This money isn’t just vaporizing. Someone is cleaning up on these skyrocketing prices.
This money isn’t just vaporizing.
Not all of it, but some definitely is. When the demand is highly inflexible, you genuinely can just vaporize some of that money by fucking up logistics and contracting supply.
If you really need me to dig a hole in your backyard but I suddenly need to use a shovel because my excavator broke – and you still need me specifically to do this job – then you end up paying me an extra $x for the additional hours breaking my back. Assuming a steady demand for my work, I’ve accomplished the same amount of work, been paid the same hourly rate, but you’ve paid more – effectively vaporizing it if you’d expected fewer hours paid. It’s still there, but I didn’t make any excess profit from it, and you lost out.
Iran has been cleaning up on extortion, while this article from The Conversation by Nikhil Datta and Johannes Brinkmann of the University of Warwick goes into detail about how gas stations (not oil companies) have their margins squeezed during rapid price hikes. Haven’t looked into what oil companies are doing with this besides publicly saying “shit’s bad yo” for weeks.
An excavator and a person digging a hole charge two vastly different rates.
Equipment is $100+ an hour, plus the operator at $30+, hole digging can be done minimum wage. If your excavator is broken and you try and charge the same rates, you’re gonna be outta business fast. It’s up to you to be fluid enough and have labour to handle issues like this. Like if it breaks down, you better already have a contingent plan, even if it costs your own paycheque.
That said, companies will do posts holes for $20 a hole with 10 minimum. But that’s free access and an auger only. Removal is on you.
If everyone’s excavators are broken it’s going to cost more for everyone.
People pay more for stuff to get done faster, it’s not always cheaper in the end. It’s just faster and easier, why do you think it’s cheaper?
Physical labour is dirt cheap, sue it’s gonna take 10x as long, but it’s still cheaper than the excavator.
I think her point was that under scarcity prices will go up, if you no longer have the machinery to supply the demand then you might have to pay extra to get priority, I don’t believe the workers will be paid a penny more but the company exploiting them might charge the client more and pocket the difference.
Of course it’s not a perfect comparison in that depending on the demand (whether they can wait to dig until it’s cheaper for example) or the supply (whether there’s lots of unemployed people desperate for money to fill in the need), these factors are fixed in the actual situation the post is about (fossil fuels being in limited supply and in high demand due to the war).
Yes, you’ve found the holes in a simplified toy example meant to convey how complicating logistics can mean neither party in a transaction is benefiting from increased prices.
If you want to join me, there’s a Physics 101 class in the other room assuming a vacuum with zero friction and a simple pendulum on a massless string; we can go point out all the ways their example is bullshit.
It’s actually very simple, excavators are used to get gigs done faster, never cheaper. The person paying for a bunch of diggers instead of the excavator will actually probably pay less, the job will just take a factor of time longer though. But paying 10 guys $8 an hour is cheaper than an excavator and operator! Amazing how your actually asinine example completely falls apart when logic and facts are applied.
You just have no clue about the example you picked, so it’s picked apart easy by people who are experience in that field.
But bloviate, that’ll make your situation better lmfao.
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You realize that the excavator is more expensive so it gets it done faster yeah? Labor is dirt cheap, a dozen guys can do the same thing for a fraction of the price. It’s just gonna take 10 days instead of 1.
You’re just making shit up, and missing every single important point along the way as well. I’m pointing that out, but it’s also not surprising that you missed this…
but it’s also not surprising that you missed this…
missed
Obtuse pedants will really think “Wow, everyone else sure is stupid” because people make simplifications that don’t literally reflect the real world for the sake of an illustration.
Yes, I am aware that the overhead and efficiency of an excavator conspire to elevate the price of the job of digging a simple hole.
In the toy example you apparently didn’t read because you were too busy sweatily crafting a response, this excavator operator charges the same hourly rate “$x” while digging by hand that they did when they were going to use the excavator. That is explicitly unrealistic; the demand in real life is not even remotely that inflexible that they could get away with that. No. Shit. You can’t actually linearize the cost of this kind of inefficiency. There’s no friction, the excavator doesn’t require ongoing expenses to operate, and the string is massless.
You won. You owned the example problem by pointing out that there’s no such thing as an elastic collision. A+. You win physics and get to leave the class. Please.
Do you think typing paragraphs and bloviating makes you seem more intelligent?
Maybe there’s a reason why a “toy example” isn’t a good example to use in these cases, since everyone knows it’s far more complex. You don’t get your point across by missing points and pretending to be simple after the fact, just makes you look foolish and now trying to backtrack. You fucked up, own it instead of backing yourself into a corner.
Do you think typing paragraphs and bloviating makes you seem more intelligent?
The fact you think 180 words is worth remarking on actually explains a lot about why you’re having such a hard time with this.
No, YOU have the money now. It’s not “vaporized”; you fucking made more.
If you were the one that broke the excavator on purpose so you could charge more then you’re a scumbag like Donald
It’s not “vaporized”; you fucking made more.
It’s still there, but I didn’t make any excess profit from it, and you lost out.
Maybe I’ll have to look into the ways literacy can vaporize when you want to be angry and don’t give a shit.
“we” are getting so much money as oil prices go up. I can feel the winning so much it hurts.
