It's not just the Fed and actual money printing, anytime there is money lending there is effectively a defacto increase in the money supply.
Correct - I just used the Fed as an example.
Further a small amount of inflation encourages investment.
It definitely does - but is it good?
Normally, a businessman would invest because he sees that people are creating a lot of wealth by their productivity/newly discovered natural resource/etc. The businessman will see the general amount of wealth people have and make a decision.
But if that signal is distorted because the money supply is higher than the actual wealth produced by people, then he will make an investment where he shouldn't have. This is how statements like your's above are justified. But this is a big problem. The businessman, after he makes his investment, soon finds out that there isn't the amount of wealth he thought there was - there is only more currency floating around and the prices have risen accordingly. Now his investment does not produce the return he was expecting. Soon there is a glut of inventory, consumer demand goes down and the economy is in a recession.
This is exactly what is happening now. Inflation was created by Greenspan to help investment. All that malinvestment in housing is what is coming back to bite the economy now.
Ask yourself this question - if inflation can help investment, why not inflate a lot and inflate all the time. Wouldn't that help growth all the time? Tricking people into thinking times are good is not a smart way to grow. Unfortunately, the proposed remedy is worse than the illness.
We already have that. There are virtual currencies and other exchangable notes for goods & services - linden dollars, QQ, airline miles, gift cards, etc.
They are not competing currencies because one cannot demand to be paid in those currencies. By law, you have to accept the Fed note as a legal payment.
There will be no problem with fiat money if the new money created is exactly equal to new wealth created - if the country as a whole produces 10 more widgets this year, then the Fed should create 10 new dollars. No inflation, no deflation.
The problem with the Fed and fiat money is that they consistently create more new money than the new value/products/services created. And this is by design due to the political process.
A gold standard on the other hand will not produce enough new dollars to cover the amount of wealth created. The amount of gold mined annually is a tiny fraction of the new wealth created.
The standard answer (mostly from supporters of Ron Paul and in mises.org) is "the value of gold will increase to account for the new value created". That is true. But that means that everyone who holds gold gets a share of the new wealth created even if they did not contribute.
What is needed is a free market in currencies - people will come up with solutions that are varied and that serve different purposes.
You had to bring economic logic and facts into the discussion, didn't you?
"..... prices in a competitive market are based on the consumer's willingness to pay, and nothing else....."
"...in a monopoly situation, where the seller is able to "set" prices..."
and
"....a price that is determined as consumers make decisions between countless sources...."
Even in a 'monopoly situation', the consumer has choices. If Sirius and XM merge, the consumer still has choices between that and FM, AM, CDs, iPod, etc. Similarly, the consumer had a choice between paying the high railway prices vs. the steamboats, horse carriages, etc. The consumer makes a final choice that makes him better off economically.
While I do agree that prices are higher if there is only one supplier vs. two, it does not mean that the producer is able to 'set prices'.
However, charge for the Windows binaries/installer. Most Windows users will pay $20 rather than have to figure out how to compile it. If they do compile it anyway then their time is worth less than $20 so they could not have afforded it anyway.
But won't someone just compile it and then give the.EXE for free?
Some people might still buy it from him since it is the 'official EXE', but many of them would just get the free EXE.
There are still quite a few businesses that exist to benefit others. OLPC is not about making a profit... it's a non-profit organization!
Any business whose products are bought by customers voluntarily, by definition, is benefiting others (otherwise, why would customers buy the product), even though the business did not set out to 'benefit others'.
But as long as these 3rd world nations do not grow intellectually, they will remain the starving, dependent children of world.
Correct. As someone from a 'third world' country, this is why I've always opposed handouts.
Although I agree with the broad idea of 'teaching a man to fish', I think the OLPC is a ridiculous idea (at least for India) and will fail. I've been in the classrooms they are targeting and what they need are motivated teachers, not books or computers. These schools do more to educate Indian children than any other project. And they make a profit at it!
Who gets to decide who the 'industry' is? The big companies love this scenario (not necessarily in this instance, but generally): the govt decides that a blessed few are the 'industry' and keeps every small producer out by regulation.
There is no way India is an 'extensive surveillance society' - not because the Indian govts care about privacy, but because there is no system in place that can be used to abuse privacy.
No SSNs, no tax ids (for 99% of the people), no centralized health records (other than what the patient saves in her -paper- file), no technology or competence in govt to systematically tap phones, no institutions to come up with broad agendas to spy on people, etc.
In short, Indians have a lot of privacy precisely because the govt does not care about privacy.
The right of the creator to control their creation is -- correctly -- understood as a human right. There is no (or there should be no) distinction between tangible, material property and the non-tangible intellectual kind.
You are absolutely correct. But the "right of the creator to control their creation" does not mean that "the creator is allowed to infringe on my right to create". I think that is what is overlooked by many who blindly support all forms of intellectual property.
I'm not talking about music in particular, but about the general idea of "I did ABC first, now you cannot do ABC (and a thousand things related to it)". This goes beyond your right as a creator and actually takes away my freedom to create.
I happen to think that intellectual property can be controlled by private parties via contract law without the need for government enforcement.
The difference between gold and fiat money is that gold plays two roles -
1. It represents wealth (i.e., what paper money does now) and
2. It is wealth by itself (jewelry, industrial uses, etc).
(2) is what the OP was thinking about when he said that (to summarise) 'there isn't enough gold to represent the economy of the US' - he was not thinking about (1). Fiat money only has (1). It has not value by itself (other than its use as paper).
There is nothing wrong with using paper money - arguably it is more efficient. The problem is counterfeiting - paper money is easy to counterfeit. I am not talking about 'criminals' using printing presses to print paper that looks like a dollar bill. I'm talking about governments printing more paper money than there is wealth.
Gold is harder to counterfeit and hence keeps everyone honest. As Greenspan said, the Fed's job, in theory, is to, as much as possible, replicate the stabilizing role gold played in earlier economies. That rarely happens - witness the clamouring for lower interest rates (i.e., printing more money) to bailout bankers and people who bought million dollar homes on $20,000 salaries.
IMO, there should be a free market in currencies - let many people attempt to solve this and someone will come up with a better solution. Of course, that means the bankers cannot pick people's pockets through inflation anymore and politicians cannot spend like drunken sailors to get votes, but I'm sure they'll find something else to do.
Consider this: the current amount of U.S. currency in circulation is $783 billion. Current estimates put the US's gold reserves at around $252 billion. So where does the extra $531 billion come from? The government buying massive amounts of gold; about $531 billion.
Or the price of gold will increase from $252 billion to $783 billion.
Don't know why otherwise intelligent people don't get this simple fact. Whether you use paper money or gold or diamonds or cigarettes or whatever, they can only stand-for or represent or reflect the true wealth in the economy. They are not wealth by themselves.
Not that I support the gold standard, but I think currency (and the value of currency) should be set by market forces and not by some unaccountable bureaucrats who create inflation while also pretending to 'fight' it.
Not that I'm complaining - I made (and continue to make) a lot of money courtesy of helicopter Ben and his clueless pals.
And they send you goods equivalent to the 'money' you send them (actually, they send you goods that are worth more than the money you send them due to their currency adjustments).
I think your point was that they are getting wealthy from trading with you. That is true. And you are getting richer by trading with them. Trade is not zero sum.
Well, we were dealing with very simple scenarios leaving out all the other complexities.
It is impossible to create a model which will take into account all the factors and give you an answer for various tariffs. For such model to be created, you'll have to take into account new technologies, weather (for products like beer), foreign politics, consumer taste (tariff on light beer vs tariff on reg. beer), new manufacturing technologies (for the product in question and related products) in addition to the industry size, consumption, employment, etc.
If you accept my previous statement, it raises this question: if it is so hard to model something and predict the effects, on what basis do people impose tariffs (or any other govt policy)?
Well, perhaps, but it might also mean that the US manufacturer is forced to sell much cheaper than he would otherwise have preferred to - even to the extent of selling at a loss just to keep stocks moving.
And how long can he do sell at a loss? If he sells at a lower profit, he will not be able to invest and his product quality will suffer. This surely punishes the manufacturer and his country, but the consumer still pays the same price for an inferior product. Of course, this is a simplistic view, but so is your original point. Reality will include bribes, lobbyists, etc.
It's not a perfect tool by any means, but taking realpolitik into account it's really the only way to punish another nation for violating their trade agreements with you. You're taking a small hit yourself, but the manufacturers in the target nation probably feel the pain more than you do.
The hit to the manufacturer depends on how big of a market you are; the hit to your people depends on how expensive the alternatives are.
Either way, it is a bit like cutting your nose to spite your face.
Chapter 7 in this PDF explains it much more clearly than I can.
The money raised by the tariffs will go to the government's treasury, which means other taxes could be lowered. You aren't denying access to cheap goods, you change relative prices.
Which makes it a redistribution - take from Consumer A, pay Industry B which reduces prices and Consumer C enjoys lower prices.
It is important to see that this works only as long as A is willing to put up with it. As soon as A stops buying the product (or perhaps takes advantage of B's low prices), the govt loses the income from the tariff. The govt now has to restore the tax on B which of course fights it tooth and nail - lost jobs, lobbyists, etc. So the govt raises taxes somewhere else and continues the privilege for B.
The consumers, of course, lose.
In this hypothetical example, Belgians would pay higher prices for beer imported from the US, but at the same time they could pay lower prices for beer made in Belgium. People working for American breweries would lose their jobs, and Belgian breweries would hire more people.
So the Belgian govt takes money from the consumers (in the form of tariff) and gives it to Belgian brewers (in the form of tax concessions) - am I understanding you correctly? Otherwise I do not see how Belgian beer would cost less.
And your claim is that Belgian brewers would hire more people because of the lower tax they have pay and the higher sales they enjoy as a consequence.
Seems win-win doesn't it? Until you realize that the money these brewers get from the govt had to have come from the pockets of consumers. Money that these consumers could've invested or spent on something else thereby creating employment for others.
So, whatever additional employment created by the brewers can only come at the expense of workers somewhere else. The increase in employment at the brewery is seen, the lost jobs due to the tax is unseen. Frederic Bastiat wrote about this 200 years ago.
That is, Belgium might demand a 50% additional tariff on foodstuffs imported from the US
So the Belgians who currently pay $100 for a product from the US will pay $150 after the tariff or pay $110 to buy the product from Australia or pay $125 to make it in Belgium itself. Yeah that'll show them!!
I've never understood the logic of imposing tariffs to punish the other country - you are only punishing your own citizens by denying them access to cheap goods. It does benefit special interests at home though.
government limit regulation only to account for externalities ( pollution, healthcare, education etc... )
Excuse me, but how are healthcare and education externalities? Externalities are costs or benefits arising from an economic activity that affect somebody other than the people engaged in the economic activity. I do not see how a person's healthcare or his education is an externality.
while simultaneously ensuring that you don't get coercive monopolies.
There cannot be a coercive monopoly in a free market. By definition, one party cannot coerce another into trading (unless you go with the Hayekean definition of coercion) in a 'free' market.
Only the state can coerce someone into a transaction. That is why every monopoly that ever existed in the world did so with the assistance of the state.
but if people didn't have such an incredible irrational hatred towards anything with the word "MS"
I agree that there is a lot of hatred for MS here, but you make it sound like MS did not earn some of it.
Calling Linux a virus, calling people who support linux communists, funding SCO, lobbying politicos in Boston - they've done their share to earn this hatred.
it cannot just vanish into bankrupcy because of faulty planning
What does that mean? Does it mean that the city always plans right or does it mean that no matter how faulty the city's planning, it will not go into bankruptcy?
A bankruptcy or a loss is a sign from the market (i.e., the people who buy the product or service) that your product is not needed, is expensive or that it is inefficient. That could be because of faulty planning, poor execution, low investment, malinvestment, bad luck, bad marketing, bad timing, bad partners, poor customer service, poor hiring practices, etc, etc.
Government is not subject to this feedback - as you said it, they do not go bankrupt or take a loss. This means that they can produce inefficient goods or services and it will still stay on the market. And apologists for govt services will always cite low investment as the problem while ignoring the 1000 other things that can cause a business to fail.
He might have been a very good engineer (I cannot judge - I'm not a good engineer), but he is certainly does not sound very smart here:
I feel badly about the situation for everyone. I don't think Apple should have even done it. ***Maybe a very much more gradual price reduction,***
So he favors consumers paying more for longer? So he is ok with the initial price, but he feels that Apple should charge consumers more than Apple wants? And he also wants Apple to settle for a lower volume (if the price is higher, the volume will be lower) and hence lower profits ?
So, Woz wants Joe Consumer to pay more, Apple to settle for lower profits - all to make the early adopters feel better?
I didn't buy one and I thought it was a kick in the gut. Just about everyone knows that CE devices drop in price over time, but the duration and percentage of the price drop is a bit steep.
So you would've been happier if the price *didn't* drop and the consumer paid more for a longer period?
This just shows that you and Wozniak do not understand the role price plays in regulating supply and demand. I bet you also complain about "price gougers" after a hurricane hits.
A higher price draws more supply in (either from the same producer or different producers) - when more supplies hit the market, the price drops due to competition (the single supplier or monopolist will drop prices to increase volumes).
If the initial price is set artificially low (by govt edict or other pressures), the additional supplies will not come in. This is the reason price controls always lead to longer lines and empty shelves. Just ask Robert Mugabe - the invisible hand just smacked his people hard.
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It's not just the Fed and actual money printing, anytime there is money lending there is effectively a defacto increase in the money supply.
Correct - I just used the Fed as an example.
Further a small amount of inflation encourages investment.
It definitely does - but is it good?
Normally, a businessman would invest because he sees that people are creating a lot of wealth by their productivity/newly discovered natural resource/etc. The businessman will see the general amount of wealth people have and make a decision.
But if that signal is distorted because the money supply is higher than the actual wealth produced by people, then he will make an investment where he shouldn't have. This is how statements like your's above are justified. But this is a big problem. The businessman, after he makes his investment, soon finds out that there isn't the amount of wealth he thought there was - there is only more currency floating around and the prices have risen accordingly. Now his investment does not produce the return he was expecting. Soon there is a glut of inventory, consumer demand goes down and the economy is in a recession.
This is exactly what is happening now. Inflation was created by Greenspan to help investment. All that malinvestment in housing is what is coming back to bite the economy now.
Ask yourself this question - if inflation can help investment, why not inflate a lot and inflate all the time. Wouldn't that help growth all the time? Tricking people into thinking times are good is not a smart way to grow. Unfortunately, the proposed remedy is worse than the illness.
We already have that. There are virtual currencies and other exchangable notes for goods & services - linden dollars, QQ, airline miles, gift cards, etc.
They are not competing currencies because one cannot demand to be paid in those currencies. By law, you have to accept the Fed note as a legal payment.
There will be no problem with fiat money if the new money created is exactly equal to new wealth created - if the country as a whole produces 10 more widgets this year, then the Fed should create 10 new dollars. No inflation, no deflation.
The problem with the Fed and fiat money is that they consistently create more new money than the new value/products/services created. And this is by design due to the political process.
A gold standard on the other hand will not produce enough new dollars to cover the amount of wealth created. The amount of gold mined annually is a tiny fraction of the new wealth created.
The standard answer (mostly from supporters of Ron Paul and in mises.org) is "the value of gold will increase to account for the new value created". That is true. But that means that everyone who holds gold gets a share of the new wealth created even if they did not contribute.
What is needed is a free market in currencies - people will come up with solutions that are varied and that serve different purposes.
You had to bring economic logic and facts into the discussion, didn't you?
"..... prices in a competitive market are based on the consumer's willingness to pay, and nothing else....."
"...in a monopoly situation, where the seller is able to "set" prices..."
and
"....a price that is determined as consumers make decisions between countless sources...."
Even in a 'monopoly situation', the consumer has choices. If Sirius and XM merge, the consumer still has choices between that and FM, AM, CDs, iPod, etc. Similarly, the consumer had a choice between paying the high railway prices vs. the steamboats, horse carriages, etc. The consumer makes a final choice that makes him better off economically.
While I do agree that prices are higher if there is only one supplier vs. two, it does not mean that the producer is able to 'set prices'.
However, charge for the Windows binaries/installer. Most Windows users will pay $20 rather than have to figure out how to compile it. If they do compile it anyway then their time is worth less than $20 so they could not have afforded it anyway.
.EXE for free?
Some people might still buy it from him since it is the 'official EXE', but many of them would just get the free EXE.
But won't someone just compile it and then give the
There are still quite a few businesses that exist to benefit others. OLPC is not about making a profit... it's a non-profit organization!
Any business whose products are bought by customers voluntarily, by definition, is benefiting others (otherwise, why would customers buy the product), even though the business did not set out to 'benefit others'.
But as long as these 3rd world nations do not grow intellectually, they will remain the starving, dependent children of world.
Correct. As someone from a 'third world' country, this is why I've always opposed handouts.
Although I agree with the broad idea of 'teaching a man to fish', I think the OLPC is a ridiculous idea (at least for India) and will fail. I've been in the classrooms they are targeting and what they need are motivated teachers, not books or computers.
These schools do more to educate Indian children than any other project. And they make a profit at it!
If the industry ....
Who gets to decide who the 'industry' is? The big companies love this scenario (not necessarily in this instance, but generally): the govt decides that a blessed few are the 'industry' and keeps every small producer out by regulation.
I'm not buying their 'research' either.
There is no way India is an 'extensive surveillance society' - not because the Indian govts care about privacy, but because there is no system in place that can be used to abuse privacy.
No SSNs, no tax ids (for 99% of the people), no centralized health records (other than what the patient saves in her -paper- file), no technology or competence in govt to systematically tap phones, no institutions to come up with broad agendas to spy on people, etc.
In short, Indians have a lot of privacy precisely because the govt does not care about privacy.
I thought the point was about intellectual property - you know, the non-tangible intellectual kind.
The right of the creator to control their creation is -- correctly -- understood as a human right. There is no (or there should be no) distinction between tangible, material property and the non-tangible intellectual kind.
You are absolutely correct. But the "right of the creator to control their creation" does not mean that "the creator is allowed to infringe on my right to create". I think that is what is overlooked by many who blindly support all forms of intellectual property.
I'm not talking about music in particular, but about the general idea of "I did ABC first, now you cannot do ABC (and a thousand things related to it)". This goes beyond your right as a creator and actually takes away my freedom to create.
I happen to think that intellectual property can be controlled by private parties via contract law without the need for government enforcement.
The difference between gold and fiat money is that gold plays two roles -
1. It represents wealth (i.e., what paper money does now) and
2. It is wealth by itself (jewelry, industrial uses, etc).
(2) is what the OP was thinking about when he said that (to summarise) 'there isn't enough gold to represent the economy of the US' - he was not thinking about (1). Fiat money only has (1). It has not value by itself (other than its use as paper).
There is nothing wrong with using paper money - arguably it is more efficient. The problem is counterfeiting - paper money is easy to counterfeit. I am not talking about 'criminals' using printing presses to print paper that looks like a dollar bill. I'm talking about governments printing more paper money than there is wealth.
Gold is harder to counterfeit and hence keeps everyone honest. As Greenspan said, the Fed's job, in theory, is to, as much as possible, replicate the stabilizing role gold played in earlier economies. That rarely happens - witness the clamouring for lower interest rates (i.e., printing more money) to bailout bankers and people who bought million dollar homes on $20,000 salaries.
IMO, there should be a free market in currencies - let many people attempt to solve this and someone will come up with a better solution. Of course, that means the bankers cannot pick people's pockets through inflation anymore and politicians cannot spend like drunken sailors to get votes, but I'm sure they'll find something else to do.
Don't know why otherwise intelligent people don't get this simple fact. Whether you use paper money or gold or diamonds or cigarettes or whatever, they can only stand-for or represent or reflect the true wealth in the economy. They are not wealth by themselves.
Not that I support the gold standard, but I think currency (and the value of currency) should be set by market forces and not by some unaccountable bureaucrats who create inflation while also pretending to 'fight' it.
Not that I'm complaining - I made (and continue to make) a lot of money courtesy of helicopter Ben and his clueless pals.
We send them more money every year,
And they send you goods equivalent to the 'money' you send them (actually, they send you goods that are worth more than the money you send them due to their currency adjustments).
I think your point was that they are getting wealthy from trading with you. That is true. And you are getting richer by trading with them. Trade is not zero sum.
What key do I press to go to the cyber-internet?
Well, we were dealing with very simple scenarios leaving out all the other complexities.
It is impossible to create a model which will take into account all the factors and give you an answer for various tariffs. For such model to be created, you'll have to take into account new technologies, weather (for products like beer), foreign politics, consumer taste (tariff on light beer vs tariff on reg. beer), new manufacturing technologies (for the product in question and related products) in addition to the industry size, consumption, employment, etc.
If you accept my previous statement, it raises this question: if it is so hard to model something and predict the effects, on what basis do people impose tariffs (or any other govt policy)?
Well, perhaps, but it might also mean that the US manufacturer is forced to sell much cheaper than he would otherwise have preferred to - even to the extent of selling at a loss just to keep stocks moving.
And how long can he do sell at a loss? If he sells at a lower profit, he will not be able to invest and his product quality will suffer. This surely punishes the manufacturer and his country, but the consumer still pays the same price for an inferior product. Of course, this is a simplistic view, but so is your original point. Reality will include bribes, lobbyists, etc.
It's not a perfect tool by any means, but taking realpolitik into account it's really the only way to punish another nation for violating their trade agreements with you. You're taking a small hit yourself, but the manufacturers in the target nation probably feel the pain more than you do.
The hit to the manufacturer depends on how big of a market you are; the hit to your people depends on how expensive the alternatives are.
Either way, it is a bit like cutting your nose to spite your face.
Chapter 7 in this PDF explains it much more clearly than I can.
The money raised by the tariffs will go to the government's treasury, which means other taxes could be lowered. You aren't denying access to cheap goods, you change relative prices.
Which makes it a redistribution - take from Consumer A, pay Industry B which reduces prices and Consumer C enjoys lower prices.
It is important to see that this works only as long as A is willing to put up with it. As soon as A stops buying the product (or perhaps takes advantage of B's low prices), the govt loses the income from the tariff. The govt now has to restore the tax on B which of course fights it tooth and nail - lost jobs, lobbyists, etc. So the govt raises taxes somewhere else and continues the privilege for B.
The consumers, of course, lose.
In this hypothetical example, Belgians would pay higher prices for beer imported from the US, but at the same time they could pay lower prices for beer made in Belgium. People working for American breweries would lose their jobs, and Belgian breweries would hire more people.
So the Belgian govt takes money from the consumers (in the form of tariff) and gives it to Belgian brewers (in the form of tax concessions) - am I understanding you correctly? Otherwise I do not see how Belgian beer would cost less.
And your claim is that Belgian brewers would hire more people because of the lower tax they have pay and the higher sales they enjoy as a consequence.
Seems win-win doesn't it? Until you realize that the money these brewers get from the govt had to have come from the pockets of consumers. Money that these consumers could've invested or spent on something else thereby creating employment for others.
So, whatever additional employment created by the brewers can only come at the expense of workers somewhere else. The increase in employment at the brewery is seen, the lost jobs due to the tax is unseen. Frederic Bastiat wrote about this 200 years ago.
That is, Belgium might demand a 50% additional tariff on foodstuffs imported from the US
So the Belgians who currently pay $100 for a product from the US will pay $150 after the tariff or pay $110 to buy the product from Australia or pay $125 to make it in Belgium itself. Yeah that'll show them!!
I've never understood the logic of imposing tariffs to punish the other country - you are only punishing your own citizens by denying them access to cheap goods. It does benefit special interests at home though.
So what you are saying is that both NPR and Fox screw the people - NPR more blatantly/honestly than Fox.
No.
government limit regulation only to account for externalities ( pollution, healthcare, education etc... )
Excuse me, but how are healthcare and education externalities? Externalities are costs or benefits arising from an economic activity that affect somebody other than the people engaged in the economic activity. I do not see how a person's healthcare or his education is an externality.
while simultaneously ensuring that you don't get coercive monopolies.
There cannot be a coercive monopoly in a free market. By definition, one party cannot coerce another into trading (unless you go with the Hayekean definition of coercion) in a 'free' market.
Only the state can coerce someone into a transaction. That is why every monopoly that ever existed in the world did so with the assistance of the state.
but if people didn't have such an incredible irrational hatred towards anything with the word "MS"
I agree that there is a lot of hatred for MS here, but you make it sound like MS did not earn some of it.
Calling Linux a virus, calling people who support linux communists, funding SCO, lobbying politicos in Boston - they've done their share to earn this hatred.
it cannot just vanish into bankrupcy because of faulty planning
What does that mean? Does it mean that the city always plans right or does it mean that no matter how faulty the city's planning, it will not go into bankruptcy?
A bankruptcy or a loss is a sign from the market (i.e., the people who buy the product or service) that your product is not needed, is expensive or that it is inefficient. That could be because of faulty planning, poor execution, low investment, malinvestment, bad luck, bad marketing, bad timing, bad partners, poor customer service, poor hiring practices, etc, etc.
Government is not subject to this feedback - as you said it, they do not go bankrupt or take a loss. This means that they can produce inefficient goods or services and it will still stay on the market. And apologists for govt services will always cite low investment as the problem while ignoring the 1000 other things that can cause a business to fail.
He might have been a very good engineer (I cannot judge - I'm not a good engineer), but he is certainly does not sound very smart here:
I feel badly about the situation for everyone. I don't think Apple should have even done it. ***Maybe a very much more gradual price reduction,***
So he favors consumers paying more for longer? So he is ok with the initial price, but he feels that Apple should charge consumers more than Apple wants? And he also wants Apple to settle for a lower volume (if the price is higher, the volume will be lower) and hence lower profits ?
So, Woz wants Joe Consumer to pay more, Apple to settle for lower profits - all to make the early adopters feel better?
I didn't buy one and I thought it was a kick in the gut. Just about everyone knows that CE devices drop in price over time, but the duration and percentage of the price drop is a bit steep.
So you would've been happier if the price *didn't* drop and the consumer paid more for a longer period?
This just shows that you and Wozniak do not understand the role price plays in regulating supply and demand. I bet you also complain about "price gougers" after a hurricane hits.
A higher price draws more supply in (either from the same producer or different producers) - when more supplies hit the market, the price drops due to competition (the single supplier or monopolist will drop prices to increase volumes).
If the initial price is set artificially low (by govt edict or other pressures), the additional supplies will not come in. This is the reason price controls always lead to longer lines and empty shelves. Just ask Robert Mugabe - the invisible hand just smacked his people hard.
Agreed. If not for the wealthier markets but maybe for developing countries where the cost of Windows license can't be what it is US/Europe/Asia, etc.
Businesses would not pay much for an ad targetting that demographic.