Water allows you to live. Should the water company raise the price to €1000/liter ?
If the software took you 5 years and €1M to produce, I as a customer will balk at any cost-plus price as my expected business value of using the software is say only €0.5M. But if you spread your costs over a hundred customers by copying (and maybe servicing) the same software, you can charge €0.1M from 100 customers, giving you €9M profit after your expense, and allowing each customer to derive around €0.4M business value. The value for both the producing and consuming side of the software was significantly increased simply by copying some bits :)
Then we don't have to discuss which price is fair. Maybe some of them want to sell water at 1k/litre. Others won't. The market will figure it out.
This is price fixing. If microsoft and apple collude to fix the price of an engineer, you outcry. If you discuss what utilities should cost, prices fixed by monopolies is somehow ok.
That's why politics doesn't work. Not a lot of people have the balls to vote on principles instead of what they want for themselves.
And we don't have water utilities at all - I have my own well and septic system. Like all my neighbors. So in a sense there are many water companies?
If utilities are operated not for profit but as a form of charity, pricing of their services should be determined by how much they need to charge in order to stay in business (as low as possible). -> that makes arguing over pricing based on value irrelevant.
Anyway, agreed.
There's nothing wrong with that. I'm just saying that a monopoly that is not maximising its profits acts in a charitable way. Either by choice or by force. Kinda irrelevant.
The only reason they are selling the CD's for too much money is because there is no competition due to a government-granted temporary monopoly. The scarcity on that market it completely artificial.
I think a lot of these relationships are very adversarial and people, companies included, don't have much of a choice in the absence of a wide reaching and binding understanding.
Thank you for proving my point: if it's scarce (only one company can make it) it has value. So the argument that the value comes from 'what it allows you to do' (not die) is bogus. Water allows you to survive so if utility determined the prices water would be extremely valuable, but it isn't.
$1000 water is ridiculous, but I'll bet that if I drop you in the middle of the desert, after 24 hours you'd be willing to pay $1000 for a liter of water. Yet it's the same water, you need it to survive wether you're in middle of the desert or at home. Clearly utility has nothing to do with value.
On the other hand, if I could do so, I'd just beat you up or worse and take that water. Which is what ends up happening when you see instances of piracy and IP violations around the world.
Eventually pricing also has to take into account, the point at which robbing you would not be worth the hassle for me, and we'd all be better off conducting a transaction. For example, GoG and Steam in the video game business.
There's a saying about "a man knowing the price of everything and the value of nothing", that you might want to consider. By the way, if your toilet-as-a-service is always magically clean, nice smelling and stocked with a never-ending supply of toilet paper, I might very well be interested :)