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Comment by kelseyfrog | Hacker News Reader

I'm actually a proponent of changing prices based on wealth.

It allows us to move toward pricing as a coeffecient of wealth which puts purchasing on the same playing field as our namesake economic system: capitalism. Capitalism fundamentally creates wealth through multiplication - share price * shares, asset price * assets, etc. It only makes sense that the wealth created that way is also able to be drained that way.

That's why I'm for allowing banks and investment firms to be able to sell identifiable customer data - so that merchants can effectively price ability-to-purchase into individualized pricing. Markets function better when information is diffuse.

Why shouldn't Bill Gates pay $150,000 for a banana? Proportionally it costs him the same as it would for me.

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Because if Bill Gates is paying $150k for bananas, my expected value as a shopkeeper is maximized by not selling you my limited stock of bananas at $0.50/each and instead waiting for the remote possibility that Bill Gates walks into the store instead. It's not socially optimal for bananas to rot on store shelves when there are willing customers at a lower price point, but this happens all the time in dynamically priced markets.

This comes up frequently in housing, for example.

Everyone has a different risk/reward tolerance. If your strategy involves risking banana rot to snag that bag, then more power to you. The market will find an equilibrium.

That is the point, the market will find the equilibrium, which is selling bananas at a market clearing price ($0.50) and make a modest profit on each banana. You can charge $150,000 per banana, but Bill Gates can just go to a different banana stand OR just not buy a banana and now you make nothing.

I'm not talking about charging 150,000 per banana. I'm specifically talking about charging Bill Gates 150,000 for a banana and charging you 20-50 cents.

If I knew how much each customer could pay[1], I'd charge them exactly that.

1. At profit.

Your 20-50 cent customer does the same thing but prices it for Gates at 140,000. Rinse and repeat and Gates ends up paying 20-50 cents for a banana from somebody that isn't you.

I'm talking about forming a cartel.

What would stop Bill Gates from spending $150K+ on just growing his own bananas and then selling them for a market clearing price at modest profit and therefore putting your banana pricing scheme out of business?

This is a wholly unrealistic way to do business lol.

Cartels routinely block competitors. That's kinda their jam. Not a problem.

The point of prices is to find the value of things, so resources can be better allocated. It is not about fairness.

By the way, share value is only a guess about future production in the next 10 to 20 years. It is not wealth that exists today, and it cannot be consumed.

So you cannot take that wealth from the rich and "distribute" it. What you are really doing is taxing the poorest people.

If Microsoft is guessed to make more profits in 5 years, its share value grows, but no physical wealth has been created today. So if you take that "wealth" and use it to buy cars, you are taking those cars from the poorest person who would have bought them otherwise, because resources are scarce.

Those extra cars you are trying to get do not exist just because Microsoft's share valuation grew overnight.

"It only makes sense that the wealth created that way is also able to be drained that way" is a HUGE statement that is highly unsupported by your argument.

We pay a price for a banana because of the intrinsic value of the banana AND the price the market will bear for a banana. Bill Gates will never pay $150,000 for a banana because a banana is not worth that much. You can try to charge him for that and instead you will just not sell him any bananas. The capitalist here loses because they want to make money and would sell a banana at a market clearing rate.

Goods having intrinsic value is a lie told to children by Marxists. It's literally the first chapter of Capital.

Bill Gates, or Elon, or do-not-anthropomorphize-Ellison live in universes where the 150k for a banana (or anything) is not achievable, because at their scale they can simply buy a fruit company or plantation

and that's the reality, btw -- Bill Gates is the largest owner of farm land in the US

proportionality will never work when you can essentially dodge the system entirely. you're not going to capitalist your way out of that, you're gonna have to ditch capitalism first

Allowing dynamic prices only hurts people with less means who will find themselves wasting a lot of time hunting for the lowest possible price. And businesses may claim to charge based on wealth, but what they will do is charge based on desperation. There are also repercussions on wage, like what's the point of a raise, if I'm going to be paying more for expenses and make the same savings at the end of the day? Fixed prices simply eliminate a lot of inefficiency and headache from the system and prevent everyday shopping from being a cortisol ridden experience for the average person.

Besides, what you're proposing does not result in draining of wealth. It simply moves wealth within the capitalist class and keeps it there. If Bill Gates is paying 150k for a banana at Whole Foods, he's just paying himself because he likely owns a big chunk of equity in Amazon. To fix wealth inequality you have to transfer wealth to the working class. It has to be a tax so that the money moves to the public and is spent for the benefit of the public.

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