Bit Rot and Capitalism and Other Topics

Laszlo I am not sure why you believe ECC does not matter to consumers? What you base this assessment on? It must be based on some assumption on what is important to consumers?

The reason I believe it matters is because in all my research on the topic of bit rot and trying to preserve family videos and photos long term, lack of ECC RAM becomes a problem. The people I have seen discussed this seem to claim corruption in RAM is the most likely cause of bit rot and not corruption by the hard drives themselves. Since I believe preserving family photos and videos is very much something of interest to consumers, I think it naturally follows that ECC is also of interest to consumer. The implication here seems to be that consumers don’t have important data they need to store and hence we can keep them crappy error correction system.

What if We Abolished Price Targeting?

Now I’m not sure whether price targeting is that much of a problem and if you can somehow abolish it then it woulnd’t cause more harm.

Depends entirely on how you define a problem, and you are speaking on behalf of. For society as a whole it is a problem in that companies deliberately making worse products, without there being resources saved by dong so. In the worst cases such as with IBM printers, more resources and effort has to be invested to make a product crappy than to make it good. Seen from a productivity perspective and resource utilization perspective this is suboptimal.

Which means that their profit is not a lot larger than what they need to make in order to provide the products/services that they do.

I am not really pitching this as some sort of moral question, but rather as a demonstration of inefficiencies introduced by capitalism. Yet it also creates other efficiencies. But here I am trying to push back at this naive assumption that the most capitalist way of doing something is always the most efficient one.

And if this is the case, then abolishing price targeting means that the average sales price will remain the same, it’s just the distribution that will change.

No, you are missing a very crucial part. Price targeting frequently involves deliberately making a product worse. Without price targeting, the average product sold would be of higher quality. The cheaper product needs to be made deliberately worse to scare premium buyers over to the higher priced product. If price targeting did not exist, there would not be an economic incentive to sabotage your own products.

Is Price Targeting a Feature of Capitalism?

Now even if it’s a problem, I don’t think it’s a problem with capitalism per se. But of course, it depends on your definition of capitalism.

It is a feature of any system where profit is a key driver and in which products are sold at market prices. In any such system you will seek to charge as high price as possible to get as high profit as possible for your company.

If you take a step back and look at this from a bird-eye perspective, the company is a doing a local optimization with global detrimental effect.

I have written about that before: Failures of Capitalism: The Prisoners Dilemma

Basically a prisoner dilemma situation is where each participant in a society make selfish choices which are optimal for themselves but when everybody makes those same kinds of choices it is sub optimal for society. It is like every fisherman fishing as much fish as possible, until all the fish is gone and then all fishermen starve. It is a local optimization which serves you seen in isolation. However when you take a step back and look at if from a birds-eye perspective you can see how idiotic it is. If one could only make some kind of agreement that would make everybody better off.

Nordic Socialism and Capitalism

Growing up in a communist country (well, technically it was called ‘socialist’, but it meant the same), the nordic countries definitely look like capitalism for me. It’s just not completely unregulated, laissez-faire capitalism.

No country has ever been socialist, and despite your country calling itself that it was just a marketing ploy. If anything the Nordic countries are probably the closest anyone has gotten to socialism at a national scale. But I have never said Nordic countries are socialist countries. I said they are social democracies. A social democracy is a mix between socialist and capitalist principles. What that specifically entails is a bit large topic to get into here. But you can read my story: What is Modern Scandinavian Socialism in 2020?

The key point I wanted to make was that systems like social democracies which have taken a middle of the road approach have been successful: The Success of Social Democracy.

This is really to motivate the attitude that we are better off regulating the markets for our benefit than to hold market upon some pedestal of assumed perfection.

Are Markets Always Better?

Anti-trust laws, customer protection laws, etc. are all market regulation rules. As is the prohibition of price discrimination (which is prohibited throughout the EU).

Yes, but the capitalism fanboys will even object to this. They want as little government interference as possible. I am sure they would have called Adam Smith a socialist had he been around today.

But my point about social democracy is that you often need to go much further than that. Social democracy e.g. socialized health care and education. It is one of the areas where the “socialist” countries of old proved themselves somewhat capable. I remember reading statistics about people from Eastern Europe. They where pretty much worse off on every metric, except education and percentage of women working. I think it is important to not only focus on the failures of the East Block but also notice where the system worked.

The Soviet Union e.g. was a scientific powerhouse, the same cannot be said about modern day capitalist Russia. And apparently apartment buildings built today in Russia are very frequently worse than those build in Soviet times. Of course citizens today enjoy much better consumer goods.

But if you look at socialist parties in Norway today, they have learned from these experiences. They no longer push planned economics for everything and see a value in markets for part fo the economy. I don’t think there is any question today that markets are exceptionally good at a number of things. What I question is the orthodoxy that they are always better, or rather that the private sector is always better.

We have seen lots of deregulation in Norway over the last decades with many former government functions being taken over by private companies. All to often they do a shitty job. Yet despite the bad experiences this solution keeps getting pushed, because free markets have become this religion. A mirror image of the mistakes of the Soviet Block is being repeated. Instead of insisting socialist solutions are superior in every aspect. Today one is insisting private or capitalist oriented solutions are always superior. Doesn’t matter if reality says something different.

Can Price Targeting Be Banned?

Now I guess the prohibition of price targeting would work similarly to hwo other customer protection measures do. Once a company is being accused, some organization would inspect their products and offerings to figure out whether the price difference is warranted

That sounds like a lot of red tape and complicated bureaucracy. I don’t think that is a sensible solution because companies need some way of funding themselves.

Rather I see it more as a point to keep in mind when considering delivering a service through a government run enterprise instead, or have government shoulder some of the costs. A government monopoly suffers from the inherent problems of monopoly. This has to be weighed against private enterprises which suffers the problems of profit drive, short term thinking, price targeting and many other issues.

The ideological purist would always pick a state enterprise or always pick a private enterprise. I am trying to get people to think more pragmatic.

For memory and CPUs I am sure the considerations of all factors will favor a private system. But this does not always need to be the case. And often it is not really about having a solution but about identifying the problem. Before we can even begin to come up with solutions we need to know what the problem is. And we must dare to try solutions which are not always free market capitalism. We have made a world where the choice is like with Henry Ford “You can have any color, as long as it is black.” In today’s neoliberal reality voters are allowed to select any political/economic choice as long as it is capitalism. Maybe time we got over the trauma of the Berlin wall.

And again, not sure if it provides any benefit to the customers.

Of course there would be a benefit. Consumers would get a product which was not deliberately sabotaged to scare consumers with deep pockets away from buying it. Imagine a government enterprise setup for common good instead.

The Norwegian liquor and wine monopoly e.g. has for many years been considered as the company in Norway with the absolute best customer services. All despite being government owned and operated. It defies the old East-Block concepts of what state run means. The devil is in the details. In the old “socialist” states people could not really be fired. People can get fired in government enterprises in modern social democracies. The government is not promising everybody a job.

Anyway let me not derail. Why are customers so satisfied? Because the liquor monopoly is banned by the government from encouraging alcohol consumption or setting maximum sales as a target. In other words the company operates on entirely different parameters than a normal capitalist corporation. However leaders for such companies coming from private enterprise wants to show success. They want to win at something. And so what these guys choose to make their goal is customer satisfaction because increasing revenue is basically an illegal goal.

Hence high customer satisfaction is almost an obvious outcome. It follows from the incentives put in place.

Likewise one can imagine any state enterprise selling different products being required to optimize for what is most beneficial for society or customers as a whole rather than what brings in most profit. If you do that, then price targeting no longer makes any sense. If the goal is to optimize your profit, it makes sense. But if the goal is to optimize the satisfaction of customers then the goal changes.

Written by

Geek dad, living in Oslo, Norway with passion for UX, Julia programming, science, teaching, reading and writing.

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