Honest costs, Closed Market Economics
If we were going to pay for things more reasonably I think we might break them into three groups:
- Environmental Costs
- Human Outlay
- Design Value
I think these are relevant because as far as I can tell so far they represent most of the points of need in a economic chain. The combined cost would look like this:
Amount Paid = Environmental Cost + Human Outlay + Design Value
B2B and other relationship models would also assume this cost system.
Environmental Costs
These are the costs that have been determined by the absolute impact of a thing and all its contributing processes to the environment. A specific value would be associated with these things based on how cheaply they could be cleaned up and then, the money in this aspect of the cost would be used directly for only that. Essentially this cost pays for the removal of the environmental impact of a product. If that is impossible the cost is infinite. (Bad system design. Perhaps that end state could be more elegant later)
Human Outlay
This cost is that of the impression this product makes on the humans in its creation and handling.
Design Value
The perceived value of the design work done in a production cycle. In some respects this is the only subjective part of a pricing I think, though that could just be because I am a designer.
I know that this approach is not very new but I think an point of innovation could be achieved by standardising various things within the system. For instance, each of the cost analysis systems would have standardised and independently evaluated indexes, also the cost of things would be clearly marked on everything purchasable so it would be very clear to people why things cost what they do.
One problem that I am not visiting with this model is the fact that economies seem to have a hard time remodelling fast. I do not yet know how to achieve a model like this, or if it would cause major problems because everything would be too expensive
Labels:
economy,
environment,
human factors,
human rights,
money,
systems
Posts
two things i think you are not covering: resource cost, and also a weird one: popularity. as in the wal-mart scheme, cost often reflects the necessary profit per item. (you know this, but for other readers: if you sell a billion items, you only need to make a fraction of a cent profit per item in order to get rich.)
ReplyDeleteThe things you mentioned:
ReplyDelete1. Resource cost is covered by environmental and human costs. Environmental covers natural resources and accommodation for their use, human outlay covers the manipulation and gathering of materials among other things. In some ways when you buy a product in this system you are giving a little bit of money to everything but your self in the world, and in return you are getting something you want.
2. Popularity, yes prices can change depending on market scale however in this system 2 out of 3 aspects of the pricing are not scale or profit dependent. Environmental cost is actual, no questions asked, it is 1 to 1 accommodation for use. Human outlay is market set of course so scale will not change individual margins, unless it changes the efficiency of the products creation, which would change the margins anyway. This way the system always favours efficiency. The one aspect that is dependent on popularity is the Design cost which obviously in some ways translates directly to the efficiency of the product anyway. However, i am now looking at ways to price design work making profit simply a tool for business improvement and internal education.