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Thomas Anderson

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Fixed Pricing would be much better than Supply and Demand

When I was 5-years-old, I wanted to make a dollar. I painted 10 sea-shells, and started selling them for a ten cents each. I then realized that if I sold 20 sea- shells, I could sell them for 5 cents each, and still make my dollar. Then everyone would be happier, and I would still earn my dollar.

The first kid that decided to use supply and demand, and sell his/her shells for 50 cents, cheated everyone.

Fixed Pricing would be much better than Supply and Demand.


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    Dec 31 2011: I'm sorry the choices available to you are not to your liking. I for one am happy with most of my options, although I completely agree with your dislike of monopolies and corruption. The restrictions I dislike in my consumer choices have more to do with government regulation than with free-market pricing.

    What I still fail to see is how fixed pricing will make any of these things you've mentioned better.
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      Dec 31 2011: I think monopolies and corruption are the direct result of greedy people using supply and demand.

      So deep down, it doesn't bother you to live in a throw-away society where there is unequal distribution of resources, 30% of food goes to waste, and people are starving right now, and my blender already fried after just 8 months?

      PS..I love this debate so far...I appreciate the conversation and...someone called me naive! I thought TEDsters were supposed to stay pro..

      PSS. So far, no one has taken my side yet. My daughter is becoming very aware of the Supply and Demand attitude that people have, and it doesn't really set well with her either. Women fighting over clothes in a department store. What a crazy mentality.
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        Dec 31 2011: I'm bothered by many of the same things you are. I just don't see how fixed pricing would alleviate these problems.

        My condolences on the blender. Just recall, however, that consumer product quality under the centrally-controlled Soviet system was notoriously bad, precisely because there was no incentive for manufacturers to make a better product. With fixed prices, the incentive is actually to make worse products that consumers have no choice but to keep re-purchasing. At least in our supply and demand market, you have the option of purchasing a commercial-quality blender that will last you a lifetime.
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          Dec 31 2011: So what do you think are the problems with the airlines? Too much supply or not enough demand, or was price fixing not working?

          I can't afford a blender that will last me a lifetime, and even the 300 dollar model is quite faulty, and many of the people who made the 300 dollar blender worked for really low pay.
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        Jan 1 2012: If you truly believe that the problem is capitalist greed, and that it is practical to provide impeccable services and products at low cost, I offer you a challenge: start your own business, and run it ethically. Pay your workers a wage you consider fair, and charge the customer only as much as it takes to cover basic costs and provide you with a fair income as well.

        If you are correct in what you say, your business will flourish. Consumers will see the true value of your product(s) and employees will flock to work for you. The magic of open markets is that entrepreneurs can set their own prices. If someone's being greedy and charging too much, someone else can compete with lower prices and take away the greedy person's business.

        "So what do you think are the problems with the airlines?"

        Could you be more specific?
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          Jan 1 2012: Hello Sir,

          I completely agree with you about running a business like you proposed. At this time, there are probably 10 businesses running like that. And it works. But alas, what about the greedy media and phone and oil and food businesses?

          I was hoping this debate would get someone from one of those businesses to submit a comment such as "shut up, you are lucky you have us for a business"

          Also, when a society can reach a balance between fixed pricing and S+D, that typically means that the values of that society are changing, and people are more willing to use their time for the benefit of society, rather than to just make a dollar.

          Yes, I wish all companies were like the one you propose!

          The airlines have been moving from regulation, to de-regulation, fixed pricing, competitive pricing,,,like railroads on the Monopoly Board. Their CEO's are raking in the cash, but services have not really improved. (I guess this may be another whole debate, so no worries)

          You got me good with your business proposal. (I appreciate that!)
      • Jan 3 2012: Maybe the blender broke because the mfr was targeting a low price model and wasn't concerned with quality. Much like your seashell hypothesis, there are too many omissions - quality of shell, quality of work, size of shell, rarity of shell, etc. So no, it doesn't bother me that you acquired an inferior product without considering the quality, warranty, etc. if you don't want a throw away society, don't focus on fixed-price, low price, disposable options.
        Why is fixed pricing a better alternative? After all, a supplier will want a guaranteed profit to supply a product at a fixed price. An example of where this fails is government defense bids, which often seek "firm fixed pricing." Suppliers that participate always build into their pricing the uncertainty of their own situation - costs of raw materials, unforeseen regulations, interruption of supply, etc. so the price is artificially inflated.

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