> I'm all for capitalism and making money, but this is just wrong.

I think this a problem that people have - they (somehow) equate corruption/taking advantage of people/kickbacks with "capitalism". This is not the case - I've spent some a bit of time in more socialist and communist countries, and these things seem to happen even more there. People trying to take advantage of others happens regardless of economic or political systems.

The premise of capitalism (especially capitalism as moral philosophy) is that if two parties come together & a transaction occurs, both walk away better off. Otherwise the transaction would not occur. Therefore, it cannot be considered immoral.

Protection against corruption/taking advantage is built in. Don't like it? Don't buy it.

I hope I am not being voted up because people think I'm saying nothing morally problematic is going on. I meant to offer support to the grandparent comment.

There is such a thing as an immoral yet free transaction.

Sort of agree with you - actually, I completely agree with you, just I was originally making a slightly different point.

The point was that this interaction wasn't a feature of "capitalism" - it wasn't a free and honest exchange. The seller here was pretty clearly trying to deceive and cheat people. This happens under all sorts of economic and political systems.

But here's some examples - it wasn't just selling something for more than the market rate. The seller is clearly trying to deceive/misinformative/cheat people. If you look in depth at the screenshots, it wasn't "borderline", it was pretty egregious:

The URLs and advertisements all list free download and don't make it clear that they're not officially with Firefox.

They change and mix up the pricing right next to each other, it's designed to look confusing:

"Get 3 years... only £9.98 per year"

"Get 2 years... only £0.99 per month"

Then there's this doozy:

"Signup now and join the millions of users that download files on the internet"

The order page (second to last image) says on the header, "Download FireFox 3.5 Instantly!" without explaining that the 76 pounds they're charging isn't for Firefox, it's for some membership support something-or-other.

It's like when people put ads for fake things on Craigslist. This particular instance probably isn't criminal, but it's really toeing the line on fraud - I'm pretty sure if anyone was refused their money back and went to small claims, they'd get their money back plus damages.

But again, this isn't a "capitalism" thing. Under theocracy, churches used to take money to help get your dead relatives into heaven faster. People pay large money in Africa and Eastern Europe to be smuggled across borders. Lots of bribery necessary to get things done in corrupt countries, or to have a shot to get into a Communist/Central run business or education system, where it becomes all about who you know instead of the more objective free enterprise exchanges.

Is what's going on here bad? Yes, definitely. Is it "capitalism"? Oh hell no. It's corruption and fraud. Humans sometimes try to cheat each other, again regardless of the economic and political system in place.

I think this is a feature (or bug) of capitalism. Capitalism (or socialism for that matter) is a hard to use term. No one agrees on its real meaning. Free is definitely a premise. Honest, I'm not sure. I think many free marketers argue that honesty is one of the emergent qualities of markets.

There is a capitalist core though. I think that core says that the non-market system (governments, societies, etc.) need to make sure that things are free. Emergent order will take care of the rest. Incentives & feedbacks will make sure (via the mechanism described above) that transactions are profitable for all parties, that they are safe & that they are otherwise ethical. Honesty is usually included in this.

Again, when I say 'usually included,' it's hard to nail down what I mean. Most people have obviously never considered this particular aspect. They use think in more general terms. But the Capitalism-as-philosophy guys (Libertarians in the US, Austrian-schoolers or Liberals some other places), would consider honesty as something that emerges, part of capitalism.

Of course the slight problem is that the underlying axioms of capitalism/free marketism is that the only possible consumer is God, as you need to have perfect information about the entire universe so that you can make the correct transactions. When your economic system is based on the idea that omniscience is required of everyone taking part, it is impossible to make statements about how fool proof the system is.

I don't think this is an axiom of capitalism.

It might be an axiom of some models of capitalism. It would be very hard for an analyst to reason about a transaction if you were required to take imperfect information into account.

Interestingly, in a different model you might factor in the cost of obtaining information about the transaction; and still determine that it was more efficient for you to pay £75 than find the free Firefox.

You would still be rational. Just very rich, or perhaps extremely lazy. But you are not required to be omniscient in that model, only able to estimate the cost of obtaining the information.

http://en.wikipedia.org/wiki/Perfect_information

Capitalism flat-out can't function without a reasonably clear, consistent and fair application of the rule of law (a painfully and repeatedly demonstrated fact that neoliberal and libertarian fundamentalists tend to forget).

What does this swing at libertarians have to do with anything else in this thread? No law has been broken, so how would the absence of the rule of law change anything in this case?

Convincing stupid people to make bad deals is immoral but not punishable by law, else most CEO's of banks and phone-companies would be behind bars. And forbidding unequal deals would be the same as forbidding profits.

Also, capitalism without 'a reasonably clear, consistent and fair application of the rule of law', would mean no taxes, no regulations, no law enforcement - just private property and free trade, yes? I too think that there would be a lot of problems with that, especially resolving contract disputes and cases of fraud without resorting to violence.

That said, how and where has that "fact" you present been "painfully and repeatedly demonstrated"?

FTR, I'm not libertarian, but seeing them called fundamentalists with an unsubstantiated argument, in an unrelated thread, annoyed me.

The law unfortunately is our best effort at drawing a clear line (i said, "best effort") between acceptable and unacceptable behaviour. I'm not sure there is any hypothetical legal system that could eliminate every one of these scam businesses. And I'm not sure there's a hypothetical education system that can prepare those who would be fools, enough to put the scammers out of business.

And I would be scared of a business ethics committee deciding which companies are allowed to run. It would be worse than the App Store.

This leads to the fundamental weakness of how governments are perceived of course - even if you make a really great law it has to be a "clear line", so it can't be complicated enough to cover every possibility - which means there will always be some wiggle room for some to take advantage of, and some will be hit by the law that shouldn't be.

As the media deals in anecdotes, even if you really minimise the amount of people in either of these categories by an exceptionally well crafted law, it is still easy for them to generate stories that make the law look too weak, or too draconian (depending on the political preference of the journalist/news organisation) by trotting out whichever handful of cases they dredge up that supports their views.

couldn't agree more . . . just because something exists in a market doesn't mean it should. Capitalism is a system/strategy, how you apply that depends on your values (or what you value).