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The high prices ("price gouging") perform a social function because some cannot afford it; they prioritize what matters to them more, and ram is left available

The high prices ("price gouging") perform a social function because some cannot afford it; they prioritize what matters to them more, and ram is left available to those who absolutely require it. Trying to get around that by forcing prices below the market price simple encourages scalping behaviors. If prices are below the market price, but at the market price you would prefer the cash in your pocket over the ram stick, then you have every reason to sell it higher than you bought it because people are willing to buy it. It is those willing to buy it that are the main culprit in establishing the true price. In reality, it is almost never a true binary of "afford" or "cannot afford" like critics of surge pricing make it out to be; people evaluate the price according to their circumstance and make a trade off. It is because of these decisions, the state of demand, that surge pricing is possible, not because of the machinations of evil price scalpers. That is why manufacturers couldn't lower prices even if they wanted to; gpu msrp being a great example of gpu vendors being caught between consumer ignorance about economics and the facts of reality that gpus are scarce enough to warrant higher prices.

franga2000 11mo ago
I'm definitely not saying it's a binary can/can't afford situation. The point is that people don't "afford" things equally. I might some need RAM so badly that I'm prepared to take a huge risk and spend half of my paycheck on it. But that doesn't matter because someone else has 3x my paycheck, savings, and investment portfolio and a good credit score. How much money someone can spend on somethong is no indicator of how much they need/want it. Something like "GPUs are actually scarce" doesn't even make sense to say, since scarcity is more a function of demand than supply. The supply of GPUs wasn't exhausted because people suddenly needed more GPUs or because Taiwan couldn't produce as many of them as they used to, it was because a few rich bastards were buying into a bubble so they could make as much money a possible before it all comes crashing down. They didn't "need" those GPUs much more than even the scalpers. They were just a vehicle to make short-term profits at the expense of everyone else. And yes, of course those willing to buy things are the ones enabling the peice gouging. But that's not a useful observation. You either need something, so you'll buy it even if it doesn't make financial sense, or it makes financial sense to buy it, so you will. Notice how scalpers also fall into that second category, along with the rich bastards draining the supply.
- sophrosyne42 11mo ago
  Scarcity is a function of demand. That doesn't change the importance of what I said! In fact, it proves my point. The reason that "some rich bastard" is willing to pay such prices for gpus or ram or anything else is because they expect it to generate revenue for them equal to or greater than the amount they paid for it. How do they generate revenue? By selling a product! Who do they sell the product to? People like you and I who also compete with them to buy ram and gpus. In other words, the importance of what I said about prices depending on demand is that it depends on your demand. Rich bastards don't care much about ram per se; they could get it anyway. They care about it because of what (they expect) you're willing to pay for its products. Prices are what they are because people, on net, would rather spend the equivalent they could spend on ram by buying products of ram. Putting this in view to the idea that people don't "afford" things equally: by your assumption, this implies people can indeed "afford" other non-ram things better when it comes to the more important alternatives they could buy with the ram-equivalent funds. Not only do ram-equivalent funds compete with alternate uses, but ram as a factor of production competes with other factors of production. And all factors of production compete, by way of the so-called rich bastards, for your and my dollars. In other words, if ram is more expensive, it is to support alternate uses of ram whose products are valued more highly by consumers than the direct use of ram. And, most importantly if one were to try to get around this higher resulting price for ram, it would cause higher prices for the products of those alternate uses of ram. People would be less able to get the thing they value more highly than ram because ram competes with all our needs, and less ram can be used for its indirect use. All of that is to say that efforts to combat so-called price gouging bounds those who can less afford ram to be in a worse spot than otherwise. They can't afford ram as before, that much is true. But they prefer the alternatives to ram. If they would be better off by having ram, they would purchase that. Waving a magic wand to redistribute ram to them will give them ram, but now they lose what they valued more highly than ram.
  - franga2000 11mo ago
    Your logic that OpenAI can by proxy afford to buy out the entire world's supply of RAM because consumers value OpenAI products more than other RAM-dependent things assumes that OpenAI's money comes from selling goods or services to those consumers. It doesn't. The overwhelming majority of people pay zero dollars per year on AI services, while almost everyone spends at least a few hundred a year on gadgets that need RAM and other services that run on servers that need it as well. The money OpenAI is using to starve the rest of us of RAM is coming from pumped up valuation through circular investments, investor FOMO, cheap debt and often straight up gambling. Rich bastards know that they can pump money into the bubble to grow it and hopefully cash out before it bursts. Nowhere in that process did any regular person value AI datacenters over other uses of RAM.
Kbelicius 11mo ago
> The high prices ("price gouging") perform a social function because some cannot afford it; they prioritize what matters to them more, and ram is left available to those who absolutely require it. This is not true at all. It isn't left available to those who absolutely need it but to those who can pay for it. Those are two very different things.
- sophrosyne42 11mo ago
  You're attempting to construct a notion of need separate from the empirical experience of people's concrete choices, but that isn't possible if you want to be scientific. If a person spends $400 on a phone instead of 32gb of ram, they need the phone more than the ram. If a company spends $400 on ram instead of on some other production good, they need the ram more than the other production good - they expect it to generate more revenue. These two exchanges are not disconnected either: phone prices are affected by revenues of companies which use ram for production. And those revenues are determined by purchases of phones. The person demonstrates through their choice that the use of ram for an indirect purpose of making phones (however indirectly that might effect it) is more valuable to them than the direct use in their computer. The person is not excluded from "having" the ram in the most general sense: they have it indirectly because they benefit from its use in production whose products they value more than the direct use of ram. The person, along with all other consumers, participates in organizing production in the manner that best benefits them, according to their needs, which may not necessarily involve them directly owning the thing.

franga2000 11mo ago

I'm definitely not saying it's a binary can/can't afford situation. The point is that people don't "afford" things equally. I might some need RAM so badly that I'm prepared to take a huge risk and spend half of my paycheck on it. But that doesn't matter because someone else has 3x my paycheck, savings, and investment portfolio and a good credit score. How much money someone can spend on somethong is no indicator of how much they need/want it. Something like "GPUs are actually scarce" doesn't even make sense to say, since scarcity is more a function of demand than supply. The supply of GPUs wasn't exhausted because people suddenly needed more GPUs or because Taiwan couldn't produce as many of them as they used to, it was because a few rich bastards were buying into a bubble so they could make as much money a possible before it all comes crashing down. They didn't "need" those GPUs much more than even the scalpers. They were just a vehicle to make short-term profits at the expense of everyone else. And yes, of course those willing to buy things are the ones enabling the peice gouging. But that's not a useful observation. You either need something, so you'll buy it even if it doesn't make financial sense, or it makes financial sense to buy it, so you will. Notice how scalpers also fall into that second category, along with the rich bastards draining the supply.

sophrosyne42 11mo ago
Scarcity is a function of demand. That doesn't change the importance of what I said! In fact, it proves my point. The reason that "some rich bastard" is willing to pay such prices for gpus or ram or anything else is because they expect it to generate revenue for them equal to or greater than the amount they paid for it. How do they generate revenue? By selling a product! Who do they sell the product to? People like you and I who also compete with them to buy ram and gpus. In other words, the importance of what I said about prices depending on demand is that it depends on your demand. Rich bastards don't care much about ram per se; they could get it anyway. They care about it because of what (they expect) you're willing to pay for its products. Prices are what they are because people, on net, would rather spend the equivalent they could spend on ram by buying products of ram. Putting this in view to the idea that people don't "afford" things equally: by your assumption, this implies people can indeed "afford" other non-ram things better when it comes to the more important alternatives they could buy with the ram-equivalent funds. Not only do ram-equivalent funds compete with alternate uses, but ram as a factor of production competes with other factors of production. And all factors of production compete, by way of the so-called rich bastards, for your and my dollars. In other words, if ram is more expensive, it is to support alternate uses of ram whose products are valued more highly by consumers than the direct use of ram. And, most importantly if one were to try to get around this higher resulting price for ram, it would cause higher prices for the products of those alternate uses of ram. People would be less able to get the thing they value more highly than ram because ram competes with all our needs, and less ram can be used for its indirect use. All of that is to say that efforts to combat so-called price gouging bounds those who can less afford ram to be in a worse spot than otherwise. They can't afford ram as before, that much is true. But they prefer the alternatives to ram. If they would be better off by having ram, they would purchase that. Waving a magic wand to redistribute ram to them will give them ram, but now they lose what they valued more highly than ram.
- franga2000 11mo ago
  Your logic that OpenAI can by proxy afford to buy out the entire world's supply of RAM because consumers value OpenAI products more than other RAM-dependent things assumes that OpenAI's money comes from selling goods or services to those consumers. It doesn't. The overwhelming majority of people pay zero dollars per year on AI services, while almost everyone spends at least a few hundred a year on gadgets that need RAM and other services that run on servers that need it as well. The money OpenAI is using to starve the rest of us of RAM is coming from pumped up valuation through circular investments, investor FOMO, cheap debt and often straight up gambling. Rich bastards know that they can pump money into the bubble to grow it and hopefully cash out before it bursts. Nowhere in that process did any regular person value AI datacenters over other uses of RAM.

Kbelicius 11mo ago

> The high prices ("price gouging") perform a social function because some cannot afford it; they prioritize what matters to them more, and ram is left available to those who absolutely require it. This is not true at all. It isn't left available to those who absolutely need it but to those who can pay for it. Those are two very different things.

sophrosyne42 11mo ago
You're attempting to construct a notion of need separate from the empirical experience of people's concrete choices, but that isn't possible if you want to be scientific. If a person spends $400 on a phone instead of 32gb of ram, they need the phone more than the ram. If a company spends $400 on ram instead of on some other production good, they need the ram more than the other production good - they expect it to generate more revenue. These two exchanges are not disconnected either: phone prices are affected by revenues of companies which use ram for production. And those revenues are determined by purchases of phones. The person demonstrates through their choice that the use of ram for an indirect purpose of making phones (however indirectly that might effect it) is more valuable to them than the direct use in their computer. The person is not excluded from "having" the ram in the most general sense: they have it indirectly because they benefit from its use in production whose products they value more than the direct use of ram. The person, along with all other consumers, participates in organizing production in the manner that best benefits them, according to their needs, which may not necessarily involve them directly owning the thing.