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Let's take two examples. First Pepsi Vs Coke. Both Pepsi and Coke make a product that takes no more than 10 cents to create, ship, and put into stores. And yet

Let's take two examples. First Pepsi Vs Coke. Both Pepsi and Coke make a product that takes no more than 10 cents to create, ship, and put into stores. And yet their prices are many times more than that. Capitalism says that a perfectly free market will eventually reach a point to where there are no profits. Why is it that in a very mature field such as soda, there is still massive profits? In order to get where they are they had to make deals, certain restaurants are only allowed to have one of them. They need logistics agreements. They need massive billion dollar factories. Those factories are working at way below capacity. Most of their value derives from these political aspects. In every market there are only 2 things you need to keep track of. Costs and Values. Values - Costs are the surplus. Who gets the surplus is negotiated between the average participants. In a buyer's market, where there are many suppliers all fighting to sell, the price is close to the costs, and most of the surplus goes to customers. In a seller's market, the price is close to the value. Soda is a seller's market. What if it were a buyer's market? What would happen if Pepsi dropped their prices to $0.10? Coke would have to follow suit, and they would end up with no profits. They know they can't bankrupt Coke doing so, as they each have equivalent infrastructure, so there is no need for them to slash their prices. Same deal with Coke. They are in a stable equilibrium. It is in the best interest of each company to split the market and reap the margins. Now let's take Uber and Lyft. We just saw the war phase explained through coffee shops above happen with them, and they are now solidifying into a relationship similar to Coke and Pepsi. Let's take a look at Uber 1. Uber is losing money. 2. Their drivers are making less than minimum wage after taking into account car depreciation. 3. Their investors are losing money. 4. Their customers are mad at the rising prices. What the heck is going on?! Everyone is losing! Just because you win a market does not mean that the market is worth having. Taxis in big cities makes sense. Taxis occasionally but you know will be expensive makes sense. Uber tried to push this low cost system where you use their system much more than we should be relying on. And it simply doesn't make sense. Costs - Values is negative! In 5 years we will be back to where we started, exact same use cases of Taxis, except with Uber and Lyft with near monopoly Coke and Pepsi margins.

vxNsr 5y ago
Thank you for taking the time to explain what you meant. I appreciate it and don’t want to discount the time and effort you put into it. That being said, I vehemently disagree: > First Pepsi Vs Coke. Both Pepsi and Coke make a product that takes no more than 10 cents to create, ship, and put into stores. I’m sorry this is so patently false on it’s face that the rest of your argument doesn’t make any sense. It also fundamentally misunderstands how a market works and especially what the current system is. The 2nd example is a little better but also just fails the sniff test, where I live right now, taxis are battling Uber/Lyft exactly because there were real pain points with taxis and the old system (that btw was also a monopoly, only blessed by the gov) that weren’t being addressed and the taxi companies in my city got their act together and decided to compete instead of attempting to hold us hostage to a broken gov-enforced monopoly system. I also don’t think you really explained how it’s negative value, unless you’re simply making a personal subjective value judgement. If that’s the case, please don’t present it as objective fact, it’s dishonest.
- ItsMonkk 5y ago
  > what you meant I wasn't the original poster. It's not very constructive to post that someone is wrong, and not explain why they are wrong. How wrong are they? Nope, just "sniff test". Working from first principles is the only way to get across to someone your mental model, but doing so in a comment is impossible. It would take an entire series of books to fully explain. There are skipped steps, and conversations are about narrowing exactly where we have a mental model difference. Switching from one government granted monopoly to a duopoly is not progress. We need competition to force buyer's markets.
  - vxNsr 5y ago
    > I wasn't the original poster. Yea I saw that after I replied but left it bec you seem to agree with them but didn’t actually explain what they meant. > It's not very constructive to post that someone is wrong, and not explain why they are wrong. How wrong are they You’re right. I should have been clearer. You told an substantiated lie, that’s why you are wrong. Not asking for first principles, just honesty. > Switching from one government granted monopoly to a duopoly is not progress. We need competition to force buyer's markets. Agreed. But the previous model was neither accurate nor a free market so using it as an example of a free market doesn’t work, and is dishonest. But really we’re getting way off track. I’d like to know how starting a new job where you’re getting paid more and ostensibly are productive is adding negative value.

vxNsr 5y ago

Thank you for taking the time to explain what you meant. I appreciate it and don’t want to discount the time and effort you put into it. That being said, I vehemently disagree: > First Pepsi Vs Coke. Both Pepsi and Coke make a product that takes no more than 10 cents to create, ship, and put into stores. I’m sorry this is so patently false on it’s face that the rest of your argument doesn’t make any sense. It also fundamentally misunderstands how a market works and especially what the current system is. The 2nd example is a little better but also just fails the sniff test, where I live right now, taxis are battling Uber/Lyft exactly because there were real pain points with taxis and the old system (that btw was also a monopoly, only blessed by the gov) that weren’t being addressed and the taxi companies in my city got their act together and decided to compete instead of attempting to hold us hostage to a broken gov-enforced monopoly system. I also don’t think you really explained how it’s negative value, unless you’re simply making a personal subjective value judgement. If that’s the case, please don’t present it as objective fact, it’s dishonest.

ItsMonkk 5y ago
> what you meant I wasn't the original poster. It's not very constructive to post that someone is wrong, and not explain why they are wrong. How wrong are they? Nope, just "sniff test". Working from first principles is the only way to get across to someone your mental model, but doing so in a comment is impossible. It would take an entire series of books to fully explain. There are skipped steps, and conversations are about narrowing exactly where we have a mental model difference. Switching from one government granted monopoly to a duopoly is not progress. We need competition to force buyer's markets.
- vxNsr 5y ago
  > I wasn't the original poster. Yea I saw that after I replied but left it bec you seem to agree with them but didn’t actually explain what they meant. > It's not very constructive to post that someone is wrong, and not explain why they are wrong. How wrong are they You’re right. I should have been clearer. You told an substantiated lie, that’s why you are wrong. Not asking for first principles, just honesty. > Switching from one government granted monopoly to a duopoly is not progress. We need competition to force buyer's markets. Agreed. But the previous model was neither accurate nor a free market so using it as an example of a free market doesn’t work, and is dishonest. But really we’re getting way off track. I’d like to know how starting a new job where you’re getting paid more and ostensibly are productive is adding negative value.