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PRICE GOUGING

When demand far outstrips supply, or when someone obtains a monopoly over goods that the public needs or wants, or when tragedies strike and people are forced to obtain certain goods and services to survive - in all of these circumstances greed takes over and the prices for these items are suddenly overly inflated. The Talmud calls this phenomenon hafkaat shearim - the "removal" of ordinary fair pricing by overcharging for the items in need. Needless to say, the Talmud regards this as an unfair business practice.

A number of news reports over the past month have brought this issue to mind. In the aftermath of Hurricane Katrina, there were numerous instances of unconscionable price gouging in the Gulf states in the USA for all imaginable items ranging from gasoline to water. The legal authorities have promised to bring the price gougers to justice but it is increasingly unlikely that they will be able to get to all of them. Making profit over another human being's suffering or desperate need is an ancient vice of humankind. Only a moral conscience can seemingly counteract this built-in venality that afflicts many in times of shortages and need.

In an article that recently appeared in the Jerusalem Post, a particular type of holy Jewish price gouging was reported. It seems that only one dealer was able to obtain lulavim - the palm fronds that Jews require for Succot - from Egypt this year. This dealer, according to the article in the newspaper, having cornered the market, intends to charge up to five times the normal price for a lulav. I do not know whether this actually happened, although the temptation to do so is certainly a strong one. Jews go to great lengths to obtain the proper species to fulfill the mitzva of arba minim on Succot. Usually the etrog/citron is the most expensive of the four required species, but if the threat of the lulav price gouging had come to pass, the lulav/palm frond, usually relatively inexpensive, would now come to rival the price of the etrog. Taking unfair monetary advantage of Jews who are attempting to observe a mitzva was especially condemned by the rabbis of the Talmud. The rabbis likened the practice to charging usurious interest and as a violation of the Torah principle that "your brother shall be enabled to live with you on equal terms." The Torah envisions a fair, equal and level playing field in a just society's economic functions. Price gouging is a clear violation of this basic rule of the Torah.

Talmud Yerushalmi states that those who are mafkiei shearim - price gougers - are subject to particular Divine wrath and being eventually "broken" by God. The halacha does provide for the recovery of actual costs and a reasonable profit (usually estimated to be no more than a sixth, but sometimes can be as much as a half on certain "luxury" items) by the seller. Thus, if and when the seller's costs rise he may legitimately pass that increase on to the consumer. The Torah also allows for price fluctuations due to market conditions and real shortages. But if the seller's new higher price is based on his artificially created monopoly and his control of the supply, then that price charged to the consumer is considered to be excessive and a clear violation of Torah law. The rabbis even hesitated to proclaim extra fast days (because of drought or disease or other dangers) because of the danger of price gouging immediately after the fast on food items. When the fish mongers raised the price of fish before Shabat or Yom Tov, the rabbis decreed that people should abstain from purchasing fish for Shabat and Yom Tov unless the price returned to normal levels. The Mishna relates to us that once in Temple times, the sellers of doves necessary for certain sacrifices raised their prices inordinately. The rabbis threatened to free the people through an ingenious halachic procedure from having to bring doves at all for the sacrifice. The price of doves immediately returned to its normal levels. In our time, in many communities, the rabbis have decreed a price ceiling on what can be spent to purchase an etrog. In many instances, entering a "partnership" to purchase the arba minim thus reducing demand is encouraged. I doubt therefore that the threat of the lulav price gouging will have actually materialized. (This column is being written before Succot.) Nevertheless, the threat of price gouging, especially in items necessary for the performance of mitzvot, should be roundly condemned. Price gouging is a clear violation of the basic Jewish Torah value that "its paths are the ways of pleasantness."

Shabat Shalom.
Gmar tov.
Chag sameach.

Berel Wein