08 September 2009

Deep Thinking: Economy

I was at dinner with one of my chums tonight, and we got talking about what makes a great economy. I'm not econ major, but I'm getting to being a decent consumer so I guess that makes my whimsical thoughts at least worth blogging. Here is what I got. I'd love some constructive input or cool POV's on the subject. Its messy and scattered, but is fun to write.

Assumptions:
  • A good economy serves the needs and wants of its consumers.
  • It is in someone's best interest to serve others interests.
  • A person-person relationship is a highly desired function of consumerism
  • Individuality and variety are also desired traits
  • Most consumers are self-aware of their needs and wants
Elements of an Effective Efficient Economy:

  • Low concentration of large quantity suppliers and high concentration of small specialized experts with networked access to producers

Lets get one thing straight, places like Wal-Mart have their place. When there are basic goods that everyone needs access to, and we already know how to make them very well (e.g. like making papers plates, napkins, nails, or door hinges), we should have a place where these type of things are available to the masses in great supply and cheap cost. HOWEVER, for most goods this is not helpful to local business, individual identity/culture, or innovative progress. What this looks like in an ideal economy is a giant hardware store with tons of practical goods. Home Depot has got this down fairly well. Its basically a general supply store with tons of options and basic goods.

In an ideal economy there would be these type of stores. However, for most specialty goods (including clothes, most food, entertainment, rare goods) there would need to be a different way of obtaining them. The secret to satisfying the specific needs of the consumers is to have high instance of specialized experts in the production/distributing sector. When I have a specific need, it dosent make any sense for me to become an expert in everything I buy, albeit interesting and fun at times. The fact of the matter, is that I need to spend less time thinking about consuming and less time consuming so I have more time to do other stuff, (like producing my own cool services).

Solution: I go to the expert who I can detail my request and get feedback on what my options are and introduce me to the proper variety of available goods and services. I then make an informed choice, and then proceed. For choices I make repeatedly, I slowly become the expert as I become more educated about the options and provide this service to others.
  • Prolific access to information/communication
  • Super-streamlined and efficient shipping system

(i might still work on this one a little)

1 comment:

bryan said...

I am no economist myself, but I think you've made some good observations. I think lack of knowledge about products is a potential downfall of consumers and economies everywhere. Wal-Mart gives cheap stuff, but therein lies some peril. Some stuff (less stuff than most people think), like paperclips, you want good and cheap. However, a problem arises such that when we are used to paying nothing for cheap crap, we also want to pay nothing for the gold-plated paperclip (or other high quality products). People can't manufacture quality products and sell them for nothing so we drive the high quality products out production and then all we have left is cheap crap. It's sad. People need to understand what is quality and what isn't and when they should be looking for quality. It's also easy to fooled in the opposite direction where you go to buy a purse and assume that the on e with cool brand that costs 5 billion dollars is also the best quality.