National governments should create an import pricing court which would be responsible for overseeing all of the nation’s imports and adjusting upwards, when necessary, the prices of any imported goods or services which it judges to be unfairly low. The goal is to ‘adjust’ the price of such imports up to the minimum point at which their ‘true’ costs of production (including transportation) are reflected in the prices importers are required to pay for them. Such an import pricing court would help insure against domestic producers (as well as other foreign producers) from being unfairly under-priced by foreign producers which may not adhere to similar fundamental principles concerning the internalization of all reasonable and practical costs of production.

Under no circumstances should this court ever even consider the relative prices between domestically produced goods and services and imported goods and services. The only consideration of this court should be whether the imported prices are fair as determined by the producer’s adherence to fundamental principles concerning the internalization of all reasonable and practical costs of production.

At their point of entry into the country, imported goods and services should be assessed rectifying charges and punitive penalties if it has been decided by the court that they are produced using forced or inhumane labor, significant environmental damage, direct or indirect subsidies, exceedingly unsafe working conditions, or if producers have used methods which violate widely accepted moral standards used by the rest of the world, etc. There would be no limit on the amount of punitive penalties which can be levied and governments can use this tool to encourage foreign producers to improve certain elements related to their means of production in order to help improve the social or environmental health or wellbeing within that foreign country. Further punitive penalties could also be imposed due to lack of cooperation from exporting countries during investigations into unfair pricing complaints. Punitive penalties could be enforced even on products already in the transportation pipeline if the exporter made significant changes to the relevant methods of production before the ruling was handed down. Rulings cannot be enforced against newer products produced in a way the court deems acceptable.

After the import pricing court investigates unfair pricing complaints brought to its attention, it would issue a ruling which would take effect immediately. If the exporter is found guilty of unfair pricing, the court may issue a ruling imposing some rectifying charges as well as some additional penalties. These costs would be required to be collected on all imported goods and services which have not yet been processed through its ports of entry at the time of the ruling. (The importer would be required to pay these additional costs if they wish to take delivery of the goods.) At the same time, the import pricing court would notify the exporter with reference to the details of each of the charges and penalties assessed to its products and what they would need to do in order to get each charge and penalty eliminated.

Naturally, the national government of the importing country would collect all of these fees and penalties. However, the exporting country could assess the equivalent amount of fees (in the form of an export tax) to its exports destined for the importing country and affected by the rulings of the importing country’s import pricing court. If the exporting country chooses to do this, the result would naturally be that the prices of the imported goods would be at the point where their ‘true’ costs of production are reflected in the price (although, of course, this approach would not be the ideal solution). Thus, the importing country would not have any right to collect any rectifying charges though they would still have the right to collect any additional punitive penalties. However, the exporting country could also include these punitive penalties as part of their export taxes. The importing country would then have no reason to collect these same fees since the penalties would have been self imposed.

Nevertheless, the importing country will always have the right to be compensated (plus 10%) for all investigative, legal and processing costs, etc., associated with any rulings found against it. This amount could be collected by charging it onto either the future imports of the same or similar goods on which the import pricing court ruled, onto the same category of items imported from that country, or it could be spread out among all imports imported from the same country. For example, if an investigation into a complaint cost a total of $1,000,000, then $1,100,000 should be divided either among all future imports of that product, similar products, or divided equally among all imports from that country. It should be divided such that somewhere between a quarter to a third of these investigative charges are recouped per year, but these repayment formulas could vary greatly based on the qualitative and quantitative aspects of each market.

The following is how an import pricing court could affect the cost of an unfairly priced imported item. Let’s say country A is selling a product for $1, but country B, through its product pricing court, says that the product’s ‘true’ cost should be $1.50. Country B then states that country A is selling its product for 67% (2/3rd) as much as it should cost in a fair market, and imposes a rectifying charge on imports for the remaining 33% in order to bring the product’s price in country B’s domestic market to a level that is considered fair (meaning that it is not unfairly harming other foreign and/or domestic competitors). In addition, let’s say that country A is found to have used bonded labor and that it has also stifled country B’s access to several relevant records in its efforts to determine whether other unfair practices were used in country A during the production of the products in question. Due to these findings, country B could impose an additional punitive penalty of 50% of the product’s ‘true’ cost (75 cents per item), bringing the imported product’s cost to $2.25. This punitive penalty would serve as further punishment and encouragement to the exporter to discontinue these unfair and unjust production practices.

Only very rarely should a product be banned from import. If the rectifying charges and punitive penalties are high enough, the product will be effectively banned from import anyway. If the exporting country imposes export tariffs on the penalized products, and the situation is still not on a sufficient course toward resolution, then either a ban or additional penalties could be imposed.

Such a system as described here would encourage fairer trade around the world. Of course, the threat of retaliation does exist, but these can be minimized by making such an import pricing court a supranational court instead of merely a national court.

In sum, the unfair selling price of the products (original price set by the exporter), plus the rectifying charge, plus the punitive penalty, plus the investigative and court fees would raise the price of the imported product past its fair competitive price, thereby economically encouraging its manufacturer to adopt safer and fairer production practices without completely or entirely closing off our domestic market to the imported products while at the same time protecting domestic manufacturers from losing sales due to unfair pricing practices.

This product pricing court system could also have national branches that could also settle unfair pricing complaints levied against domestic producers of goods and services. A supranational court should not hear cases where both the plaintiff and the defendants are located in the same country.

It is the government’s responsibility to create an economic environment where markets operate with a natural stability, automatically tending to balance fundamental supply and demand forces even when significant interferences or other destabilizing events occur. Given an economic climate structured in such an ideal way, disruptions which exceed the natural stabilizing abilities of the market are bound to occur from time to time, and when they do, temporary price controls can be a very useful tool. But price controls should be used only as a short-term patch to get the markets safely through the emergency. The use of price controls should trigger an immediate review of relevant market rules and regulations to determine if any need to be revised or debugged to prevent similar kinds of emergencies from happening again.

Price Controls

Therefore, as a rule, price controls (such as rent control, electricity price controls, etc.) should not exist. The only exceptions should be during times when markets shows sure signs of excessive instability causing rapid and extreme price fluctuations or which take prices to levels that cause immediate or impending damage to the economy or which may cause an extraordinary dislocation of significant numbers of people.

Price Gouging

Price controls should be used to enforce a cap on prices so that the price of any single product does not exceed 10 times its average pre-emergency price. For example, during an emergency such as a hurricane, earthquake, etc., a $1 gallon of water or a $10 sheet of plywood cannot exceed $10 and $100, respectively. Violations (i.e., price gouging) would be treated as theft of any amount in excess of this ’10-times’ limit.

Price Fixing

Price fixing should be allowed so long as the combined market share of all the companies, businesses, etc., involved in price fixing does not exceed a certain fraction (1/3rd, for example) in any given political jurisdiction in which price fixing is planned or occurring.

As a rule, the stated prices for most products and services should include all relevant sales tax charges. Naturally such prices cannot be stated on advertisements that are distributed to different political jurisdiction with different tax rates, but it could easily be done with the goods and serviced sold by physical stores.

Furthermore, this principle should be applied as widely as possible. Shipping charges, if they are the same throughout the advertised area, should be included as part of the advertised price of the product. In essence, a customer should not have to add up a whole bunch of other numbers (such as taxes, shipping charges, mandatory fees, etc.) in order to arrive at the ‘true’ price of a product. Though it is naturally impossible to completely achieve this due to differing tax rates and other factors, prices should be as close to ‘true’ as possible. As much as possible, customers should be able to give the seller the amount stated on the price, and be able to walk away with the product.

The receipts would, of course, breakdown exactly what taxes and other charges are included in the final price.

In addition to however else they may want to state them, restaurants, grocery stores and other wholesale and retail food sellers should be required to state the cost of their food items in cost per unit of weight or volume (for example, cents per ounce).  This would greatly simplify the comparison of prices across different products.

This same principle should be applied to virtually every other appropriate consumer good.

No governing authority should be allowed to prevent the implementation of maximum daily trading limits (based on range of price movements for a single day) when requested by either a securities or commodities exchange, or even perhaps when requested by the original sellers of a security, in which case any trading limit would apply to securities of that single company. As a general rule, these trading limits should range between 5-10% of the value of the security or contract. A smaller percentage would trigger limits on trading too often, thus interfering a little too much into the operations of a free market. A larger percentage would tend to defeat the purpose of such a system, allowing too much ‘damage’ into the market before forcing a market-wide pause in trading.

Such a system would operate as follows. Let’s assume that a stock’s closing price is at $100 per share. Assuming that a 10% limit was set for that stock, on the next trading day the price of that stock would be allowed to trade anywhere from between 90-110, without any penalty or restrictions. However, let’s assume that negative news pushes that stock lower so that it hits the 90 level. At that point, the exchanges would prevent trading at any price lower than 90. Trading at or above 90 (up to 110) would be allowed throughout the rest of the trading day without restrictions of any kind. If the stock holds at 90 until the close of trading that day, it would mean that trading for the next day would be allowed only in a range that is + or – 10% of 90, which is from between 81 and 99. For penny stocks trading at $5 or less, perhaps there should be much less restrictive trading limits or no limits at all. Governments should encourage the use of such daily price range limits so that markets will be afforded a certain degree of protection from wildly swinging prices resulting from information which in the end may be seen as untrue or exaggerated. The extra time provided by these limits could be used by traders to further analyze news/information, likely making pricing activity resulting from false news less severe than would otherwise be the case.

Though this would also work to limit moves resulting from beneficial news, the concept of a speed limit placed on price moves would act to moderate a wildly fluctuating market. In the end, prices will reflect the true value of the underlying, but trying to reestablish that equilibrium through the use of moving upper and lower pricing channels is an attempt to tame a market that would otherwise experience greater volatility, generating slippage losses that traders would otherwise be less able to predict.

The ultimate solution to this problem of highly volatile markets and market conditions is not trading restrictions, like the trading limits delineated above, but the dominance of long term traders and market players who know how to react to news, and the creation of a market trading environment that is less amenable to yielding profits on tiny moves of stock prices. For example, the imposition of a standard sales tax on each stock transaction would automatically and significantly reduce the profit potential of day traders and other short-term investors who are the types of traders most often responsible for precipitating drastic price moves which in turn trigger a succession of automated and institutional behavior in the same direction. To encourage trading behavior more in harmony with actual facts, short-term trades, whose traders base their trading decisions purely on price, need to be tempered.

Businesses have the right to cross-subsidize any of their products (whose market shares stand and remain at less that 20% within political jurisdictions no smaller than counties) with revenues from other profitable products (or any other source) without any restrictions if there are at least 4 total suppliers of similar products serving the same county. If there are only 3 total suppliers, a maximum of 30% market share should be allowed before cross-subsidy restrictions are imposed. When 2 total suppliers exist, the critical percentage should be 40% before cross-subsidy restrictions are imposed. The reason for a slightly lower than proportional percentage of the market share is to help restrict subsidized products from achieving a proportional market share (or larger) given that they are clearly not competing within a true free market or on an equal footing with their competitors. No company should be allowed to sell a subsidized product without penalty if their market share is more than the allowable percentages stated under this proposal.

Constructing the Tax

Two statistics should be used to formulate this penalty.

• The first statistic would be the dollar amount to which a company subsidizes the product in question. Thus, a determination regarding the subsidized dollar amount for each product must be made either through the company releasing such information or by having a court decide on an estimated amount of the subsidy. The dollar amount of the subsidy would then constitute the bulk of the penalty.
• The second statistic would be the amount (in percentage points) by which a company exceeds its allowable market share under this proposal. This same percentage figure would be multiplied by the product’s selling price, and the resulting dollar amount would constitute the second portion of this penalty.

The resultant dollar amounts from both statistics obtained above would constitute the total amount of this cross-subsidy penalty.

Example

For example, let’s say that there are 4 companies offering widgets (each one costing $200 to produce) and each company has a proportional market share of 25%. (Remember, a maximum market share of 20% is allowed with 4 suppliers.) One company, however, subsidizes its widgets by 15% ($30, in this example) and has a market share that is 5% above that which is allowed by this proposal. Because of these two factors, this company would be subjected to a cross-subsidy penalty tax of $40. This amount is determined by taking the product’s subsidized amount ($30) and, adding it to 5% (the product’s excessive market share percentage) of the product’s selling price ($10).

Prepayment penalties on loans or other financial liabilities should be prohibited. People should be able to pay back any loan as fast as they want without any restrictions.

Very fat people and people with other unusual physical needs should be charged according to the same rate for products and services as the general population. For example, a fat person requiring the space of two seats on an airplane should be required to purchase two seats to accommodate that person’s needs.

Every unit of rental properties should have individually metered utilities so that all tenants pay only for what they use. The prices for utilities should not be set through some sort of formula or calculation of an average involving more than one unit.

The utility provider should be the entity that is responsible for installing and maintaining all utility meters. Utility providers may charge for initially running the infrastructure to deliver the utility to the property, but once the infrastructure is set, the customer should only be required to pay for the utility actually consumed and damages to equipment other than ‘normal wear and tear’.

The pricing of electricity, water, natural gas, and even telephone rates should more accurately reflect the specific current market conditions of supply and demand, as well as distribution factors, all of which can often change rapidly and affect the true costs of a utility. All these utilities should be priced in as much of a real time manner as possible or practical. Electricity, especially, should be priced not just daily, but hourly, which would be much better. The true costs of water and natural gas do not change anywhere near as fast as it does for electricity, so perhaps daily, weekly, or monthly pricing is sufficiently accurate to reflect market conditions.

To know what the cost of these products are at the moment of consumption, each user should be able to buy a real-time utility consumption pricing gauge showing the real-time price per unit of the product (gallon of water, kilowatt-hour of electricity, thousand BTU of natural gas, etc.) and the cumulative total cost of a customer’s consumption for the indicated time period.

All refunds, rebates, credits, etc., not paid within the stated period (30, 60, 90 days, etc.) should be subjected to an immediate doubling. If they are not paid within twice the stated period, they should be tripled, and if they are not paid within three times the stated period, they should be quadrupled, etc. The payees of such refunds, rebates, credits, etc., should be required to notify the payers if the payees have not received payment after the expiration of the first period. Payers of such funds should be required to use certified delivery methods if they issue payment after the first deadline so that receipt of payment can be confirmed.

Refunds, credits, etc., should not be required to be paid to the customer in the same form in which the customer originally paid. The customer should have a choice on how he would like his refund or credit to be paid (whether cash, credit, check, etc.).

Model makers (including military model makers) should be required to pay royalties to the makers of the real items on which the models, toys, images, photographs, etc., are based. Royalties should be negotiated on a case by case basis.

Usury should be legal to rates of up to 1000% annually or 100 percentage points above the rate of inflation, whichever rate is higher. Market forces should be solely responsible for determining interest rates except during extreme circumstances. The public should be better educated and an important part of primary education should be personal finances.

Most or all burial plots should be rented. This way large amount of land will not be locked away for incredibly long periods of time. If people want certain deceased individuals to remain buried, they could rent the plot for longer periods of time and could continue to rent indefinitely.

Original buyers of any type of publication(magazine, newspaper, etc.) should be able to resell their publications at any time they wish and at any price they would like, either below or above the publication’s original sale price, to any person that is willing to purchase it. The natural drawbacks are that such publications would be more out-of-date and their physical conditions may be worse than if they were purchased directly from the publisher. Nevertheless, authorizing such a secondary market for publications would potentially make for a greater use of each published unit (creating an environmental benefit), as well as create new job opportunities.