Comment Re:Capitalism wins again. (Score 2) 149
> a) The motivation under capitalism is maximizing profits, not revenue.
Profits and revenue are functionally the same for the purpose of most discussions, however yes it's a valid and often employed tactic to charge the same price while providing less value, which increases profits at the same level of revenue.
> Consider the scenario where you capture all of your customers' surplus...
From John Deere's perspective, the optimal strategy is to corner the market on farm equipment that are strictly necessary for society as we know it to continue to exist, locking out all competition from all related revenue streams. From supplying the machines, to supplying the parts, to making sure they get a cut of any money to be made servicing the machines. They are not trying to minimize the profits of others, that's just the natural consequence of elbowing everyone else out of the market.
> Enlightened self-interest drives you to keep your customers and suppliers profitable.
This logic breaks down when demand is highly inelastic. If your customers need what you are selling, then there is less incentive to keep them profitable and really only the incentive to allow them to continue to exist. Oh, can't afford my fees? Well too bad, go into debt or die. Turns out most people will choose debt before death.
=Smidge=