Too many people are getting way too rich these days by gimmicks instead of providing a service that people need.

I'm sorry. I see that other people are agreeing vehemently with this idea. But it's poppycock. You don't get rich without providing something that people want.

The only way to make money is to get people to buy your product. People are only going to buy it if it's something that they want [1], at least to the degree that they value it more than the money that they're paying. Thus, someone making, say, a million dollars is prima facia evidence that they have provided value to others of at least a million dollars.

Of course, you might say that there are ways they could have built their product better, such that it would have been even more valuable to their customers. This is true, but in this case they would also be charging more, extracting, say, two million from customers now because that's how much the improved product is worth (i.e., how much value it provides to customers).

[1] I over simplify. There is another way to get people to fork over money, and that's to get the government to force them to do so. For example, I'm not interested in medical insurance that covers psychiatric and drug abuse conditions, but the New Jersey government says that all medical insurance must cover this, so I am (or really, my employer is) forced to waste money on it.

The thing is, this "loophole" supports my argument. In a free market, the only way to get rich is to provide value. It's government regulation that perverts this. And what all you guys seem to be advocating (or at least decrying the lack of) is additional government regulation. The end result of these regulations, a few years down the road when all the dust settles, is that you will be forced to pay for things you don't want, and the existing corporations will be entrenched in a way that guarantees they'll live forever, thanks to government regulation/protection. See Rent Seeking and Regulatory Capture.

Sorry man, but you've already hit the wall coming out of the gate. You have Want and Need confused - They are not synonyms.

Mr. Joker, you're wrong for two reasons.

First of all, even if a product (say, those stupid wristbands that come in goofy shapes, that seem to be everywhere lately) has no objective purpose, they can still improve a person's situation if that's what they want. Consider this can of Mountain Dew in front of me. I certainly don't need it. I could have gotten a cup of water instead, at no cost to myself. But I like Mountain Dew, darn it, and it's worth $0.50 to me to have it even if it doesn't do anything objective for me.

The economic thinking behind this is called the utility function. Everybody has a set of values, how much a given thing is worth to them. Even if you can't measure the value of a product (because it's purely subjective, like the stupid wristbands), an economist would still say that a person ascribes some value to it, and that value is obviously communicated by how much they're willing to pay.

The fundamental point of economics is the choices that people make: why are they willing to forgo one option in favor of a second (see opportunity cost). The fifty cents I spend on my Mt. Dew I could have used on a cookie for dessert, and instead had a cup of water. But I value the citrus bite of the soda, and how it clears the chewed sandwich out of my mouth. I could even have saved it for a larger purpose, but the marginal utility of half a buck is tiny for me. The person who bought the stupid wristband thing is wasting her money according to my values, but the decoration on her wrist perhaps makes her feel better about herself, and so provides value to her in excess of its purchase price, according to her utility function.

Thus, you can see that even if we don't see a practical application of something, the fact remains that a product's purchaser somehow values it more than the money he spent to acquire it. And thus, the producer of idiotic wristbands is indeed providing value to that hypothetical girl.

Second, who are you to say what's a gimmick and what has value? As I alluded to above, we each have our own values, our own utility function. Just because something has no value to you (nor to me, for that matter) does not mean that it has no value to anyone. And you and I aren't in a position to understand why the purchaser values it (indeed, frequently even the purchaser doesn't know; the utility function isn't necessarily arrived at rationally or even consciously, it can be, and probably is, largely emotional).

Once again, the fact that someone valued the wristband more than she valued the money to pay for it is prima facie proof that the product does have that much value. If you disagree with that, you're setting yourself up as Big Brother, as someone who claims to know better than any of us how to run our own lives.

I think what bothers me the most is that these companies have the power and potential to do a lot of really great things, but what they produce is just mediocre at best.  Yes, they are giving what people need in the forms of cell phones, tablets, websites, etc.  And that's all fine for the majority of people who don't think twice about it.  It was fine for me until I started thinking about it recently.

But once you start asking "Why?" and find out the reasons behind everything, it's really really frustrating.  And I understand that businesses need to make certain decisions to protect themselves financially.  but what's happening now is they have gone too far overboard that way at the expense of even a decent end user experience.  

The only way to make money is to get people to buy your product. People are only going to buy it if it's something that they want [1], at least to the degree that they value it more than the money that they're paying. Thus, someone making, say, a million dollars is prima facia evidence that they have provided value to others of at least a million dollars.

Of course, you might say that there are ways they could have built their product better, such that it would have been even more valuable to their customers. This is true, but in this case they would also be charging more, extracting, say, two million from customers now because that's how much the improved product is worth (i.e., how much value it provides to customers).

I'm curious how you see this aspect of it:-
there is often demand for things, e.g. iPhones where you can change network provider (or whatever you call it over there) but people dont get it because the company doesnt want to give it. Fair enough, you'd think some competition would come along and pull the rug from under, but instead, now, it looks like they're joining the club.
We cant force someone to provide something, but OTOH it seems you think it's okay to allow them to rig the game any way they like (and no, I'm not asking for regulation - I'm still trying to get my head around all this stuff...) So, as I say, I'm curious how you see that and how you might imagine things developing in the future. I mean do you think there will be real competition at some stage - or do you think, that is *real* competition now ? (I know: vague questions! I'm trying to get an overview without maybe knowing, or even understanding enough of the details)

Talking about competition, that often doesnt work (I'm not saying I know anything better). It hasn't worked with graphic design software - you could say Adobe more or less has a monopoly. That's the fault of their competitiors really... Here's maybe a better example:
In Germany there's only four or five big electricity suppliers. They are artifically keeping the prices high (highest in Europe, or in EU at least). People are saying it's not enough competition, but also to do with apathy of the people. Same with gas prices here (and there's even a 'green' tax on top of that). I dont know what it is. Are people supposed to march for 'real' competition or what?! (or maybe it really is that you simply get what you accept.)

So I for one know I'm *not* getting value for money with these last two examples... so I certainly wouldn't agree your second paragraph above. If people get away with it they'll charge as much as the market can handle - again fair enough, but dont be painting it with a 'value' brush [edit] I note that my last two example are really things I *need* so maybe it's not appropriate to compare fully with people buying things they want but I think the mobile phone example could be somewhere in between [/edit]

Now do you think I can go into a phone store and fine a (unicorn) plain god damn phone? No. Best I can do is a clamshell with GPS - as if anybody can find (or even see) anything on a 1 inch map. It's a stupid pointless gimmick - that will probably get you killed if you ever actually try to use it.

You've just proven my point.

The reason your phone has a GPS in it, is not that the manufacturer thinks it's a nifty gimmick that they can foist on you. It's because of government regulation. The FCC's regulation for E911 service require that cell phone providers be able to locate a phone geographically. You're being forced to buy a GPS because some government regulators decided that your personal values are not important, and that their own ideas should determine how you spend your money.

This is precisely what I'm talking about. We give the government control of something, and initially they've got the best of intentions. But sooner or later, lobbyists get in, people retire from the industry and get jobs in the regulatory agencies, and so on. And before you know it, the agency is no longer trying to work in your best interest, but is instead trying to guarantee the ongoing livelihood of the corporations in the industry.

Now, we don't know today what kind of regulations will be forcing us into such nonsense with our Internet access. If we could know those kinds of things ahead of time, then you wouldn't be stuck with a GPS you don't want. But without exception, this is the lifecycle of all regulatory agencies. If you give the FCC the authority to regulate the Internet, then I can say with absolute certainty that they'll be protecting the service providers, within a matter of a few years.

Before someone disagrees with me: I think that any refutation of my claim must include an actual example of a mature industry whose regulation is free of protections for those corporations. We've got a cultural meme where "common sense" tells us that seeking a profit is inherently evil, and that regulation is necessary before we all fall into the pit of despair. If your response is to advocate regulation based on this meme, please be prepared to show how it is that the regulation won't be worse than the corporations.

And since I'm showing you real, historical examples of how regulation has made things worse, I think it would be helpful if you could provide *real* (not hypothetical) examples of how an ISP's management of their network really is (not *could*, mind you, but *is*) making things worse for customers.

Does not mandate that the phone have a bunch of usless buttons that control 7 different flavors of GPS MAPING Software

Huh? I've never seen any phone that has actual buttons to control the GPS features. I think you're hanging onto your argument by your fingernails.

Google's response convinces me even more that we are finished

Quote

So, for example, broadband providers could offer a special gaming channel, or a more secure banking service, or a home health monitoring capability – so long as such offerings are separate and apart from the public Internet

(Emphasis mine)


My reaction is:

WHAT THE....?

http://googlepublicpolicy.blogspot.com/2010/08/facts-about-our-network-neutrality.html

A bunch of AOLs?