Bringing forth the light of holy economy

As you might recall I've been playing Planeshift of late. Here's a little gem of a convo from half an hour ago :

Hirene Hi, do you sell iron?
You Well yea.

Hirene For what price now?
You 1125, but I'll give you a load at 1k cause I'm bored of the arena.

Hirene Ah, I see. That's too high price, sorry. I don't have time to spend on riveting them and sell for higher price than I bough. I still can offer 750 for each.
You Prolly time to bump up prices. You're selling at a loss if you're selling under that anyway.

Hirene Who sells at a loss?
You If you use 10 steel to make something and sell it for less than 10k you're making a loss.

Hirene The basic idea is to get the same profit for the miner as well as for the crafter.
You This idea is sound.

Hirene Both have to spend time with his work. One to dig the ore, second to make something worthy from it.
You Indeed.

Hirene If you are a blacksmith, you can sell steel for 705 tria. If you are an armor maker, you can sell your chain rings for 910 tria. If you are an armor maker, and will spend more time to rivet your rings, you can sell a steel 'ore' for 3040 tria. But riveting takes too much time.
You The prices are no good. This system has a lower bound : how much money could either make hunting. I make about 90k hunting in the time it takes me to make ~80ish iron ores. So then iron ore will have to cost ~1125ish.

Hirene Yes, but you can't compare those.
You I can and I do : unless mining pays me as much as hunting, I hunt.

Hirene Then don't mine at all. Hunting is always more profitable than digging or crafting anything.
You Nope. Prices for crafting have to go up until they are high enough to cover miner and crafter cost of opportunity.

Hirene But they don't.
You Well then what can I say. I won't sell ore at a loss.

Hirene If you make chain mail armors, and sell it, you sell irons for about 135 tria(!) Chain mail armor prices are just insane. Blame devs. I made a flyspray entry about it 1 year ago, nothing has happened.
You You will have to sell for more I guess. Prices have to allign. There's no other way. Economy is economy.

Hirene Not in PS :) They consider the needs of the new players :)
You Well okay. I got my axe to 50, and I'll get it to 200 before I mine unless mining is equally proftiable. That aside, once mining is equally profitable I can do about 3-500 ore a day.

Hirene Crafting is for fun :) Not for making tria.
You I can't have fun behaving uneconomically.

Hirene The best thing you can do in crafting if you reuse your materials till you reach your desired level. Selling those is nothing more than wasting effort. And making a complete chain mail set takes about 3 hours. In real time :)
You And how much steel ?

Hirene Strictly it's 180 molten steel.
You So then you have a good case for asking 500k tria per set, as a minimum. ~200k for the iron you need, ~300k for your work.

Hirene Yes, because in that time you could rivet those rings to 304 tria. That is 547200 tria. I ask 550 tria for an armor or 350 iron ores. So, if I would simply sell the 180 steel as rivets, I could make 547200.
You So then... you agree 1 iron ore is worth about 1x00.

Hirene No, because you omit the time factor. We are talking about 3 hours.
You But you said 550k tria or 350 iron ores. That's 1570 each ore.

Hirene This isn't true, because I could mine the irons for myself. I don't remember now exactly how many time it takes. Maybe about a hour.
You That has no bearing. Since you offer X or Y, then X = Y. Else you'd offer something else.

Hirene Well, calculate the time factor in your formula to get the correct prices. 1 hour for digging 180 irons, and 3 hours to make 540k from it.
You There's no time factor. If you sell an item for either 550 X or 350Y that means Y = 550/350 X.

Hirene There is. As you calculated, you can make 90k in a hour or so by hunting.
You Which is why i only ask 1125 tria per ore instead of the 1570 that comes from your formula.

Hirene You will not find buyer for that price. They buy irons for that price only if the goal is powerleveling. Then tria doesn't matter.
You I don't care. It's what it costs.

Hirene No, because you compare two different things. Hunting and digging. Hunting is more profitable than digging or crafting. Consequent: don't dig, but hunt.
You There's no reason why it should be more profitable. For as long as it is more profitable, I'll hunt.

Hirene It's a known problem in PS economy. That's why crafters dig for themselves.
You That's ok then. The problem would be that crafters don't want to pay fair price for ore so they have to dig it themselves, and pay themselves 50 tria or nothing at all on their own mining.

Hirene 750 is already a fair price. At least from the viewpoint of the crafter. Works only for armor makers.
You You're not the one that says if its fair or not. I am.

Hirene Sword makers can't afford that price.
You Probably because they sell the swords too cheap.

Hirene We are talking about NPC prices as base. Basicly an iron ore is worth 80 tria.
You I don't think anyone sane cares what the game authors think things are worth. They obviously have no clue.

Hirene A crafter can make 607 tria from that... but for that they have to train a lot. You also avoid this fact from your price calculation.
You Certainly. It has no bearing.

Hirene Anyone can dig ores... but not anyone can make 705 tria from that.
You Well, anyone can mine but nobody wants to apparently. When that happens the reason is that the price is not high enough.

Hirene You are right, but devs think other of it.
You Not much they can do about it. Prices are what players say they are. No big deal anyway, this past week i looted about 1.6mn trias worth. About 700k of that went to my training, I have 300 strength now. The rest is in unidentified swords axes etc in my vault.

Hirene Maybe the problem isn't the low ore and NPC prices, but the high loot rate.
You They're the same thing. Basically loot generates inflation in the game, and loot is the basis of all game economics. So, the more stuff loots, the lower the value of a tria.

Hirene No, not inflation. But makes professions to be dead. like digging.
You I don't see why. Prices can just reallign. A set of ultimate armor can easily cost more than a day's worth of looting. In most games it does. The problem is that the playerbase is small and just a couple of people acting uneconomcially can ruin the entire economy. But this won't last forever.

Hirene Well, there was a player who already left the game, an armor crafter. He sold his armors for 1 million - 1.8 million. But at NPCs a complete Q300 chainmail armor is worth about 80k or something like that.
You W would you sell it to a NPC ?

Hirene Well... to be able to reach that level when you are able to craft HQ things, you need months of training and a lot of tria. If you would work only for players, you would never reach a decent level in a skill. And believe me, noone buys a Q185 armor or weapon. Everyone wants the finest one.
You Yes well, people are free to want whatever. Everyone wants free Ferrari too.

Hirene Also the weapons and armors are not wearing down so fast, that it would be profitable for crafters.
You Because not many players.

Hirene Because there're a lot of crafters can make Q300 things.
You This is the problem of the frozen raw material market. Anyone who can mine would rather become a crafter than sell ore too cheap. I know if I ever run out of things to hunt I will simply use my money to push up my crafting.

Hirene Yes, you should try some crafting to understand how it works :)
You I've made my own sabres.

Hirene Sabres? Aren't you using axes?
You Well I made a few just for practice.