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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

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.
- sophrosyne42 11mo ago
  What you're pointing to is uncertainty; it is a judgement call whether or not consumers actually value these things. But if they don't open AI will lose money, assuming the market is not interfered with by bailouts, which would indeed hamper the social function of pricing. In a similar manner, this social function is hampered by interventions which manipulated credit and deby. My assumption only works in an economy where debt isn't artificially created ad hoc by the federal reserve and other banks. But that is a problem with how federal policies condition debt and finance in the modern economy, not with surge pricing. I would like to see more criticisms of the fed which essentially bankrolls bubbles like this rather than surging pricing, which performs its social function either way.

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.

sophrosyne42 11mo ago
What you're pointing to is uncertainty; it is a judgement call whether or not consumers actually value these things. But if they don't open AI will lose money, assuming the market is not interfered with by bailouts, which would indeed hamper the social function of pricing. In a similar manner, this social function is hampered by interventions which manipulated credit and deby. My assumption only works in an economy where debt isn't artificially created ad hoc by the federal reserve and other banks. But that is a problem with how federal policies condition debt and finance in the modern economy, not with surge pricing. I would like to see more criticisms of the fed which essentially bankrolls bubbles like this rather than surging pricing, which performs its social function either way.