So a couple of years ago, I was trying to wrap my brain around how a car can be manufactured and sold for around $2,500 USD.  More importantly, if a car can be manufactured at this price, how much more expensive does a car need to be?

The cost of manufacturing anything can be broken down to two basic components:  What the materials cost, and what the labor costs.  Lets include research and development, marketing, and all the other hidden administrative costs in the labor component for the sake of argument.  So what do the individual components of an automobile really cost to manufacture and assemble?  Obviously somewhere in the $2000 range.  If premium materials are used, for the sake of argument, let’s double it.  So the rest is middleman mark-up, and profit.  I get it.

I was looking at a rack full of designer clothes, and figuring that they involve the same process and materials as the clothes you see at Walmart or Target.  Is there really any mass-produced garment that cost more than $10 to manufacture?

So why am I bothered by this?  Perhaps it has something to do with another announcement out of India about the future of tablet computing.  Engineers at Bangalore’s IISc have developed a touch tablet computer that can be built and sold for about $35 USD. 

Compare this to an Apple iPad which retails for about 500 to 700 bucks.  Now I know the iPad would kick this thing’s ass, but is it really 15 to 20 times better?  Keep in mind that you could give a whole class of students this device for the cost of one iPad.  This would allow students who cannot afford technology to keep up with the rest of us.  This will ultimately be better for society.

Ask yourself why we accept high prices and large profits from manufacturers as consumers—and whether a Coach purse holds 20 times as much stuff, or is really 20 times better than the handbag you saw at the discount big-box on sale last week.  At least it makes you feel 20 times better.  Right?