I Don’t Think It’s Wrong…

From time to time the issue of whether a given business practice is “wrong” in moral terms will surface, as in the case of hotels raising prices during the Icelandic volcano eruption stranded travelers all over Europe. People who seem to be unclear on the whole “free market” idea will claim that charging as much people are willing to pay for something is wrong, while people who don’t quite grasp the concept of “price gouging” will say that over time markets will always correct themselves – which ignores the fact that in the short run, some people will try to screw as much money as possible out of people who have no choice. Clearly, no one is going to defend the concept of charging people a fortune during a crisis, but what always surprises me is the number of people who seem to think the whole idea of supply and demand is wrong. Especially when it comes to luxury items like expensive coffee…

Consider, for example, the new wave of super-premium coffee houses in New York, which are said to be charging up to $12 for a specialty cup of joe. You can read the Fox News story if you want to, but idea is that these establishments are taking much longer to custom-roast their own beans, producing a one-of-a-kind flavor, which presumably justifies the massive labor costs involved. This is nonsense, of course - the the Dana Street Roasting Company in Mountain View has been doing this for years, and the most expensive coffee on their menu is under $4 – but it’s no worse than some of the other insane coffee fads we’ve seen in recent years. My personal favorite (the story, not the drink – I don’t drink coffee) is still luwak coffee, which is made from coffee beans that have been eaten and then “eliminated” by a weasel-like creature called a luwak, a member of the civet family. Premium civet coffee can cost as much as $250 a pound, although you can get cut-rate versions on Amazon for as little as $50 a pound. But none of this addresses the question of whether this is right or wrong…

Now, I’m not suggesting that anyone should have to conform to my ideas about value; I’m just saying that paying somewhere between two and ten times the normal price for coffee beans that have been eaten and then pooped out by a weasel seems slightly insane to me; so does paying three or four times the usual price for a cup of coffeehouse coffee. But if there are people who can afford to squander money on this stuff, why is it wrong to provide it to them? Granted, these same people could purchase ordinary Starbuck’s coffee products and donate the residual $9 per cup to charity, but short of that, it’s hard to see how this product is hurting anyone. On the contrary; the sales should make it possible for the coffeehouse owners to afford their rent, pay their personnel, invest money in new furnishings and equipment when needed, and pay for their other operating expenses, thus creating jobs, generating tax revenue, and boosting the local economy. Which doesn’t change the fact that you probably had the same reaction to $12 coffee that I had…

In the movie “Loose Cannons” actor Dan Ackroyd’s character, speaking of another off-beat lifestyle choice, tells his partner (played by Gene Hackman) “I don’t think it’s wrong; I think it’s stupid!” I could the same about civet coffee and many other super-premium consumer products that make no sense in my world; and I’m sure all of you reading this (assuming that anyone reads this) could easily say the same about many additional products, services and experiences. It’s just important to remember that we may not always be speaking of the same things when we do this…