Not really. That's the very ideal of capitalism.
The "very ideal" of capitalism is to provide goods/services that people want to buy at a price that creates profit. Your "good" and "reasonable price" condition, as noted, does not in any way necessarily apply.
So, again, you base your argument on an incomplete and self-serving dfinition.
When blu-ray players and high-definition televisions were coming out, it cost less than a dollar to finance the material-acquisition and production of HDMI-cables (machines did the work), which were necessary to enjoy the true blu-ray experience. However, since the technology was new and because everything associated with them was so expensive, distributors decided to sell them for $100. By your logic, that is a fair business practice.
Supply and demand. Basic capitalism.
I have something you want, and the price of that someting depends on what you are willing to pay to get it; there's no "good" or "reasonable" component at all.
Thus, no issue with it whatsoever.
But intuition, pragmatism, and common sense (the pillars of social ethics in practice) run contrary to the position.
All of these things lead to what I just said:
See above. Supply and demand. No issue.
My definition may be new...and is considered one of several major moral justifications for capitalism; because businesses which are unscroupulous will not be able to maintain their existence, and because of all the other benefits of capitalism, capitalism should be the accepted means of distributing resources throughout the community.
Captialism very certainly should be the accepted means of distribution -- but you're confusing basic tenets with moral arguments; that businesses should not be 'unscroupulous' is a warning against behavior that will bring the demise of the business rather than some moral imperative that the business should act 'fairly'; because 'it is the morally right thing to do'.
But then, you;re still working on showing how the insuirance indiustry is "unscroupulous", as in "not legitimate".
And, none of this chnages the fact that you purposely created your definitions to allow you to reach your conclusion -- that is, you've started with a conclusion and are trying to create facts that fit.
This, alone, not only illustrates that yor position is undsouns, but you recognize it as such.
Insurance companies are not comparable to other capitalist entities...
They provide goods and services at a market price.
How are not not comparable?
...they combine qualities of several relatively good industires where fairness and accountability matter to create a bulls-hit industry...
They provide goods and services at a market price.
How is that a "bull shi'ite industry"?
where people are rarely held accountable and fairness is not a common practice.
"Fairness", in legitimate business, is acting in accordance to the obligations specified in the contract that created the commercial activity in question. if there is a specific instance where this does not happen then there is recourse available to the agrieved party.
So, given that, can you show that, in general, the insurance industry is "unfair" -- especially recognizing that you admit that what they do is legal?
I'm not against profit, but I'm not in favor of it at the expense of others good that are supposed to be present in a capitalist society;
I reference back to your original unsond definition - that there must be some compoent of "good" for business to be legitimate.
...for example, insurance companies can't even provide service for most of their consumers at any one time, which is why during disasters or epidemics they have to be extra-subsidized by the government; that's because their use of premiums makes it impossible to cover their clients.
So... what?
This means the company is over-exposed, under certain circumstaces. This means that the company, under certain circumstances, may not be able to meet all of its obligations, as its policies are based on a certain set of specific actuarial assumptions. There's -always- a chance that circumstanes will fall outside six sigmas, but that a company will be in trouble if it does in any was illsutrates that it has done anything wrong -- much less that said business is somehow "illegitimate".
But when the prices are unreasonable, the market does not bear them...
No... when the market does not bear the prices, the prices are too high; "reasonable" has no bearing on the issue. YOU may thing $5.99 for a pen is "unreasonable", but if the company is selling them amd making money at it, the market disagrees with you.
...but the price-setters usually can, leading to downturns in which the insurance company is safe (or at least, in a better position than anybody else) and everybody else suffers on their behalf.
Sound slike a good plan, if you can make it work.
You seem to be under the impression that hold the 'supply' can set whatever price they want; that their price is limited to what the market will bear negates this position and all that you build upin it.
Such a system has a high capacity for indulging immoralism and harm to society, which begs the question, why should society accept it?
Simple:
Society wants the goods/services that the business provides.
If it do not, the business fails.
There is, after all, nothing "immoral" in charging someone what they are willing to pay, as both the buyer and th eseller are acting voluintarily in what they believe are their own bests interests.
Anyway, you are wrong; in business ethics that is called price gouging and there are both moral principles and laws which forbid it.
See above.
However, businessmen generally disregard the morals, their interest groups can pass bad laws, and their lawyers can find loopholes in said laws.
Evryone acts in their own best interest, as is human nature. It all falls back to the the fact that companies cannot charge more than what the market will bear.
Not just businesses I don't like; businesses I hate can be legitimate. I hate the industrialized food industry, but it is at least mostly legitimate, or at least, legitimate enough to left it pass by.
Your definition of "legitimate", as noted before, is self-serving and unsound.
Businesses that occupy a market niche which makes them unaccountable (to the point that even taxpayer money can become yet another source of income in exchange for failure) are by their nature illegitimate; something unaccoutable can never be legitimate, no more than an absolute monarch or tyrant who is subect to no one can be legimate; unaccountability creates illegitimacy.
I see that by this addition to your original definition, you agree the original definiton was weak.
But anyway...
Unaccountable to whom?
What business is unsccoutable?
How can it -be- unaccountable?
Whether or not I like or dislike insurnace does not relate to its legitimacy; it is illegitimate by its own existence. I could be a beneficiary (and love) the insurance industry as it is, and its illegitimacy would not change; the only thing that would change is me, in that I would be a crappier person.
Your definition of "legitimate", as noted before, is self-serving and unsound.
That something is a choice always confers a certain amount of freedom to it...
Thereby negating your complaint. No one is forced to buy anything, they do so voluntarily.
The guy who just ignored the prohibition on price gouging and every other business ethic and law is correct, the guy who is going along with what everybody (including the thinkers who developed capitalist theory) said should be the case is wrong.
Non-sequitur.