values his property far more than his neighbors value theirs. Suppose that his neighbors hate the location and would sell their properties and move if someone offered them as little as one hundred thousand dollars for them, whereas he loves the location and wouldn't sell his property and move even if someone offered him a billion, one hundred thousand dollars for it.

To be sure, it highly unlikely that people would place such disparate values on identical pieces of property, but it could happen. Moreover, observe that their respective valuations are not simply "beliefs"; they are actual, bona fide values. It isn't that they "believe" that their properties are, to them, worth these different monetary values. It's that, to them, their properties are worth these different monetary values, for they wouldn't sell them unless they were offered these vastly different amounts of money.

What you evidently mean by "value" or "worth" is a price that is likely to effect a timely sale in the open market. That's fine, but a price that is likely to effect a timely sale in the open market may not be a price that an owner is willing to accept for the sale of his property if he's not especially interested in selling. And if he's not especially interested in selling, then he cannot be faulted for not accepting a price that others, who are interested in selling, would be willing to accept.

- Bill

Post 50

Monday, September 15, 2008 - 11:45am

Bill, your overall point is obviously correct, but you cannot deny that there is such a thing as an "unreasonable" price. The "seller" names an unreasonable price exactly because he does not want to sell. If he did wish to sell, he would try to set a "reasonable" price and to convince the buyer that it is reasonable. It is the sellers and only the sellers prerogative tyo set his price. If the "seller" does not wish to sell, it is fair for him to demand an unreasonable, i.e., ridiculous price.

Post 51

Monday, September 15, 2008 - 12:29pm

Bill, how do you reconcile your position with the following (if you think it makes sense)?

"A free market never loses sight of the question: Of value to whom? And, within the broad field of objectivity, the market value of a product does not reflect its philosophically objective value, but only its socially objective value.
By "philosophically objective," I mean a value estimated from the standpoint of the best possible to man, i.e.., by the criterion of the most rational mind possessing the greatest knowledge, in a given category, in a given period, and in a defined context (nothing can be estimated in an undefined context)." (CUI, 24)

"The philosophically objective value of a product is the evaluation reached by the men with the best grasp of reality (in a specific category and context), regardless of whether or not they are involved in buying and selling the product." (OPAR, 398)

Post 52

Monday, September 15, 2008 - 1:36pm

The mistake lies in taking the 'social context' as if a tribalist mindset, instead of as an individualist mindset, which recognises 'social' as merely aggregates of individuals and not groups of collectives...
the so-called 'fair trade' or 'fair market' value in a realty ascribed notion is that of the tribalist mindset, not individualist one - and that makes all the difference in what is really 'unfair', for in an individualist mindset, there is only 'fair' or 'unfair' to the individual, the group as such does not exist, only other individuals do...

to one who does not wish to sell, there is no such thing as an 'unreasonable' price - there is just not a reasonable one... unreasonable can only be so when both parties wish to sell and one has too high a price for the other to agree to...

(Edited by robert malcom on 9/15, 1:41pm)

Post 53

Monday, September 15, 2008 - 3:44pm

Ted,

Thanks for the clarification.

I feel stumped. I have never seen so many wax so philosophically about the meaning of a phrase that expresses only a single, simple, well defined, unambiguous, commercial meaning.

What is worse is that unreasonable pricing is rather a moot point in the example presented. The owner could just refuse to sell... period. The issue could as easily be discussed on that basis.

jt

Post 54

Monday, September 15, 2008 - 4:16pm

Ted, on post 50 you said, "Bill, your overall point is obviously correct, but you cannot deny that there is such a thing as an "unreasonable" price. The "seller" names an unreasonable price exactly because he does not want to sell. If he did wish to sell, he would try to set a "reasonable" price and to convince the buyer that it is reasonable. It is the sellers and only the sellers prerogative tyo set his price. If the "seller" does not wish to sell, it is fair for him to demand an unreasonable, i.e., ridiculous price."

You were addressing Bill, but it occurred to me that there are two different contexts here for the concept of "reasonable" and "unreasonable." If I don't want to sell my house, maybe I'm old and have a strong sentimental attachment to the house and I don't want to move, then the price that would convince me to move is "unreasonable" in the context of what is the estimated price for a house of a given condition, size and style in that neighborhood - but it is "reasonable" to me because of the personal value the house has for me.

Post 55

Monday, September 15, 2008 - 4:27pm

Jay,

The argument of "fair" and "reasonable" compensation is interjected into arguments for eminent domain to make it appear that taking someones property from them by force is somehow moral. "See, we offered them more than a fair and reasonable price, but they were irrational so we had to get the police to help us get them out."

If you drop the scenario where people refuse to sell at any price you don't move one whit from the moral consideration of taking someone's property by force - imposing your will, your ideas, your desire over theirs. And it doesn't matter if it is the community, a developer with a bought and paid for city or county commissioners, the federal government, or the mafia - someone still gets their property taken using force instead of mutual agreement.

Post 56

Monday, September 15, 2008 - 6:10pm

Yes, Steve, you are right that "unreasonable" was being used in two different ways. The solution is almost always to draw further legitimate distinctions between two sense of one term than to insist that there is only one meaning per word. That insistence on one verbum one intentio is happening above and all over this website.

(Note that "unreasonable" and not right was in quotes.)

(Edited by Ted Keer on 9/15, 7:21pm)

Post 57

Monday, September 15, 2008 - 7:13pm

Ted, did you really mean it when you said I was right? Or were you being sarcastic? You would think I should be able to tell! Intentio caeca, mala, as in mild paranoia. I'm not familiar with "vebum."

Post 58

Tuesday, September 16, 2008 - 4:15am

Steve,

urQ The argument of "fair" and "reasonable" compensation is interjected into arguments for eminent domain to make it appear that taking someones property from them by force is somehow moral. "See, we offered them more than a fair and reasonable price, but they were irrational so we had to get the police to help us get them out."

The concept of fair, reasonable, and particularly "fair market value" enters into 1000's of freely negotiated real estate negotiations every day. The concept of fair market value was established as a guideline for determining values, and is wholly independent of the individual transaction. It is just a tool. But it is a tool that has been found useful in the open and free market for helping determine a FAIR price for both buyer and seller.

It is, however, predicated on a free market. Perhaps that is the word I should have started out with, substituting "free market value" for "fair market value". The landowners in question are demanding more than twice the free market value.

jt

Post 59

Tuesday, September 16, 2008 - 4:24am