Profiteering During Ramadan

Profiteering

What a sham! Profiteering during Ramadan. You don’t say! Those who believe an owner of goods shouldn’t have a right to sell the goods he owns, for whatever price he deems fit, are demanding that his goods be given to them cheaper. No body is being forced to buy any goods if they don’t want to. It’s afterall voluntary you know!

In the absence of sufficient quantity available in the market, the prices under pressure from higher demand start to rise. These price increases act as a signal in the market to let everyone know which goods are dear and which not so.  This guides the people into buying substitute goods if they don’t want to pay higher prices. If you don’t like such high prices, don’t blame the profiteer, simply go buy something else and you’ve taken the power out of the hands of the profiteer.

Why are goods so expensive in the first place? It’s our beloved government that is the culprit by enacting restrictions and tariffs on all goods comings from abroad. The provincial governments are known to put restrictions on inter-provincial transfers. Removing these restrictions would be an easy way to stabilize prices and increase quality.

Even in developed countries prices go up during special occasions. Government can restrict price but there’s a cost to it. If there’s a price ceiling placed it will ensure that the good is not bought in the open market and then there are shortages. Wherever there are shortages just check any government intervention and more likely than not it will be found.

Those who want prices fixed don’t have any respect for property rights or any idea of how serious Islam is about respecting property rights. Islam encourages people to be generous but doesn’t force people to charge lower. There is a hadith where people complained to the prophet (PBUH) that a merchant was charging too much. His reply was that prices are set by Allah. In effect in Islam there is no provision to control the prices. From what I recall the greatest prophet of Islam himself was a merchant and took goods to different lands and sell them at a profit! Oh my, oh my! Were those paying higher prices getting duped? Did they not voluntarily pay those prices? Or could it be that Islam does encourage merchants and businesses to engage in businesses that bring profits. Why would any merchant or business owner ever do business unless the business made a profit? It seems Islam has no problem with being profitable.

All this attempt to control is due to socialist habits, that empower the politicians, to give privileged status to a select few. It’s the profiteer who hordes the good in the first place to release it when the demand is greatest. Imagine if the profiteer had not saved the extra goods, what would have happened? There wouldn’t be as many goods available to use even at higher prices. When all others are oblivious, it’s the profiteer who uses his resources to locate the desired goods. It’s the profiteer that accumulates these goods, and incurs the expense of storing them. It’s the profiteer that’s taking the risk that the demand of the good might drop, rendering his hoarding unprofitable, and inflicting financial losses. No one else is prevented from following in the footsteps of the profiteer. You can choose to do it too.

Diverse fruits

Abundance of fruits

Now imagine you are the smart one and you did buy early in anticipation of rising prices. You payed for the transportation costs, and the storage costs. You had the courage to restrict your spending and consuming to save and buy the goods. And now after all this work, this planning, this logistical nightmare, the police shows up, claiming you’re a profiteer, a hoarder, a pest, who lives off of other’ people’s misery. What would you think? What would you do? Would you think, how awesome! How good of the police to be so considerate. Do you feel excited now that you’ll be able to help so many by selling goods for cheaper? Will this encourage you to ever attempt this risky endeavor again? I bet you’ll wash your hands off of this entire business and let the people be. I am sure a lot of others will do the same thing. This is of course assuming you’re not going to bribe the police to prevent massive losses.

Now even the police gets corrupted and the people get goods. In the absence of that corrupt police you might not even attempt the ordeal again. What do you think will happen to the prices if all profiteers stopped gathering goods when they are cheaper to sell them later when prices are higher? Will the prices dramatically fall because now there are no profiteers, or will there be a serious development of shortages as now the profiteers don’t have any goods to bring to the market? Is it now clear how this whole scheme of punishing the profiteers in reality ending up hurting the very people this scheme is supposed to protect?

What actually is going on here. The public ends up with less goods and higher prices due to restrictions. The police ends up becoming corrupt, and we are left worse off just because people ganged up to stop a profiteer from profiting! Isn’t it true that these profiteers are providing a service by making the goods available that otherwise may not be available? Aren’t these the entrepreneurs that take the risk of gathering all the goods for a time when we need them most? Aren’t these the true stabilizers of price, as the buying happens on lower prices while the selling happens on higher prices? Their buying lifts the price, and their selling depresses it. And all this time we have been cursing these benefactors!

 

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