Item — HN Reader

Yeah I don't know what this person is on about. Lego is obviously premium and ... charges premium prices because ... they're a business. People (consumers) who want premium products ... pay the premium.

I would be much more frustrated if they became cheaper and reduced the quality of the product.

1 comments

There is a prevalent view of economy that insists businesses sell their products at the minimum price they can still make a profit at (but not lower or you are dumping.) A Marxist view of economy, if I must.

Whenever I meet one of these people, I ask if they are willing to negotiate a wage reduction with his HR. My logic is simple. If you think it is wrong for a business to sell a product at the maximum price they can demonstrably get away with like Lego does, then why is it right for you, a professional worker selling your labor, to sell your labor at a price higher than what is necessary for subsistence?

> There is a prevalent view of economy that insists businesses sell their products at the minimum price they can still make a profit at [...] A Marxist view of economy, if I must.

That's actually how competition is supposed to work in capitalism. If you sell your products at much higher than the minimum price, someone else can make a profit by selling slightly cheaper and taking over your market share.

That's contingent on the competition offering a similar experience and quality, at a smaller price point. As a parent comment pointed out, no LEGO knockoff has been able to provide the same experience as LEGO.

I think what the commenter is getting at is that it's not even about competition. People get mad when companies charge more than is necessary to make what they deem a reasonable profit.

Of course, as you mention, in capitalism, a competitor is free to go in and undercut the leading brand, but they have to be able to sell why they're better AND cheaper.

Interestingly that's one of the Marxist critiques. The market simply is not efficient enough to work fully. The effort to get Lego2 off the ground is simply too high and Lego gets an effective monopoly in their market segment (premium blocks).

If Lego was nationalized then the excess earnings that go into the owners' pockets as dividends or asset value would be realized by the people. But that of course leads to different inefficiencies (investors don't invest, etc...).