Wednesday, August 19, 2009

Greed is Good?!

Well, not so much "Greed is good" as "greed can be manipulated" or "the greed of others sates the greed of your own".

It's the basis of all capitalistic deals, really---I have something of moderate value to me and higher value to you (say, a PS2 with Persona 4?). You have something of a moderate value to yourself (or even zero value) but very high value to me (a full computer game rig!). We being the greedy bastards we are, we trade, and we each walk away rubbing our hands together in a really devious way and saying "sucker."

It's the same once money is introduced, or the items being traded are abstractions like oil futures or soybean insurance. Value is massively relative; $5000 for you might be worth less, much less, than a stake in an oil company, but give it to me and I'm likely to spend it on something I value more, whether college or computer systems. Or, more dramatically, a supermarket candy bar might be worth about a dollar to me, but its worth is near infinite to a hypoglycemic who needs a sugar fix to live.

Taking the last example, there's little reason the supermarket wouldn't charge "near infinite" money to the hypoglycemic for the candy bar, but of course there are always other places to get a candy bar. Gas stations, vending machines, other supermarkets---they all place small enough value on the chocolate, but plenty of value on the hypoglycemic's cash, and they're all competing for the same (limited) set of funds. And while we can imagine (albeit with difficulty) a massive candy bar cartel artifically keeping prices high, the first person to break from the cartel and lower his price is going to get the payment for the candy, so it's to everybody's advantage to lower prices and try to get their greedy white gloves on business.

So where social judges get their charges of "price gouging" and "unfair pricing" is a mystery to me...

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