House of Eratosthenes

Years ago I had learned, along with many other people interested in the subject I suspect, that the forces at work in an economy are supply and demand. My learning was that they are like at opposite ends of a seesaw. If one is in ascension then the other will be in a state of descent, both of these have some effect on the price of a product or service, and eventually things will stabilize — supply, demand and price. If we’re looking at a commodity on the stock exchange, then this search for supply/demand/price stabilization will be renewed daily. Also, an abundance of the one will intensify the power exerted by the other: If many people are demanding a certain item, and there is a limited number of suppliers of it, then the price will go up. If there are many suppliers and only limited demand, conversely the price will go down. This results in signaling. An “economy,” when you study it awhile and think about it awhile, turns out to be nothing more than a network of those signals. Because of this signaling, the tendency is toward benefit for all because the supply will respond to the signals; people will labor toward creating whatever it is that other people need. They’ll move their vocations around, away from the products and services declining in price due to this signaling, toward the products and services that are becoming more precious, so that abundances are relaxed and scarcities are cured.

My new word describes, essentially, a newer economy in which this circuit is being shorted because the whims of the suppliers are unnaturally affecting the nature of demand. Retail consumer technology has devolved to become a good example of this. When a new phone comes out and people line up around the block to get hold of it, there is no tug-of-war between supply and demand because the supply is the demand. Apple made something; I want whatever it is. Have no clue what it does. I just want it.

It can work the other way too. Let’s say my lawn is too big for me and I need to have it mowed. This is one of those jobs Americans won’t do. In that classic economy loaded up silly with signals, there would be no such thing. We lawn-owners would have trouble getting someone to cut the grass for a little while, then we’d offer a bit more money, and more, until finally some intrepid hard-working kid says “Okay, I’m in.” But nowadays, they just don’t wanna. And they’re not the only problem in this, of course. So supply affects demand. Eventually, the homeowner hires an illegal alien to do it, or gives up on the whole cycle, plows up the grass and replaces it with bark.

The point is, when there is a connection between the two ends of the seesaw, it can no longer operate like a seesaw. Today, we still have signaling. But the signaling is, too much of the time, from the suppliers to the those who demand, such that the demand ends up being nothing more than a reflection of whatever is in supply. The suppliers, in turn, then end up doing whatever they wanted to do. It’s then up to the consumer to find a way to make it fit.

The first casualty of this is the signaling. Without suppliers of valueless products being told to go get stuffed, there is no way to measure what does & does not have value to the consumer. And so, after the signaling, the next thing to go is the value. There may be a frenzy of economic activity going on, but without measured value there isn’t much value in the transactions at all, and it all becomes just a bunch of work. Value-less work. Like an electric fan someone forgot to unplug.

At the end of it, you just have a bunch of spoiled, first-world hipsters standing around, each one with a million dollars or more in his bank account, but capable of buying nothing with it, holding signs on the sidewalk that say “WILL SURF THE INTERNET FOR FUD.” That’s the ultimate consequence. I think we’re well on our way at the end of 2014:

Fiber optics. New technologies. Obsolescence. We’re dead alright. We’re just not broke. And you know the surest way to go broke? Keep getting an increasing share of a shrinking market. Down the tubes. Slow but sure.

You know, at one time there must’ve been dozens of companies makin’ buggy whips. And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company?

In order to understand what is going on with the US of A at the end of 2014, you have to understand the changing global dynamic. It isn’t just new technology. It’s the difference in what happens to you, if you keep making the best goddamn buggy whip anyone ever saw.

The lunacy of the times in which we live is that the spirit of Danny De Vito’s speech about obsolescence, has itself become obsolete. A company that makes buggy whips won’t be “dead, just not broke,” staggering on for a year or two before collapsing into debris. These days, suppliers decide demand. Apple has proven it over and over again. So with a little bit of advertising, in such a scenario there would emerge a crushing demand for buggy whips, to match the undemanded supply.

Sounds wonderful, doesn’t it? It isn’t. It’s terrible. It’s a disease. The market has lost its ability to send signals, which when you think about it, you come to understand that that’s all a market really is, a network of signals.

Our “market” produces an awful lot of stuff nobody ever needed. The people who produce these things are terribly busy meeting deadlines and they may have a great sense of purpose about them. But too many among them are missing actual customers. Or, have customers who are reluctant customers, customers regulated into being customers. Like “clients” of a collection agency. Or, customers buying the product without any need for it in mind, often buying the thing just to find out what it does.

REAL demand would say: We need more American kids learning about technology, starting with how many bits are in a byte, then working their way up to coding, software construction, then design, then project management. Then, studying the mistakes of previous technology pioneers who started companies that way, and then messed up & killed their own companies. In the meantime, if any houses or yards or orchards have to be purchased, do the yardwork on those. But demand is dictated by supply now. American kids don’t want to pick fruit, and they don’t want to pick bits out of bytes either. So we have illegal immigrants pick the fruit and cut the grass, and among our natives who actually want to do something with technology, it seems the thing to do has become to create more & more & more certification tests. Why bother with being the guy who builds stuff, when you can be the guy who dictates how other people build stuff? Just like, why be the guy who cuts grass, when you can be the guy who hires the illegal alien to cut the grass?

I’m convinced, at this point, if we were all a bit more motivated to ask on a daily basis “Waitaminnit, am I building a buggy whip?” — there’d be a lot more Americans cutting their own grass and picking their own fruit, nudging their own kids to do those things, dishing out the “You’re under my roof” speech my peers heard so much during our own childhoods. And things would be different in technology. Lots more new products. Not games. Not yet-more computer languages. Regulatory requirements, in Year N, would be a lot more similar to the ones in Year N+1, or Year N-1. Our innovation would not be in innovating new rules. It would be in building things other people can actually use. We seem to have gotten away from that a bit.

How did it happen? What it is, and has been, is an invasion. There is work that has something to do with supply-and-demand, and then there is work that doesn’t have to do with this. Non-producing work. Unproductive work. The electric fan someone forgot to unplug. Stuff you have to buy even though you’d rather not; regulated stuff. Supply that dictates the demand.

The unproductive work has been invading the productive work. And then, as invaders always do, it has started to tell the invaded what’s-what, and what-for. It began with the bureaucrats. Non-producers who want to dictate to producers how, when, and where they do their producing. The consumers are then left to consume whatever is produced — and, not to question it.

Really great explanation. I read this to my pre-teen kids this morning and they absolutely got it. Now ‘wanna-conomy’ is part of our dictionary!
- doodlemom | 12/29/2014 @ 10:36
Thanks for the kind words, especially about the absolutely-getting-it. I had my doubts that anyone would.
- mkfreeberg | 12/29/2014 @ 17:41
This also dovetails with your observation that salesmanship and product quality are often inversely-related: the worse the product, the better the sales pitch needs to be. Drumming up huge demand for a product nobody has ever needed has got to be the biggest sales/con job ever – call it the “Pet Rock Rule.”
- nightfly | 12/30/2014 @ 09:56
I think I kinda get it. My first impression is that you’re talking about a combo of (the common misunderstanding of) Say’s Law, and a right-wing critique of the Left’s “consumerism” obsession.

(TCMO) Say’s Law says supply creates its own demand, which I think is less an economic “law” and more of a comment on human nature — given a long enough time frame, people will figure out how to monetize just about any resource (think of petroleum).

The Left, meanwhile, has been on their high horse about “conspicuous consumption” since Progressives were Republicans. Ur-Proggie Thorstein Veblen thought it was a problem that people had too much free time and extra money to spend, so he wrote The Theory of the Leisure Class to bemoan it in 1899. Vance Packard said that Mad Men were subliminally stealing your soul around 1957. William Whyte said that capitalism makes soulless automatons out of us all around the same time in The Organization Man. C. Wright Mills said the same in White Collar (1951). All these guys had a fever, and the only cure was more socialism.

Because of this, we conservatives have been forced into a kind of laissez-faire uber alles attitude. To check the alwarmists, who want to turn us all back into medieval serfs, we find ourselves arguing that it’s GloboCorp’s God-given right to strip mine the Amazon rain forest. To check the anti-globalization crowd, who also want to turn us all back into medieval serfs, we find ourselves defending all the shit Nike does in Indonesian sweatshops. To check the unions, we find ourselves claiming it’s an unqualified good when all our manufacturing jobs are in China, all our customer service jobs are in Bangalore, and all our ER nurses come from Haiti. To combat the eco-loons, we claim that Monsanto seeding the Earth with god-knows-what is completely unproblematic. &c.

I think, then, that you’re advancing a kind of conservative-ish counterpoint to all this. That we need to focus less on consumption, and more on the (pardon the phrase) means of production, NOT because those things are in themselves bad, but because they hinder our understanding of how things actually work, and erode our character. Not the Left’s “you only want thus-and-such because Madison Avenue tells you you do,” but instead “you don’t know what you want, because you don’t have the character to appreciate things in themselves.”

Is that close, or am I way off?
- Severian | 12/30/2014 @ 13:31
“The Pet Rock Rule”?
I call it The Emperor’s New Clothes edict.
This is why I “evolved” from the Theatrical Scenery construction trade, to the Industrial Display (trade show “booths” , TV commercial sets, resort/restaurant interiors, retail store displays, etc…..), all without
union embezzlement along the way. Oddly, somehow, “internship” steps along the way “evolved” into “Name your price!” in some venues where non-labor, non-skilled, “professional” obstructionists were easily sandbagged into submission.
Granted, “You want a friend? Get a dog!” came to fruition from some who were instructed to do so, on more than one occasion. Of course, those were (well, mostly) folks who threats of “or ELSE” by their like “talented” enablers, actually meant something.
- CaptDMO | 12/30/2014 @ 15:20
Say’s Law says supply creates its own demand, which I think is less an economic “law” and more of a comment on human nature…

If I understand Say correctly, he was pointing out that demand and supply were not working in silos, the latter had an effect on the former. He, or someone who interpreted his writings, evidently took this to an absurd extreme of “gluts cannot occur.” The whole body of thought took a beating during the Great Depression while people were standing around endlessly trying to find work.

My point is more of a fretting over the signaling. The consumers are losing their vote. They used to have an effective way of saying “Get stuffed, I’m not buying that.” Or, “This MUST be done, I’m willing to pay top dollar.” Both of these vital signals have become muted lately, to the detriment of everyone’s interests, even the suppliers’.
- mkfreeberg | 12/30/2014 @ 23:15
That’s my understanding of Say, too. But I also get the common misconception — “supply creates demand” — because that often seems to be the case. I find myself thinking about it everytime I pass a Spencer’s Gifts in a mall — who the hell would ever buy this crap? And yet, it’s there, and people buy it, even though I’m pretty sure nobody ever thought “gosh, I sure could use some plastic vomit.”

Which I think is what led to, sigh, “critique of consumerism.” The difference is, I don’t think it’s a problem that plastic vomit exists, or that people spend their money on it. A society that has enough disposable income to blow $2.99 on plastic vomit is doing something right, even if the end product is ugly and useless. Nor does it bother me that people will pay $50 more for the same shirt if it has a certain logo on it. Unlike Our Betters, the liberals, I actually believe in the theory of evolution — primate troops will organize themselves into a hierarchy, and if they can’t do it by violence they’ll display something else.

I see your point now, and I agree with it, but I’ not sure how to correct it. I think that’s what I was groping for in that bit about laissez-faire — because we’re not leftists, we’re not going to go around telling people “no, you don’t want that, it’s useless, and to make sure you never want it, I’m going to ban its manufacture forever.” But we DO kinda need to be told — or, at least, strongly urged to consider — that all of these products are not in and of themselves fulfilling. Life doesn’t end if you don’t get an iPod 7 nano; the previous iteration would do just as well, and in fact a boombox would cut it, and in a pinch, even the radio (or, you know, make music yourself, but let’s not get ahead of ourselves).
- Severian | 12/31/2014 @ 11:11
[…] had earlier made the point about what is happening to our […]
- House of Eratosthenes | 02/17/2015 @ 06:42
[…] that is effect, and not cause. What’s the cause? Could it be that, in these days of waning influence from the consumer on the nature of the transactions, when we uncover the motives of the suppliers we’ve found the root cause? Is the consumer […]
- House of Eratosthenes | 03/05/2015 @ 07:44
[…] which are non-ideological. The system is being slowly transformed in this new modern era of the Wanna-conomy, in which products and services, as well as the transactions that involve them, are tailored to […]
- House of Eratosthenes | 07/18/2015 @ 07:19
[…] which are non-ideological. The system is being slowly transformed in this new modern era of the Wanna-conomy, in which products and services, as well as the transactions that involve them, are tailored to […]
- “The Logic of Elitism” | H2o Positivo | 07/19/2015 @ 01:17

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