Profitting versus Profiteering

I have been intrigued by the thin line of distinction between Profitting and Profiteering, especially in this era of Capitalism vs Communism.

Below id the definition of PROFITEERING per the Oxford Pcoket dictionary.


The Oxford Pocket Dictionary of Current English Date: 2008
prof·it·eer / ˌpräfəˈti(ə)r/ • v. [intr.] make or seek to make an excessive or unfair profit, esp. illegally or in a black market: [as n.] (profiteering) the profiteering of tabloid journalists. • n. a person who profiteers: a war profiteer.

We all know the meaning of profit, generally - Sale price less Costs; in other words, a small price for one's "value-add".

The phrases/ words int eh above defintion of Profiteering that really bother me are - Excessive or Unfair Profit. When and how does one really define what is excessive or unfair? And what is the yardstick for Fair Profit?

We also know that generally, in times of shortage or during emergencies, profiteering happens- sellers jack up the price beyond "reasonable" or "normal" limits, and still find buyers comfortably. In other words Profiteering happens when the "normal" demand-supply equillibrium is affected. And usually, Profiteering levels return to Profit levels, once the "demand supply" equation becomes functional again - either demand wanes, or suppply increases, or both.

But this still does not answer my question -what is normal and excesssive? Is it 5%, as in selling PCs? Or 10% , as in many "normal' businesses or 50% or more for "value added products and Sservices" like arms sale, Software sales or "massage Services" ? Mind you, many of these so-called value-added products and services are priced based on Value - more specifically, perceived value. As an extreme example, if tomorrow people decide not to buy diamonds any more, the same $10,000 diamond ring may end up not being worth even $10- " $10 for a peice of tetrahedral carbon?" could be the refrain...

Who then decides what is 'reasonable' profit, and who declares 'profiteering'?

Can someone enlighten me?