You guys didn't read what I wrote, and this, frankly, angers me.
I said reasonable profit. You completely overlooked that word. I put it there for a reason.
Yes, O is variable over the long term, but it's still considered a fixed expense.
Sorry, I don't buy the argument that Google and Facebook wouldn't exist. They pay the full expense of their bandwidth now. You don't become a multi-billion dollar company on a $65/month Comcast cable modem connection. They have tens of gigabits per second bandwidth at any given data center. Dedicated. Hell, even a small pip-squeak like Ning does too.
I stand by my statements.
Intel plans to rake you over their coals.
teamtempest wrote:
Tollways, or differential lane pricing, is more and more often cited around where I live as a way to solve congestion. However there seems something wrong about requiring me to pay for a whole freeway via taxes and then not let me use all of it unless I pay even more. If the roadway was entirely user-paid I might not object.
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Actually this is the model used by local state-regulated natural gas company (or it used to be local - now the headquarters is in Texas). My bill has "flat" charges based on infrastructure and allowed profit margin and a "variable" part based on current gas prices and my use volume. A difference is that as sanctioned monopoly everyone is required to be a customer (or do without), and the permitted profit margin still seems relatively high.
So?
ISPs aren't state regulated. Yet, at least. But it's getting there.
Voluntary adoption of this model by the industry at large is a huge first-step to keeping things in private hands. And, if it stays in private hands, there'll be competition.
BigDumbDinosaur wrote:
So, at best, O is proportional to P and more often than not, is escalates faster than P.
Get O under control, and the rest works just fine. If your value of O explodes, then you get what you deserve, as far as I am concerned. That's market economics at work.
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"reasonable" applies and why would (or should) profit be fixed?
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profits must be as high as practical for the industry in which they are doing business as a hedge against inflation and cyclical business downturns
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the company can reinvest in itself, as well as salt away some money to tide it over when business is slow.
Dimitri wrote:
BigDumbDinosaur wrote:
On the other hand, by running with the highest level of profitability possible, the company can reinvest in itself, as well as salt away some money to tide it over when business is slow.
But a company to the same, makes a big nasty capitalistic place run by tyrant according to a whole segment of the population.
Dimitri
kc5tja wrote:
It's funny -- people read what I write and get the wrong message entirely, then turn around and rip me a new a-hole for bagging on capitalism. Yet, a careful analysis will show I'm advocating sound money concepts, sound business principles, and ethical treatment of customers, all the core tenets of a healthy capitalist society.
"Reasonable" profit per the professor was more similar to no profit that the government couldn't in some way tax. At least here in Canada, people are starting to think that a company's job is to employee people and not make a living doing it as your "over charging" for your products if your making a healthy profit. Lousy socialism at work, personally I think its borderline communism if you ask me.
Mind you don't get me started on the line of thinking of "business ethics and morals" the professor and everyone other then me seemed to share. That would be ranting instead of discussion.
Dimitri
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BigDumbDinosaur
- Posts: 9428
- Joined: 28 May 2009
- Location: Midwestern USA (JB Pritzker’s dystopia)
- Contact:
Dimitri wrote:
BigDumbDinosaur wrote:
On the other hand, by running with the highest level of profitability possible, the company can reinvest in itself, as well as salt away some money to tide it over when business is slow.
But a company to the same, makes a big nasty capitalistic place run by tyrant according to a whole segment of the population.
Dimitri
x86? We ain't got no x86. We don't NEED no stinking x86!
Bear in mind, people, that Samuel will have the last word, and his every word must be taken to mean exactly what he intends it to mean...
(I say this not to cause trouble, but for future reference in technical threads. Sorry Sam, but you must have heard this before.)
More on topic, and agreeing with Samuel's idea of "reasonable profit," we should remember that not so long ago there was an offence called 'profiteering' - similarly to the idea of anti-trust, modern societies govern themselves by consent, and if individual advantages become too outrageous, there is a reaction. See also protests, riots, and revolutions. The recent swing towards deregulation, individualism and laissez-faire capitalism hasn't yet played out: it's only about, what, 30 years old?
It's difficult, if not impossible, to take a long view of what the steady state is, because we've so recently moved into the oil age and trebled the world population on the back of that finite amount of readily available energy. It won't last, although I might not live to see the end of it. Anyone here with grandchildren?
Cheers
Ed
(I say this not to cause trouble, but for future reference in technical threads. Sorry Sam, but you must have heard this before.)
More on topic, and agreeing with Samuel's idea of "reasonable profit," we should remember that not so long ago there was an offence called 'profiteering' - similarly to the idea of anti-trust, modern societies govern themselves by consent, and if individual advantages become too outrageous, there is a reaction. See also protests, riots, and revolutions. The recent swing towards deregulation, individualism and laissez-faire capitalism hasn't yet played out: it's only about, what, 30 years old?
It's difficult, if not impossible, to take a long view of what the steady state is, because we've so recently moved into the oil age and trebled the world population on the back of that finite amount of readily available energy. It won't last, although I might not live to see the end of it. Anyone here with grandchildren?
Cheers
Ed
BigEd wrote:
Bear in mind, people, that Samuel will have the last word, and his every word must be taken to mean exactly what he intends it to mean...
It's not so much that I'll have the last word, but rather that my words hold precise meanings in context. Believe it or not, I can be convinced to change my views, as long as you can provide factual evidence to support your arguments. But if we keep changing the meanings of words, then rational discourse cannot happen.
I also strongly value attention to detail. When I write long messages like the controversial post I made, I put effort into making sure I'm as clear, yet information-dense, as I can make it. To have bits and pieces ignored or overlooked really is offensive, because I spend time crafting my message, and not shooting from the hip.
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ElEctric_EyE
- Posts: 3260
- Joined: 02 Mar 2009
- Location: OH, USA
...Some of you think capitalism is that close to communism do you? That you would hate it in such a manner?... Why? Because of our current "leader"?
WE have tech! And beyond a shadow of a doubt have had "tech" since the first wafer fabs, and have shared it! 30 years ago....
We have the best aircraft too! 30 years ago... Consider the SR-71
Who knows what we have now (minus our current "leader" of course), heh!
WE have tech! And beyond a shadow of a doubt have had "tech" since the first wafer fabs, and have shared it! 30 years ago....
We have the best aircraft too! 30 years ago... Consider the SR-71
Who knows what we have now (minus our current "leader" of course), heh!
BigEd wrote:
More on topic, and agreeing with Samuel's idea of "reasonable profit," we should remember that not so long ago there was an offence called 'profiteering'
Profiteering is not too bad. You charge what the market can bear, and if the market can bear that then whats the problem?
If I am making bolts, say for the big wind mills they are installing all over the place and I charge 5,000$ for one, and someone comes around and manages to sell them for 7,500$, why would I be stupid and not raise my price to match what the market is bearing?
Dimitri
You're still earning a profit as a percentage of goods and services sold to a given customer, though. While I detest this kind of behavior (indeed, if I were to discover this, I'd think you were unequivocally subhuman, then maybe go into business undercutting both of you), it doesn't violate my definition of "reasonable" in this context.
The problem comes when you have to enforce Kirchoff's Current Law in the context of cash-flow to cover your expenses. I pay $65/month for my cable modem service (business class). Someone down the street also pays $65/month. I barely use my service. He uses his to near capacity all the time. Thus, you just know that the ISP is using a portion of my proceeds to fund his behavior on the network. Pure capitalism doesn't encourage this, and if I remember correctly, actually opposes this behavior. It's the non-governmental equivalent of "socialized vs privatized" argument. As a manager of several ISPs in the day, I am willing to testify in a court of law that this practice yields incorrect economic indicators of what customers genuinely want, and thus, holds back innovation in the carrier industry substantially. I should note, the USA, for having invented the Internet to begin with, is FAR from the leading nation on access speeds to customers.
How can a company take their profit and reinvest it in their value propositions (e.g., upgrading infrastructure to offer faster speeds and the like, thus benefiting everyone) when they're taking customer A's profit and using it to pay off customer B's incurred expenses? It just doesn't make any sense.
But, frankly, this is the lesser of the two evils. What I singularly object to more than anything else is when the ISP sees wildly disparate levels of profit between us. They know that the potential exists for getting 2N profit, but they're only seeing N (mainly from me, in this example). Thus, the ISP starts to issue TCP RST packets to curtail my neighbor's use (often justifying their actions with wildly and probabilistically inaccurate generalizations of their own users, like, "He's using bit-torrent, so we're just doing our part to curtail the spread of piracy and pirated material"), in an effort to get him to cut his usage back. By this method, they maximize (at least for a time) their profits (read, maximize shareholder value) at the expense of the customers. A precedent is now set where customers are advertised, "Here, get several tens of megabits per second link speeds for a monthly price!", but are condemned administratively, and sometimes even publicly, for daring to approach those contracted utilizations.
Profiteering, in this case, has a DIRECT negative feedback.
That is, I argue, an utterly unreasonable means of earning a profit. People are supposed to earn their profit by the sweat of their brow, not by the end of a tire-iron.
_________________
1. Yes, I just made this up. But, use your imagination.
The problem comes when you have to enforce Kirchoff's Current Law in the context of cash-flow to cover your expenses. I pay $65/month for my cable modem service (business class). Someone down the street also pays $65/month. I barely use my service. He uses his to near capacity all the time. Thus, you just know that the ISP is using a portion of my proceeds to fund his behavior on the network. Pure capitalism doesn't encourage this, and if I remember correctly, actually opposes this behavior. It's the non-governmental equivalent of "socialized vs privatized" argument. As a manager of several ISPs in the day, I am willing to testify in a court of law that this practice yields incorrect economic indicators of what customers genuinely want, and thus, holds back innovation in the carrier industry substantially. I should note, the USA, for having invented the Internet to begin with, is FAR from the leading nation on access speeds to customers.
How can a company take their profit and reinvest it in their value propositions (e.g., upgrading infrastructure to offer faster speeds and the like, thus benefiting everyone) when they're taking customer A's profit and using it to pay off customer B's incurred expenses? It just doesn't make any sense.
But, frankly, this is the lesser of the two evils. What I singularly object to more than anything else is when the ISP sees wildly disparate levels of profit between us. They know that the potential exists for getting 2N profit, but they're only seeing N (mainly from me, in this example). Thus, the ISP starts to issue TCP RST packets to curtail my neighbor's use (often justifying their actions with wildly and probabilistically inaccurate generalizations of their own users, like, "He's using bit-torrent, so we're just doing our part to curtail the spread of piracy and pirated material"), in an effort to get him to cut his usage back. By this method, they maximize (at least for a time) their profits (read, maximize shareholder value) at the expense of the customers. A precedent is now set where customers are advertised, "Here, get several tens of megabits per second link speeds for a monthly price!", but are condemned administratively, and sometimes even publicly, for daring to approach those contracted utilizations.
Profiteering, in this case, has a DIRECT negative feedback.
That is, I argue, an utterly unreasonable means of earning a profit. People are supposed to earn their profit by the sweat of their brow, not by the end of a tire-iron.
_________________
1. Yes, I just made this up. But, use your imagination.
However,
Atleast here, many ISP's have a monthly alottment of bandwith per user that maybe used. Say 60GBs in one month. Therefor Profit can always equal 2N if the cap is maintained once the user goes above his limit.
This allows more regulated and stable profits entering the bussince, and it also allows the ISP to justify price tiers above and beyond just bandwidth speeds.
Dimitri
Atleast here, many ISP's have a monthly alottment of bandwith per user that maybe used. Say 60GBs in one month. Therefor Profit can always equal 2N if the cap is maintained once the user goes above his limit.
This allows more regulated and stable profits entering the bussince, and it also allows the ISP to justify price tiers above and beyond just bandwidth speeds.
Dimitri
Currently mine does, charging something like a dollar per extra GByte of data you use up to 20$. Then no more additional charges, so I figure they are gouging the price of the additional bandwidth just to make sure they make their money so the customer cannot complain to anyone cause its always monthly + 20$ a month max.
Still its very hard to get to use more then about 90GB a month, and that is with watching videos, unless of course you are downloading DVD quality each time.
Dimitri
Still its very hard to get to use more then about 90GB a month, and that is with watching videos, unless of course you are downloading DVD quality each time.
Dimitri
What is the download and upload rates? From that you can calculate the maximum data transfer theoretically possible.
When I worked for CariNet we used to charge $150 for each megabit our customer went over, in tiers. These were data center rates for colocations, of course, but still -- $20 tops for bandwidth excess? That's a steal.
Where do you live? And where do I sign?
When I worked for CariNet we used to charge $150 for each megabit our customer went over, in tiers. These were data center rates for colocations, of course, but still -- $20 tops for bandwidth excess? That's a steal.
Where do you live? And where do I sign?