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Comment by qeternity | Hacker News Reader

I'm not really sure I understand the outrage here. Just because the marginal cost of something is low/zero doesn't mean companies shouldn't charge for it.

Should an indie software developer using a freemium model be crucified because the binary they ship already contains the code for full functionality? Of course not. The cost is in developing the binary, not in manufacturing it. Same goes for silicon.

Also, "rent seeking" does not mean what most people in this thread seem to think it does. Economic rents are a very specific phenomenon and it simply does not mean charging for something that is perceived as being low/no effort.

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The problem is that this can be arbitrary if the market doesn't supply enough competitors. I don't think Intel is in a position to enforce this, but the competitors that would prohibit them from implementing such restrictions are fairly weak in numbers. AMD alone isn't enough regardless of whether they ship superior products or not.

It also tells me about the focus of Intel and who is in charge of the company. They have many flawed products lately and they seem to not want to compete on a technological level anymore.

That said, proprietary DSP aren't unusual. It would still a shame if they find their way into general computing too a larger degree. Can make sense for the line of XEON CPU perhaps. I just wouldn't buy them really.

> The problem is that this can be arbitrary if the market doesn't supply enough competitors.

What is this referring to? What is the problem? And why is this problem arbitrary?

> It also tells me about the focus of Intel and who is in charge of the company. They have many flawed products lately and they seem to not want to compete on a technological level anymore.

Ok, that's one take and you're certainly entitled to it. As someone who personally had to replace some hardware so I could use ecc ram in a zfs nas for my media server, I would have loved to just pay a few bucks to get a microcode update instead of a full hardware upgrade.

Now, you can complain that ecc should be standard, etc but that's a different discussion. But it's classic economic theory: if Intel can charge some people more for ecc, and charge other people less who don't want it, that is an optimal pricing strategy.

It is where it will end up, and that's phoning home, online verification, and more.

And intel already has parallel software running on intel systems, including access to the nic, which is impossible to shut off at the OS layer, so yeah.. they can do that.

(but outrageous, you say! and people will complain. naw. IME has been around forever, no one cares, it has had zero days, you cannot deactivate it, so a little phoning home and license authorization won't matter. This also means your cpu can expire because intel says so.... )

Fine, I would agree with you on much of this.

But those are different issues. And I don’t think a slippery slope argument applies as you note Intel has been pushing this stuff for a while.

So from a purely price discrimination perspective, I think this is a good thing, even if Intel are doing a lot of other shady things in parallel.

> So from a purely price discrimination perspective, I think this is a good thing

This kind of setup never benefits users. It only allows corporations producing a product for <100$ to sell variations of it up to thousands of dollars. See also Canon cameras or nvidia graphics cards doing precisely that: locking/reducing features via software cuffs (and of course you can find cracked firmware to go around those, just makes it harder).

Greed is a bad way to organize society: it has failed us as a species and threatens to destroy millions of other species along with it. We need to build a needs-based economy that is not dictated by private corporations.

> This kind of setup never benefits users.

You’ll be hard pressed to find an economist that agrees with you.

If Canon sold one camera, they would have to find the profit maximizing price and quantity. By definition this means that single product will have too many features and too expensive for some people, and have too few features for other people who would be willing to pay more.

So instead they make multiple products with different functionality so that people can decide.

I’m surprised to have to be defending greater consumer choice in HN?!?

this sort of "choice" is essentially entirely meaningless, if camera features were software unlock based they could sell all cameras with all features for the lowest price and still make money, the only one benefiting here is canon extracting maximum value.

Making money is not binary. Companies will target the profit maximizing price. Price discrimination allows this to be solved for numerous segments.

Let's say there are 10,000 people who want to buy cameras, a lot will pay $100 for bare bones, less will pay $200 for a few more features, and a few will pay $1,000 for all the features.

If Canon makes one single camera, and let's say they charge the middle price of $200, then the largest market of low-end consumers are priced out the market, while the handful of high end buyers get a great deal.

You might say "oh well just charge the $100 to everyone!". But Canon might actually make more money by charging more and selling to fewer people. They would be dumb not to do this. Price discrimination let's them target all these different price points.

that still has nothing to do with consumer choice, and is entirely about revenue maximization for canon. It is not somehow magically enabling a greater degree of choice.

> It is not somehow magically enabling a greater degree of choice.

What are you talking about? There are 3 camera choices instead of 1.

Would you consider it's more choice if a company started selling fruits where all vitamins have been removed? It used to be the same fruit, but the company altered it to make more profit: it's not benefiting the users in any way.

Economists never produce chips. Nobody is arguing against different models. Interest (not the economic term) for economists seems to be a viable licencing scheme for hardware CPUs. That doesn't help anyone. To be fair, constructive input on the economy itself is on short supply too if you allow me the general condemnation against the branch of all economists if indeed few economists would agree here.

This isn't improving consumer choice, it is how to milk a cow to the largest degree possible. I know you can spin this further that the income would fund new products etc., but at some point it just becomes pure bullshit.

> This isn't improving consumer choice, it is how to milk a cow to the largest degree possible.

I know you didn't intend this as support to my comment, but it does.

> they would have to find the profit maximizing price and quantity

You're only concerned about profits for the shareholders, which i explicitly don't care about (or rather, i care against). I'm interested in the interests of the people, which is structurally at odds with the profits of the 1%.

> By definition this means that single product will have too many features and too expensive for some people

Nope, as someone else pointed out, if there were consumer protection regulations against such practices, you'd just have the best camera for the cheapest price. Because i strongly doubt the manufacturer would sell any model at a loss, which would anyway be illegal in certain jurisdiction (eg. France) as part of anti-monopoly regulations.

> So instead they make multiple products with different functionality so that people can decide.

People empower people. Corporations empower shareholders. Our class interests are not aligned (in fact, they are opposite). It's very rare (if possible at all) to see a private corporation doing something to empower people, except maybe for worker-operated coops (which are not driven by shareholders' profits but by their passion or the interests of their users).

>We need to build a needs-based economy that is not dictated by private corporations.

what does that even mean? As bad as a "Greed" based economy might be, it does provide clear incentives for everyone to follow. How would a "needs-based" economy work?

I think people object to this because it's a step towards moving hardware to a licensing/subscription model. Because, why let someone pay for ECC once and not monthly? Unfortunately, once that is normalized, everyone will want to have a piece of the pie.

Talking about ECC specifically: ZFS does not need ECC more than any other filesystem [1]. Secondly, many Ryzen CPUs do have ECC support.

[1] From the horse's mouth (one of the founders of ZFS at Sun): https://arstechnica.com/civis/viewtopic.php?f=2&t=1235679&p=...

> Talking about ECC specifically: ZFS does not need ECC more than any other filesystem [1]. Secondly, many Ryzen CPUs do have ECC support.

Thanks for this. Yeah I know ecc is not required any more or less and ultimately I switched to AMD for this very reason (despite my comments in this thread, I am not a fan of Intel and own no Intel hardware - only Apple silicon and AMD).

>But it's classic economic theory: if Intel can charge some people more for ecc, and charge other people less who don't want it, that is an optimal pricing strategy.

I did not learn enough economy in school, so is there no limit for this?

Example, I invent a medicine for a rare illness that kills 1000 people/year. It costs me 1$ for treatment but when I want to sell this the money dudes make this calculations:

1 if we sell it with 1$ we earn 1000$/year and we have 0 deaths because all 1000 people afford it

2 if we sell it with 10$ , only 900 people aford it and we earn 9000$ and we kill 100 people with our greed

3 if we sell it with 100$ then only 100 people afford it but we earn 10000$

then the guys make a plot and find that we make more profit when we let most of our possible customer to die , but since we have shareholders and everyone wants money we doom 900 people to death so we can earn 10x more money.

There should be some limits/incentives where such immoral shit won't happen, but so far the only thing I noticed was when asshole was shamed on Twitter for some medicine price increases (I forgot the name).

This idea of a price to be the maximum number that maximizes our profit and not consider any morality is IMO evil. It also has the side effect where you get giants like Google,Facebook,MS, Apple that have too much profit that they use to do evil things, things that free market people consider wrong.

> This idea of a price to be the maximum number that maximizes our profit and not consider any morality is IMO evil.

Yes, it's called capitalism and private property, the two most insane human inventions across history.

> Yes, it's called capitalism and private property, the two most insane human inventions across history.

That's also the system that has produced more wealth and prosperity than any other system in human history. Yes, unchecked capitalism leads to great problems, but there's no such thing as unchecked capitalism anywhere in the Western world today, not even in the US.

The medical company would say they aren't killing people, they just choose not to save them. Whether that's a difference depends on your ethical framework.

But of course most Western countries resolve this kind of conundrum in healthcare with collective bargaining, whether that's at the government level or at the insurance level (which only really works if you ensure absolutely everyone has insurance). If the offer is "we will buy 1000 doses/year for no more than $15 each" the dynamic changes a lot.

Sure, in western countries we have some health care systems, but let's say what will happen in a pure capitalistic system - I wish there would be a game engine or program where we can input an economic/political system and see what happens.

Can we observe this anomalies(giants, monopolies,duopolies, cartels , ) appearing then try different strategies to prevent that to happen? Would be cool to maybe do a search algorithm to find the best strategy to distribute money, healthcare, education to as many people as possible and could be also cool to test your own ideas, like maybe I am thinking that a tax/regulation for X would have some good effect, I could put it in the simulation and maybe discover something I did not anticipated.

Simulating (or predicting/describing) economic situations is exactly what game theory is about. It allows you to basically set up a set of rules, and under some assumptions (everyone knows the rules, everyone behaves rationally, etc) calculate what will happen.

In that context it's important to note that collective bargaining is very much a feature of a pure capitalistic system. Just as the supply side seeks advantages by forming monopolies or cartels, the demand side seeks advantages by forming unions or purchasing pools. Both sides face similar challenges with this, like holding the group together and prevent betrayal (so you have to set up a Nash equilibrium where any one party leaving loses from doing so). You can certainly end up with universal healthcare in a pure capitalistic system because for the buyer side it decreases risk (because of the insurance characteristics) and lowers costs (due to the collective bargaining).

> If the offer is "we will buy 1000 doses/year for no more than $15 each" the dynamic changes a lot.

The dynamic changes a lot because the drug does not exist. It costs $750M to research and develop so nobody bothers unless it's a common enough disease that it can be paid for with what people feel is a "moral price." It seems people only care about marginal cost of production in their moral calculus.

Any business has fixed costs that are ignored in toy examples.

Let's say the drug costs $750M to develop, $1/dose to produce, sales are free and no other fixed costs exist. Let's also pretend that you can sell during the full patent period of 20 years, but expect to be out-competed by generics after that. Also you need one dose per day.

750 million divided by 20 years and 365 days per year is 106000 (rounded up).

The company could sell the medication for

1) $107 per dose, 1000 people can afford it and the company makes $0 profit.

2) $1000 per dose, 900 people can afford it, the company makes $880 profit per dose, for a total of $792,000/day

3) $10000 per dose, 100 people can afford it, the company makes $9882 profit per dose, for a total of $988,200

The research raises the lowest viable cost, and becomes more expensive per dose as you make fewer doses, but with an example as extreme as GPs it doesn't really matter (with the exception that we now have to assume the existence of some kind of insurance with copay, otherwise I don't know how 900 people afford $365k/year in medical costs). And you can still come in with the offer to purchase 1000 doses per day at a price that satisfies both sides.

> ...we now have to assume the existence of some kind of insurance with copay, otherwise I don't know how 900 people afford $365k/year in medical costs

You just hit upon the problem.

> Some families spend thousands of dollars each year to buy orphan drugs, which are drugs that have received a special designation from the U.S. Food and Drug Administration. About 1 in 8 families [with children taking orphan drugs] paid more than $2,000 a year in 2018 – double the percentage who spent that much in 2013.[0]

Put that up against the US median household income of $67.5k (or $46.6k for black households)[1], and you've got yourself a significant expense. Keep in mind, this is only the median income. 8.7% of households make between $15-25k per year[1] and probably can't afford the copays, much less the insurance.

If it's a scenario where it's "take the drug or a kid dies," more than 1/10th of those kids die, absent any outside financial help. And, that would be quite a lot of financial help, too.

Let's not also forget this kid is probably uninsurable, so, they'll have to have group health insurance for the entirre rest of their lives. Better not get fired from your job when you're past 26, kiddo!

---

[0]: https://labblog.uofmhealth.org/lab-notes/big-costs-for-small...

[1]: https://www.census.gov/library/publications/2021/demo/p60-27...

I absolutely agree, the way health insurance works in the US is completely broken. In a flood insurance it's simple, floods are singular events, if you had insurance at the time of the flood you are covered, if you didn't you are not covered (US flood insurance is broken for different reasons, but that's beside the point). With health that doesn't quite work, any system that allows people to enter and exit health insurance at their leisure is sure to be gamed by people who get insurance only while they have health problems. That leads to insurances having the power to screen and reject people, leading to a whole world of hurt and inequality.

The reasonable way to run health insurance is what most European countries do, with various implementations: you get health insurance when you are born, and you can't get out. That way the insurance can actually work as an insurance (averaging out risk), can't be gamed, everyone is covered, and if your work isn't your insurance you have a freer labor market.

What you’re likely to find (and what Intel and others are doing) is they’ll (try to) find a way to sell 100 doses at $100, 100 at $75, 500 at $20, and have some other hardship programs to sell doses at $10 or $0.

That way, they make even more money, which in the scope of saving 1000 lives per year, I’m totally cool with as it tends to support those drugs getting developed and produced.

Which is exactly what happens in the real world. Developing nations do not pay the same prices for medicine that developed nations do.

Wealthy nations end up subsidizing the cost for poorer nations.

>Wealthy nations end up subsidizing the cost for poorer nations.

Or "subsidizing" the new yachts for the big bosses. Also many things were created by scientist from non-western countries, so we poor countries also contributed to those yachts with out taxes to pay the education of our people.

Do you think that without the big dirty profits that are split between billionaires the people that work on science would work on something else, like cooking? I mean why would they care that their boss will have a smaller yacht? I am also assuming that not all people that start a business are doing it for a giant dirty pile of money, most will do it for enough money for a decent life, some are doing it because they want to do something positive, and only the evil bastards will do it to make tons of money by exploiting others.

Since you mention you did not study economics, I will make a small note on terminology.

"Earn" in economics means profit. What you mean, the way it might be said by economists, is you receive $1000 in revenue. That is, funds you get from customers paying for your product.

To go a bit further, you would "earn" that amount less the costs of providing the product, including amortized costs for its development.

Uhh.. this is true.. but it feels like nitpicking.. The OP clearly said the source cost is $1 per treatment.. so it shouldn't make a difference.

It's a bit disingenuous to suggest that Intel's price segmentation is on par with intentionally letting people die.

Look at it from another perspective: Say there's a company making gummy bears, and they sell the red gummy bears for 2x the price of the green gummy bears, although they cost the same in production. Would you claim that this company is acting immorally?

If they ship some red ones mixed in with the rest in the normal bags, and then go around suing people who say "hey you can get some red ones by just buying regular bags" then they would be ridiculed.

>Example, I invent a medicine for a rare illness that kills 1000 people/year. It costs me 1$ for treatment but when I want to sell this the money dudes make this calculations:

This analysis has a fundamental flaw because medical inventions aren't a one time thing, it's a iterated over multiple times. I'm sure the government expropriating the drug and selling it for $1 would produce the best outcomes for this iteration, but what about future iterations? In other words, what about all the drugs that won't be discovered in the future because there's no expectation of returns?

My scenario includes profits in all possible choices, the issue is that some choices have less obscene profits. What would happen is maybe some immoral people would change jobs to the ones that maximizes profit/work done.

I understand that say a business man that is not a researcher will want to put his money into researching the thing that gives him the most amount of money back so there is a risk that all billionaires will leave the big pharma and invest into homeopathic products but maybe we could find a solution, date I say, tax the obscene profits and use the money into research of important stuff?

>My scenario includes profits in all possible choices, the issue is that some choices have less obscene profits.

What counts as "obscene profits"? Purely from a % point of view? What if the drug has high R&D costs? What if they drug have a small patient base to amortize fixed costs over? What if the drug was a moonshot project with little chance of succeeding?

>What would happen is maybe some immoral people would change jobs to the ones that maximizes profit/work done.

But don't we want that? If we want rare diseases cured, we shouldn't depend on the efforts of altruistic researchers alone. Promise of high drug prices allows companies to attract more researchers, both altruistic and immoral/indifferent ones.

>tax the obscene profits and use the money into research of important stuff?

I don't get it. So you're okay with obscene profits, as long as they're taxed appropriately?

>I don't get it. So you're okay with obscene profits, as long as they're taxed appropriately?

No, this was a possible solution

>What counts as "obscene profits"? Purely from a % point of view? What if the drug has high R&D costs? What if they drug have a small patient base to amortize fixed costs over? What if the drug was a moonshot project with little chance of succeeding?

I included all of this.

My issue is with this law of economics "prices should be the maximum possible" so if you notice the R&D, risks are not part of the price, is all about maxing it out at any costs (lives, environment,some laws etc). Of course you should make enough profit to recover your R&D, risks and all the other costs the problem is the economic people will tell you don't stop.

Btw there are people that are not obsessed by making more money, especially by harming others, but I seen a lot of "how to get rich fast" books,webinars etc where some dude will teach you how to sucker others and make a lot of profit.

>My issue is with this law of economics "prices should be the maximum possible" so if you notice the R&D, risks are not part of the price,

Risks are not part of the price, but the max price you can charge (either by caps imposed by governments, or your customer's purchasing power), market size, risk, and R&D costs factors into an overall equation that determines whether a drug project can be funded or not.

> is all about maxing it out at any costs (lives, environment,some laws etc). Of course you should make enough profit to recover your R&D, risks and all the other costs the problem is the economic people will tell you don't stop.

okay but what what counts as "enough profit to recover your R&D, risks and all the other costs", and who decides? currently it's decided by the market. you guess what the costs are, and decide whether or not to develop the drug accordingly.

>okay but what what counts as "enough profit to recover your R&D, risks and all the other costs", and who decides? currently it's decided by the market. you guess what the costs are, and decide whether or not to develop the drug accordingly.

The correct price would be IMO the price you would have is there would be competition, so if there would be 10 others creating similar medicine(or CPUs,phones) and what price you would use to be competitive but still profitable ? That would be the correct price.

What happens is if there is not enough competition you max it up 10 times

In scenario #1, there is no financial incentive (read: livable wages for researchers, manufacturers, etc.) to create medicine because your profit is $0, and we have 1000 deaths because nobody makes the medicine.

In theory if the amortized cost of a dose (including R&D salaries, equipment, drug trials, and manufacturing) is truly $1 per dose for such a tiny addressable market, competitors will pop up all over the place and undercut you on price.

From a game theory perspective, a firm choosing option #3 would lose ALL of their market share to another firm choosing option #2, and would have profit of -$1000 because they are unable to sell any of their doses.

>In scenario #1, there is no financial incentive...

FALSE, In scenario 1 there would be a profit but not the maximum possible profit. This means some dudes will have to use fancy cars and not giant yachts.

>In theory if the amortized cost of a dose (including R&D salaries, equipment, drug trials, and manufacturing) is truly $1 per dose for such a tiny addressable market, competitors will pop up all over the place and undercut you on price.

FALSE, competitors will not be allowed to make this for 10 or 20 years.

>From a game theory perspective, a firm choosing option #3 would lose ALL of their market share to another firm choosing option #2, and would have profit of -$1000 because they are unable to sell any of their doses.

FALSE, if there are 2 companies that sell same products there is an equilibrium where you split the market in half and have both more profits then one dominating the market but with small prices. This is the prisoner dilemma, if you cooperate you get better results for both.

> I invent a medicine [...] It costs me 1$

> we sell it with 1$ [sic]

Your profit here is zero, in your own hypothetical scenario. Help me understand why the Math is different.

> competitors will not be allowed to make this for 10 or 20 years

You didn't mention your stance on patents and/or intellectual property. If a medicine is patented, would you be in favor of stealing the patented ideas from the inventor in order to lower costs for life-saving medicines through increased competition? This sounds nice, akin to stealing a loaf of bread when you are hungry, but I can't help but think a society that condones stealing inventions from inventors would breed many inventors. Then we are left with the "nobody made the medicine" problem.

EDIT: And by "inventors", realistically I mean "firms willing to sink hundreds of millions of dollars into R&D".

I don't think I have a solution, one idea I have but it probably won't work since billionaires would make sure it won't happen, have a more fair taxes, if you made an obscene profit we would tax it and invest in public research. The issue is big corporation hide their profits, are you wondering why is Google, Apple Store taxing me on the sales and not on my profit? they don't want you to hide your profits as they do.

I'm sorry, but if you ship something but lock it behind software, don't complain when people want to activate it. It's like games that offer "DLC" that consists of an unlock key for content that's already on the disc.

We should not make it easier for the corporations to abuse us.

And yes, if an indie software developer ships all the DLC and just sells license keys, I would crucify them. It's not "downloadable content" if you don't actually have to download it.

As far as I'm concerned, if it ships, it's considered part of the base product. Don't want people hacking around to get the things you ship but don't want them to access? DON'T SHIP WHAT YOU DON'T WANT THEM TO HAVE WITHOUT PAYING THEN.

Both are good but somewhat extreme angles on this issue. Look at Tesla for example. You get all the hardware to support self driving but you have to pay a very significant amount to use it. You can be both upset that you have to pay 20% of car purchase price to unlock that feature (considering model 3 of course)- and understand that Tesla spends lot of expensive R&D time to develop it.

Okay it's not downloadable content. It's just additional content which you can buy to access. By having it already downloaded you are improving the user experience.

"Improving the user experience" by making them download extra data that is useless to them unless they pay additional fees? That's a weird definition of "improving" for me. In places where "unlimited" mobile data is not common, this raises costs for people to get the base product, and then they still have to pay to unlock data that is now already on their device.

>by making them download extra data that is useless to them unless they pay additional fees?

We were talking about game discs.

>In places where "unlimited" mobile data is not common, this raises costs for people to get the base product

But it decreases the price of enhancing the product.

>and then they still have to pay to unlock data that is now already on their device.

What's wrong with that? There is plenty of software like that already. Take Microsoft Windows. The whole operating system is already there, you just need to enter a license to unlock everything. This applies to a lot of other software that has some sort of trial.

>don't complain when people want to activate it. It's like games that offer "DLC" that consists of an unlock key for content that's already on the disc.

>We should not make it easier for the corporations to abuse us.

I fail to see how this is "abuse"? At worst the game is taking up an extra 20GB or whatever for a map pack that you can't use. Then again, localization files (for the games that don't selectively download those) are on the same order of magnitude, but I doubt that would garner the same amount of outrage.

>As far as I'm concerned, if it ships, it's considered part of the base product. Don't want people hacking around to get the things you ship but don't want them to access? DON'T SHIP WHAT YOU DON'T WANT THEM TO HAVE WITHOUT PAYING THEN.

So the point of contention is that it's a hardware lock vs a software lock? About a decade ago, CPU makers would disable cores at the software level, which means you could potentially unlock cores if they were non-defective (they often were). Later they caught on to this and physically disabled the core by lasering it off. If I have this correctly, you'd be against them in the first case, but are okay with it in the second case?

>Then again, localization files (for the games that don't selectively download those) are on the same order of magnitude, but I doubt that would garner the same amount of outrage.

Localization files are not normally sold as DLC packages, so that's not the same thing at all.

>So the point of contention is that it's a hardware lock vs a software lock? About a decade ago, CPU makers would disable cores at the software level, which means you could potentially unlock cores if they were non-defective (they often were). Later they caught on to this and physically disabled the core by lasering it off. If I have this correctly, you'd be against them in the first case, but are okay with it in the second case?

I don't like either, but if something is physically damaged (which lasering it off effectively does), then it's more reasonable (and it's not like software could reactivate it anyway). But then again, a core that's "lasered off" is not able to be used at all, even if you pay Intel a bit of money, so that's not the same either.

What I'm talking about are features that are perfectly functioning, that are present in in the hardware/software, but that are locked off because the manufacturer wants to nickel and dime you. The business model of "soft-upgrading" CPUs is garbage for this reason.

It'd be like selling a Swiss Army Knife with 75% of the features physically blocked off, but still present. Would you take issue with someone modifying such a knife to access the parts that are already there?

>I don't like either, but if something is physically damaged (which lasering it off effectively does), then it's more reasonable (and it's not like software could reactivate it anyway).

why is it more reasonable? from a purely rational point of view, there really shouldn't be any difference between a physical method of disabling feature, and a software method of disabling it. Instead, I feel like it's more emotional than anything else, similar to "if I (the consumer) can't have it, they (intel) can't have it either!".

>What I'm talking about are features that are perfectly functioning, that are present in in the hardware/software, but that are locked off because the manufacturer wants to nickel and dime you. The business model of "soft-upgrading" CPUs is garbage for this reason.

Isn't lasering off cores the same here? Often times the cores are perfectly working. The only difference is the lack of soft-upgrades, but the "nickel and diming" arguably still occurs at the point of sale.

>It'd be like selling a Swiss Army Knife with 75% of the features physically blocked off, but still present. Would you take issue with someone modifying such a knife to access the parts that are already there?

No, I wouldn't take any issue with them trying to modify it. It's their property and they can do whatever they see fit. That said, I fail too see how that's relevant to the discussion, and it feels more like a strawman. Everyone in the comment thread is talking about whether it's "right" for intel to do it, or whether people are justified in being outraged at intel. At no point were people arguing for/against "tak[ing] issue with someone modifying such [product] to access the [features] that are already there".

"Abuse" or not - surely anyone can see that Intel deliberately destroying perfectly good CPU cores that they have already made - destroying value - in order to make more money, constitutes a market failure that leaves society poorer even while it leaves Intel richer.

> Same goes for silicon.

Oh no, a big part of the cost is in the manufacturing. A non negligible part is also in logic R&D of course but this is not comparable (at all) with software, where the marginal cost of duplication is near zero. Now your reasoning is still kind of sound despite of this, but historically the customers have not liked that kind of initiatives for processors.

Now I understand that Intel is less good on process nowadays, so it kind of make sense for them to concentrate more on design and on market segmentation at the design level even if that means to make it completely artificial (with SKUs, it could be partly artificial, but you had no warranty to get a chip better than its SKU, with that scheme you are guaranteed to get a chip better than what you can use - if you don't buy all the options, with all the testing guaranteed passed, etc.)

IMO, this is not actually too bad as long as the pricing is not insane, and that depends (partly) on competition. Given some users do not like that approach at all, some competitors could even decide to not do that.

> Oh no, a big part of the cost is in the manufacturing.

Not in the marginal cost which I was referring to. I absolutely know the fixed cost is a large part of this. But high fixed costs encourage price discrimination because that increases the quantity supplied to the market.

The pure marginal cost of fabrication of a modern chips is not that cheap when seen in the context of production capacity (and with high demand you tend to concentrate on high-end anyway), and certainly not cheap compared to software, otherwise you would have even less kind of dies than you have today for the various SKUs, and less recovery strategies for various fabrication defects, plus Intel wants to fab for others, and they do not lead the process anymore. Also if you look at their current list of SKUs, that's already completely insane. Do they really need further discrimination on top of that and will they be able to extract tons of value? I'm not so sure.

Thinking more about it maybe they simply want to keep roughly the same amount while doing less masks than usual because masks became crazy expensive. Would be interesting to look at some figures.

> The pure marginal cost of fabrication of a modern chips is not that cheap when seen in the context of production capacity

I mean, cheap is relative...but given the tens of billions needed for a fab, versus the tens of dollars of silicon, power and labor to produce a chip, I would still argue it's cheap.

> Should an indie software developer using a freemium model be crucified because the binary they ship already contains the code for full functionality?

Funny, but before the washed out "indie software" term caught on, people called these sorts of shareware programs "crippleware".

Which is basically what Intel is doing here, even if they claim they sell you additional features in reality they ask you to pay them for uncrippling their hardware.

And at least with crippleware you got the program for free.

>Economic rents are a very specific phenomenon and it simply does not mean charging for something that is perceived as being low/no effort.

I've seen this meme lately, always in defense of said "rent-seeking" behavior. But Wikipedia says: "economic rent is any payment to an owner or factor of production in excess of the costs needed to bring that factor into production" - in other words, exactly this.

Love when all the liberal free market people here complain endlessly when the free market and corporations optimize for their profits. It's good for everyone, they said! Deregulation is good, they said! Corporate control of western governments is fine, they said, through the corporate controlled [1] media!

1. https://fortune.com/longform/media-company-ownership-consoli...

Except you are someone with "direct knowledge of the matter", you should not invent justifications for Intel's pricing strategy. If we knew specifically why they chose this strategy, then thats another matter. What I do know is that as consumers, we would definitely like to pay less if we can just like the company/vendors would like to pay more. Advocacy on behalf of corporations only serves to reduce our leverage in this regard.

Modern Day Tech people seems to have this traits where everything should be free. Without ever giving some thoughts on how business and economics model should work, while getting $200K for entry level junior job from MAMAA. It is strange and I cant comprehend why this is happening.

Assuming this could be done securely and somehow even on core count. Cloud vendors no longer needs to provision dozens ( if not hundreds ) of different SKUs, they could simplify their hardware unit to a few with maximum cooling installed. And be able to change and adopt requirement with software. Shortening lead time and capacity planning.

> Modern Day Tech people seems to have this traits where everything should be free.

How do you conclude like that from the current discussion? People seem to be arguing that they should be able to own things. Not that the things should be free. Do charge me extra for that extra hardware feature, but don't do so monthly.

Not the current discussion but just the general trend of discourse and observation. All Ads are bad, we should live in an ad free world. Charge for content and yet proven not to be a business model for a lot of media. ( It only works on Financial Times and the likes )

ISO standards should be free. Who is going to paid the employees of ISO organisation? 5G Patents are scam, why should they charge for standards usage? Who is paying for the Tech innovation within University Research and Telecom Industry spending billions every year. And the list goes on and on.

There is clearly lots of value these brings to the table. I just dont understand why they should be free. And Why is this Intel Software activated Hardware Rent Seeking? The BOM cost of an Intel 10nm inclusive of testing and packing without their Foundry margin is practically a few dollars per core. One could even argue have all the different SKUS have different set of operational complexities. So why is this wrong?

> Not the current discussion but just the general trend of discourse and observation.

Seems like a strange place to vent arguments for an unrelated discussion, then.

> And Why is this Intel Software activated Hardware Rent Seeking?

It's not. But if it's charged on a subscription basis, it obviously is.

>Seems like a strange place to vent arguments for an unrelated discussion, then.

Sort of. But all the examples I gave were mainstream comments on HN. And in many cases I would argue they are the only allowed views on HN judging from downvotes. ( Along with the rest of the internet )

> Modern Day Tech people seems to have this traits where everything should be free.

I don't see how that's related, but sure. But it's not just younger folks, i remember when i was younger reading quite a few sci-fi novels about how tech would enable us to live in a paradise of abundance (asimov, anyone?).

Is there a reason, in a society of abundance such as ours, why food, housing, health, and education is not 100% free? No, the only reason is "fuck you" and young people are right not to find that OK.

People on average need to do some work, but we do a lot more than the minimums.

We live in a world of practical abundance relative to any other time in human history. The reason everyone doesn’t work a 10 hour week is we want a higher living standards which is an endless cycle. In the 1400’s we didn’t grow enough food for everyone to be fat, let alone the extravagance of modern healthcare etc which is part of the minimum standards everyone wants. Yet compared to the entirety of human history things where generally going well back then.

The total life savings to live like a 1920’s hobo is shockingly low. Save up ~20k and retire to a life as a homeless vagabond simply isn’t appealing. Even extreme FIRE devotees generally aim for not just a shack somewhere but all the amenities of a modern lifestyle.

The unavoidable reason it’s not free is that it takes the labor and energy of others, neither of which is free. How many acres are you personally willing to farm every year so that I can eat for free?

Of course i'm willing to do my share. And i hope you'd do yours, as well. You'd be surprised how little time it takes to feed everyone. A small portion of the population in the Global North is responsible for feeding everyone, and still most of the production is wasted in animal exploitation (feeding cattle to then eat it is really not resource-efficient if you look at it from an energy transfer angle) and food waste due to the capitalist distribution system (every supermarket needs aisles overflowing with food, 20-50% of which gets thrown out).

Of course, the western "green revolution" model of industrialized monoculture is not the way to go as it has shown over the decades that it degrades the soils and renders them sterile and dry (which is starting to be a big big problem here in western Europe). But permaculture techniques can yield the same order of magnitude of foods in a much more eco-friendly/diverse and health-friendly manner (such foods are much richer in vitamins/minerals).

Let's say i would be willing to give 1 month full-time work every year to help feed everyone. Although from my experience working the fields, i believe that's way more than what would be required. But then, if you really insist that you don't want to work the fields, i'm sure there's probably other ways for you to contribute to society. Maybe you're a good cook? Or know some medicine? Build some cool furniture? Play nice music or recount interesting stories?

In the end, nothing is "for free" because we need to spend time on it. But everything is "for free" because time does not cost us a dime and is easily shared with more people. Arguably, we could maintain our modern lifestyle working ~1 day per week [0] by just removing useless work/jobs. If that were the case, wouldn't you be happy to do your part so that everyone can eat?

[0] Many serious scientists predicted it over a century ago. But the increase in productivity per worked hour has not led us to work reduction but to creating "bullshit jobs" that do not produce anything: accounting, marketing, managers... all of these jobs are only required in a capitalist system but produce exactly 0 value for workers and end-users. Of course, "maintaining our modern lifestyle" with less work does nothing to break our dependence on extractivism and oil/gas as energy source, which we should probably do something about very fucking quickly.

> Just because the marginal cost of something is low/zero doesn't mean companies shouldn't charge for it.

It definitely should. That's why some of the money collected beyond the "marginal cost" is invested in R&D (capitalism 101). Of course entire industries (health, IT, concrete..) have been used to living off siphoning public money from corrupt officials as grants and partnerships for R&D so they don't have to worry about anything but maximizing profits for their shareholders. But where is that model taking us?

> Should an indie software developer using a freemium model be crucified because the binary they ship already contains the code for full functionality?

Sure. Why is freemium even a thing? Would you imagine a music CD where a paid unique key is required to decrypt the 5 last tracks? Or a restaurant toilet where the toilet is free but you need 2$ more for toilet paper?!

In principle, everything should be free for everyone because everything belongs to everyone. But even if you don't agree with this principle (why?), freemium is a fucked up model that only incentivizes producers fucking over users some way or another.

> Economic rents are a very specific phenomenon and it simply does not mean charging for something that is perceived as being low/no effort.

As an anarchist, i understand "rent" to be artificial value derived from "private property". Private property by definition is just a religious belief (materialized on a piece of paper, and guarded by the holy crusaders of the police), and does not involve efforts.

The efforts to conceive and build the product (whether it's a CPU or a house) were provided beforehand, and by a different group of people than those reaping the benefits of this "rent". That's precisely why "property is theft": it creates debt from the users of a resource, to people who did not work to produce it (if there was any work involved at all, which may not be the case eg. for land ownership).

> In principle, everything should be free for everyone because everything belongs to everyone.

Awesome. If I DM you my address, will you please ship me the device that you’re posting this from. It actually also belongs to me.

Tongue-in-cheek answer: you'd be disappointed in my laptop. The keyboard has half missing keys, and it's an old Core 2 Duo with 4GB RAM. Residing in southern France, it'd probably be cheaper and more eco-friendly to find such hardware in your area ;)

Serious answer: you're confusing private property with possession (usage-based property). Private property is the State-mandated religion (with which we're all brainwashed throughout school and on television) that says a piece of paper dictates who can or can't use a certain resource, and that the people who use it (eg. tenants) can't necessarily decide for it. Anarchism doesn't stand against personal possessions (everyone sleeping in dormitories is a McCarthyist strawman), on the contrary, it stands for the idea that the land belongs to whoever lives/works it. Your house is your house not because a piece of paper says so, but because you reside in it. A peasant's land is their land (whether individually or communally) not because a landlord said so, but because they work and care for it.

Another way to look at it, is that if you are not a direct user of a certain resource, then you have no say in how it should be used. Why do the State and big corporations get to decide on how our neighborhoods should be managed, or to extract certain resources and pollute our water streams? Such decisions should belong to the people directly, not to some remote entity claiming legitimate exercise of power over the people.

>Why is freemium even a thing? Would you imagine a music CD where a paid unique key is required to decrypt the 5 last tracks?

Have you heard of... radio? ie. "you can listen to these songs for free, but it has ads and the rotation is random. alternatively you can buy the CD and listen to the same song any time you want without ads".

>In principle, everything should be free for everyone because everything belongs to everyone. But even if you don't agree with this principle (why?),

If everything belongs to everyone, it leads to a tragedy of the commons situation where everyone does the bare minimum, because there's no reward for doing more.

> you can listen to these songs for free, but it has ads and the rotation is random

The radio stations i listen to have exactly 0 ads (rely on donations), unless you count as "ads" messages they haven't been paid to spread. Also worth noting, i personally don't consider ads as a freemium model, because the song is the same whether you bought the CD or listen to it on the radio. Whereas in the software world, the program is limited in the free version.

> tragedy of the commons

That is a largely exaggerated capitalist meme. I'm not saying it can't exist, but many areas of life throughout human history have been managed communally without any such tragedy so there's definitely ways around this problem.

> everyone does the bare minimum, because there's no reward for doing more

As someone living in free communes for a long time now, that's definitely not my experience. Yes, there will always be one or two people (and not necessarily always the same) doing little, but in my experience people can't stand doing nothing for so long. We all crave to be part of something and contribute to making life better for everyone... just try to play video-games non-stop and you'll see after a few months you'll want to do something else ;)

Also, in a free society, the reward for doing something, is the achievement of the task itself. In a capitalist society, tasks are rather meaningless: we do something useless, to get paid, to achieve some actual goals of ours. In a free society, we gather and decide on goals that make sense to us and how to reach them: there is less layers of indirection and a much tighter feedback loop which is much more rewarding than working for a boss.

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