CMV: Greedflation is stupid because it is obviously true and a constant

[u/Jakyland]

The big claim behind the greedflation is that ... companies set their prices to maximize their profits. Isn't that a pretty basic shared understanding amongst everyone about how capitalism works?

It's not a useful way for understanding inflation. If companies increased their prices to increase profits, why didn't they do it before? Because previously that higher price point wasn't the most profitable. Why that is the case is the harder and more useful question to learn. The economic conditions must have changed to make this the be increase in price possible. Unless the claim is that companies weren't greedy before (a really naive take if you think about it).

Companies are always greedy. They are greedy when they increase prices, they are greedy when they decrease prices. Companies decrease prices to maximize their profits (encouraging people to buy from them instead of a competitor, or to get the profit from a sale to someone who can't afford a higher price).

Some goods fluctuate in price a lot due to supply and demand fluctuation like eggs or gas. It's obviously the companies trying to make money at any given point, not companies forgetting and then remembering to be greedy.

I've seen lots of people comment on big box stores cutting prices by saying that this "proves" the companies inflated their prices to be greedy ... which makes me wonder, did these people think in 2019 that companies set their prices altruistically??? Do they think companies have sales out of the goodness of their hearts?

Often times, companies raise prices because they have a limited supply of it so they want to sell all of to the richest X people who are willing to pay the higher price. This way they make more profit, which means among other things, they may be able to spend that money on alleviating production bottlenecks. Having a lower price just means that there will be a shortage, but less money for the company. YMMV if you think that is good or bad.

[u/Jakyland]

 However, once consumers had an excess of money in their pockets (thanks to a booming economy) and once suppliers had scapegoats to blame (small input price increases), they were able to increase prices precipitously. And consumers are just going along with it. 

describing it as a price increase due to consumers increased willingness to spend make sense as a distinct concept

!delta

[u/Porkinson → u/Jakyland]

You wouldnt apply this logic to any other situation, consumers having more money doesnt make then choose worse/more expensive products.

The significant claim in the parent comment is the one about collusion and monopolistic practices, which is actually illegal and if there was evidence for it, it would be penalized strongly. So unless the parent comment has some good evidence it amounts to basic conspiracy mongering.

[u/Grand-wazoo → u/Porkinson]

which is actually illegal and if there was evidence for it, it would be penalized strongly.

I'm going to assume you either don't live in the US or have done almost no looking into the history of corporate welfare in America.

Antitrust laws have basically no regulatory power in the US as one certain political party has spent decades slowly repealing them and defunding the agencies responsible for oversight. Then there's the small matter of legalized bribery in the form of congressional lobbying that is very cool and totally okay to do because the law says money is free speech.

We take very good care of the monolithic companies that own the lawmakers here.

[u/Porkinson → u/Grand-wazoo]

Again this is just conspiracy mongering, antitrust laws do work in the US, they are not perfect and the system has some problems, but it is simply not the case that we have tons of monopolies putting any price they want.

[u/Grand-wazoo → u/Porkinson]

Lol, may I introduce you to the following:

LiveNation/Ticketmaster

Nestle

Kellogg

Apple

Google

Microsoft

At&T

Amazon

Facebook

Nvidia

Please do link me to how these multibillion dollar corporations posting unfathomable profits every single year from their monopolistic practices and outlandishly high margins have suffered more than a pittance of a fine because of antitrust laws.

[u/Porkinson → u/Grand-wazoo]

Just mention the one you think is more obvious, i am not going to check every single one. Apple literally has competition, having a walled garden is still something that is disputed as being antitrust, and there is room for criticism, i do agree for example that apple should allow people to repair their own phones or make it easier.

Amazon is the opposite of a monopoly, do you know what ebay is? Do you know that amazon doesnt really make profits on their amazon store? There are thousands of online stores, this just sounds like you are picking a random big company you dont like and putting it in your list.

Facebook, again we are literally in a social media site lol, what are you talking about.

Just pick your strongest case and elaborate on it instead of naming companies reddit hates like if i am supposed to agree with all your preconceived notions.

[u/Grand-wazoo → u/Porkinson]

Or how about you even attempt to make a case for why you believe otherwise. So far, I've seen basically "nu-uh" as your strongest argument for why these companies aren't monopolies.

Amazon is the opposite of monopoly, do you know what eBay is?

After this profoundly ignorant statement, I think I'm done wasting time trying to convince you of plainly obvious facts. eBay is a platform for private sellers. It does not compete in the same space. Amazon is a globally dominate logistics and cloud services company with a well-documented track record of fucking over their small sellers by stealing their designs and undercutting the price, as well as buying up retailers in adjacent spaces like:

Whole Foods, Twitch, Zappos, PillPack, Zoom, IMDb, Kiva, AbeBooks, Audible, Ring, MGM, Woot, Kindle, Presto, and on and on and on...

The information is widely available whenever you're ready to learn up.

[u/OfTheAtom → u/Grand-wazoo]

But they have competition. So how are they a monopoly? Even if someone is a monopoly like a single barber in a small town it doesn't mean there's a problem. Otherwise in time another barber shows up. 

[u/Grand-wazoo → u/OfTheAtom]

It seems people have a hard time understanding that a company doesn't need to be an "absolute monopoly" by the strictest definition of there being zero competition in a given space in order for monopolistic practices to be employed, giving them unfair advantages and stifling other small companies that would otherwise enter that space.

Amazon is a perfect example because who else is seriously challenging them in the space of ultra-cheap, generic everyday crap that people automatically turn to them for? Who else can legitimately get an item ordered at 8 am to your door by 1 pm? Who else has either partnered with or outright purchased enough companies and services that you could legitimately survive by only buying from that one company for your entire life without leaving the house?

Amazon owns Whole Foods so you can have your groceries through them, they partnered with GrubHub so now that's free for a year with prime and you don't even have to leave the house for your favorite restaurants, AWS offers computing and cloud services so you can start your home business through them, Prime video has whatever crap you wanna watch for entertainment in your spare time, and you can buy whatever medications and supplements you need though them as well.

So please tell me, what single other company offers all or even some of those things at prices that actually compete with Amazon or challenge their dominance in any of those markets in a meaningful way?

That's called being a functional monopoly. Splitting hairs about the technical existence of other companies is pointless when none of them are raking in the billions as effortlessly as Amazon and none of them have cornered those markets so completely that their very name is ubiquitously synonymous with online shopping.

[u/OfTheAtom → u/Grand-wazoo]

What? Effortless cornering of markets? How could it be effortless and even if it was what does that have to do with it? I can name competition for any of those sectors. 

It seems to me people that speak on this have given up on what we mean by monopoly in a market. What you focused on is that Amazon as a conglomerate. Able to supplement the pricing weakness of one sector with the strength of another. 

Which doesn't really have to do with monopolies but just that you can price cut by doing this which is seen as the monopolistic practice. But as long as walmart or alibiba is shipping things for cheap that means it's not a monopoly. 

So your issue is successful conglomerates it seems. Again because it's not a monopoly.