Life is very complicated these days especially so for those who live in highly developed cultures. We cope with its complexity with the help of our computers but much of the complexity is driven by computers and by businesses who decide that complexity is a source of additional profit. The banks have a number of accounts and a person opening or changing an account is faced with a plethora of choice. If you need to use gas or electricity there are hundreds of different accounts you can choose. If you want to buy food there is a huge amount of apparent choice when you shop.
These are fundamental things that we need and although getting them is simple in itself getting them at prices which are fair and reasonable is quite a task. Having made your decision you must revisit it frequently as rates change, good deals become bad deals and new deals become available. Keeping up with changes to these basic requirements is a full time task in itself and most people allow the desire for a less complicated life to take precedence over paying a fair rate. As a result we all get cheated in dozens of small ways every week. Do not worry about it; that is how life is these days. Businesses use choice as a marketing device. Complexity is now a profit centre; the complexity of a deal is a source of profit for the seller.
Filed under: climate change Tagged: | choice, complexity, profit centres, purchasing
Complexity smokescreen pricing works only when there is nothing qualitative to differentiate the products.
It does not work where we buy on price or quality.
In these situations we trade price for quality or vice versa, unless we are being cheated. Here we have a real choice. Foie gras or chicken liver pate.
Electricty is different. It is an essential. There are no qualitative issues, just price.
When energy ministers are challenged about the constant price increases they always say we should change supplier (actually just another middle man) to the cheapest provider. But, we all know that is a fruitless exercise because the tariifs constantly change and the companies act as an informal cartel because none of them really wants to be too cheap. Prices are set according to market resistance rather than based on a reasonable profit margin.
So, the complexity itself is not the source of profit but is a means to disguise unjustified price rises which are constantly ratcheted up to the point just below where we turn off the lights or heating.
Bearing in mind that the gas network is managed by a single separate company one has to ask why do we need 7 or 8 middle men companies to read meters and give us bills. They actually provide no tangible service and give the appearance of competition but not the reality.
However, they do provide profit for companies whose shareholders have not the slightest interest in the welfare of the UK inhabitants. EDF, Eon etc are foreign owned.
Sadly, the prices will keep rising until we change our behaviour and switch off. Only then will the energy companies and governmen take notice.