Currency cheats the population out of an equivalent exchange. Aristotle explains this in his book Politics. We see this concept demonstrated in our profit-minded country in the actions that our credit card companies made when handling charitable donations. Credit card companies make millions off of the disasters good hearted people choose to donate their money to. By charging fee after fee, the money that could be going to a starving homeless child in Haiti goes instead to the drooling greedy capitalist behind the credit card companies.
If you really wanted to make the most out of a donation, you would have to give a commodity, rather than an instrument to attain one. By eliminating that middle-man of sorts, the exchange is guaranteed to be legitimate and fair. You don't see companies stealing water bottles from the case you send to aid people in devastated areas, only money.
Aristotle explains that the existence of money creates a cheat. Money creates a distortion in the idea of exchange, otherwise known as the desire for profit. Profit creates an unequal exchange like we see here in the credit card companies profits from the donations.
For every donation the company takes a fee out of it for "transaction costs." As much as 2.5% can be taken out of a donation. Fees accumulated from donations can add up to millions in a year that a disaster occurs. While some companies claim to reduce or remove their fees, others refuse to comment on the matter. But it isn't you, the donor being cheated, it is the massive population you had hoped to help that suffers from this capitalistic characteristic.
For the children in Haiti currently receiving less aid than deserved, it is to the greed of companies and their ever growing hunger for profit that they need to turn their weary little heads to.
Source: http://www.huffingtonpost.com/2010/01/14/as-wallets-open-for-haiti_n_423238.html
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Though I understand how this can sound somewhat scummy to some people at first blush, when you really consider what is going on here, it does not offend me.
ReplyDeleteFirst, a 2.5% surcharge for transactions is not that much. Now, I understand when you are talking $1 million, this fee is effectively $25,000. But the thing is, those credit card companies are paying people, probably more than you would imagine, to perform these tasks. In other words, a good portion of these fees probably aid in paying many employees' salaries.
Second, there IS an exchange going on here. The credit card company is charging the donor 2.5% to help fund charitable donations. I know if I wanted to give money to support relief efforts in Haiti, I would have positively no idea how to go about doing it. For example, if I were to donate $100 to Haiti relief efforts, and $97.50 is what went there for every one hundred I donated, it would be well worth the $2.50 it cost me to do that. There's no doubt in my mind that the time and effort I would expend trying to circumvent the credit card companies and their fees, and figure out how to get money to a place where there is virtually no infrastructure left would cost me well more than that.
I do not know what Aristotle would say about this, mainly because it is hard to say how much profiteering is really occurring here, but it seems to me to be a fair exchange. Also, people can choose not to enter into this exchange if they so choose. That is the beauty about the types of exchanges that exist in the world today, and probably did not exist in Aristotle’s time. We have the luxury of searching out the best exchanges and then entering into those, or even entering into none of them if we so choose.
I think that people who get upset about these types of things, like the person in the article who wants to bring this issue before Congress, would be better off setting up their own funds that charge no fees on charitable donations. This would allow all those people who are outraged about this issue to donate “transaction fee free”. However, as this is obviously a terrible business model, these funds would have no way to sustain themselves, unless more people donated to keep the funds themselves up and running. And then guess what, we are all back where we started. But at least then the realization of what it really costs to move capital from one place to another would put some sort of end to this incessant bitching about unfair fees, and these people could remove their blindfolds and realize that there really is an exchange going on here. One that, in my opinion, most rational people would believe is more than fair.
I'm just going to go with my initial reaction from reading the blog you posted and my thoughts. It's only my opinion and I don't claim what I state is at all correct, just mentioning my thoughts is all.
ReplyDeleteThose fees do seem unfair based on how you specifically look at it, and I look at it this way: it's not bad for a single person, but multiply the amount of money with how many people donated and when you see the size of that number, then I couldn't help but feel people in Haiti totally got cheated. Sure if there was a fee for me to donate I wouldn't look at it horribly because it's just a small fee to pay, but add all these amounts with every other single person donating, I can't help but look at that number and think it's not fair. This can be simply because I do not know who exactly benefits from the fees, or what specifically the fees do concerning the donation. This is where I lack knowledge unfortunately. I believe I read that many of these fees were already beginning to be waived by the companies, with many of the fees that were paid also being directed back to the donations for Haiti. So to me it appears as though they are directly making a profit through the fees and not using these fees for any other reason, which is why it's good that the paid fees are being redirected to the donations.
To profit off a charity makes me think of the Best Buys that put up Heath Ledger signs the same day he died with tables of movies he starred in, just like business to bank on a current event. It seems personally wrong to do such a thing, yet such a way to make profit. It's how you view it a ethical though, and I know I wouldn't create any fee for a donation.
There's my comment decide how useless or interesting it is lol.