My analogy is flawed only if the proper economic understanding of price is ignored, and the proper economic identification of value is also ignored. This is why there are books dedicated to explaining what a price means.
The short version - your post totally ignores the fact that price does not refer to a monetary value, but only to value in general. And that value goes both ways, i.e., it has meaning to both parties (buyer and seller) and the true definition who is the buyer and seller is really determined by which party holds the most value.
Logically, it should not be difficult to understand that the party who holds the least value is in the weakest negotiating position and regardless if you want to identify that party as the seller, that party is actually the “buyer” of an offer lower than he wants for his good, even if he identifies as the seller.
Not that simple, if you understand what I wrote above about what a price represents - a value that has meaning to both parties.
The error is your assumption that what the intern has for sale is valued by the targeted buyer (the company) at the price the intern wants. However, the intern is not paid base on what he thinks he is worth; as with all positions, he is paid what the position is worth and valued at.
Worth (pay) is not arbitrary and is not determined by outsiders who have inflated views of themselves - worth is a calculated function based on production of said position and the ROI of that production. If a certain position produces / returns less than what the intern thinks he should get paid, he will be offered or get paid less than he expected.
Therefore, even if the intern is the initial seller, given the situation where an intern erroneously bases his value on something else other than the position, he soon finds himself in the reverse position, i.e., that of the buyer, since the company will not pay him his inflated value. That is, the intern finds himself the buyer of an intern position at a lower pay than he expected.
In a nutshell, whenever a party assumes his value (pay) based not the ROI of the actual position, but on some unconnected outside criteria, he is no longer the true seller, as no one is buying his overpriced goods. He becomes the buyer of the positions, which are available.
Correct, the Mercedes party is the true seller here because he does not give a hoot if you walk out the door, i.e., he is in the strongest negotiating position and the true determinant of the product’s value. i.e., price. They are selling all the cars they can make and another buyer is around the corner. He does value your $70,000 more than the car (that is why he is selling the car), but he values anyone’s $70,000, so if you leave, no skin off his back.
In contrast, the intern, who overestimates what he should be paid (overestimates his value), is not in the same position as the Mercedes seller. Unlike, the Mercedes seller, the intern better take an internship quick at lower pay before the internships all disappear. Since the intern has no bargaining power to get inflated pay, he quickly becomes the “buyer” of whatever internship covers what he wants to learn about.
This is a economically nonsensical analogy, as your assumption that the company is giving away the unpaid internships is beyond wrong, makes no sense. You are confusing price with costs.
It is not too hard to see:
The pay of $0 for the unpaid internship is the price of the internship the intern sees, but that is not the actual value of the position to the intern, only the value the company places on it in terms of what it brings the company re beneficial production.
Value is relative, even for the same price - it depends who is assessing. For the intern to take the unpaid internship, there is a cost, i.e., the opportunity cost represented by the forfeited pay of a paid internship. Therefore, in real economic terms, the intern actually “purchases” the unpaid internship. Even though the company does not get the money in its pockets, it did economically “charge” the unpaid intern for the position; it did not give away the internship.
Hence, in reality, the intern is not a seller here, but a buyer of an internship he sees as more valuable than money he could have made from a paid internship.
Now, why do some interns do this? Very simple answer - they assessed what they would get out of that internship is more valuable than the costs they paid to partake in it. Specifically, the intern assessed the unpaid internship no differently than he would any other purchase, as a trade of unequals where, from his economic vantage point, he comes out ahead.
Again, another erroneous economic assumption that what the intern brings is more beneficial than what the company brings.
It is only exploitation if what is done by the intern during the internship benefits the company more than what is gained from the internship. However, if the company is actually doing the teaching and the intern is doing the learning, then there is a real case that the intern benefits more.
Another irrelevant analogy.
See previous section above. The company is not giving away the unpaid internship, as the intern who takes said internship pays with his opportunity costs, same economic value as money he could has made elsewhere. The unpaid internship is not free.