pull down to refresh
47 sats \ 7 replies \ @Scoresby 29 Jul \ parent \ on: Minimalism is Pro-Social econ
what is the real world scenario where such a thing happens?
It's a contrivance that economists call "the short-run". We bust it out when we want to think about the changes that will happen before the structure of production is able to adjust.
Still, it's not that crazy. Supply being fixed isn't the same as quantity supplied being fixed. If you think of a particular factory, with it's available labor force and suppliers, it has a fairly fixed supply. At different prices for its products, they'll scale production up or down, but the production technology is the same.
reply
I guess I'm confused by this. How can you make a generalized statement based on a particularized observation?
The structure of production will adjust and when it does, the result may very well be more expensive Hodl Butter...or no Hodl Butter at all if enough people decide not to purchase it. However if you keep on buying it and more people ask Hold Butter if they can buy some, then Hodl Butter might figure out some ways to make it more available. This is something they have no reason to do if they see their sales declining and interest waning.
Your post is making a generalized statement about life, not a specific observation about some very constrained place or moment in time:
By reducing your consumption, you make life more affordable for others, possibly even allowing them to pursue more rewarding lifestyles.
In any scenario where one might make a decision based off this observation, supply won't be fixed. If I decide to not buy something it may or may not contribute to the expansion of a business (it might also contribute to the degradation of the environment or a even to the beginning of a war) -- the same might be said if I choose to buy something.
reply
Your Hodl Butter point is somewhat inconsistent. You say that the production structure will change and then proceed to ignore it when declaring that they would have no reason to continue producing at lower demand: Most likely their inputs have become cheaper and their cost of living is most likely cheaper, so they can afford to spend more time on it.
When we're thinking about our individual actions, it's not all that likely that we need to allow for supply shifts. Our production is marginal in many cases. Only if your demand is sufficient to change how goods are produced do you need to think about supply shifts. Maybe that's the case for Hodl Butter, but it's not the case for anything that's mass produced. No one's opening a new plant, or closing an existing one, because you cut back on your spending.
Now, when you suggest that the equilibrium changes could go either way. I don't disagree, which is why I had the "half baked" description on those thoughts. Take those more as my musings on what I would expect to happen.
reply
You say that the production structure will change and then proceed to ignore it when declaring that they would have no reason to continue producing at lower demand:
Isn't this because one change is voluntary and the other is not? A person can choose to produce more Hodl Butter or not in response to an increase in demand. If they choose to not increase production, they can continue to sell what they make as they did before. They don't even have to change their prices. They can just sell what they have exactly as if there was no one new asking for Hodl Butter. There is an option to continue as is.
In response to a decrease in demand, they don't have this choice any more. If they choose not to decrease production, they will have too much Hodl Butter and will have to lower prices to sell it. They no longer have a choice to continue doing what they want, but must react or run out of money. It's a fundamentally different situation. Isn't this a difference that needs to be accounted for?
In the first case, any choice Hodl Butter makes is likely because they think it's in their own interest to do it--that they think they action will be beneficial for their business (it is unlikely that they will take an action they believe is harmful for their business). In the second case, Hodl Butter may have to lay off a good employee or miss a loan payment, they are not taking action because it is good for the business, they are taking whatever action they must -- beneficial or not (they may be compelled to take an action that is harmful to their business). This is a key difference, isn't it?
My assumption in both cases is that a person does not offer something to the market unless they want to make money. This leads to my next assumption that the price a person offers something at in the open market is near to the price it is not worth the effort to offer to the market.
I think about my posters I sell (maybe not the best example because I'm a terrible businessman). I had a number of people buy them in 2023 but then fewer in 2024. Now I don't really bother selling them anymore. I gave a few away a couple weeks ago because they are just sitting on my shelves. But largely, I've stopped trying to market them. The signal I got was that people didn't want to buy them at the price I was offering, and offering them for less really wasn't worth my time. If, however, there had been demand for 2 or 3 a month over the last year, I would likely still be selling them.
So in this case, a few people got free posters and are better off. But now I'm not making posters any more and anyone else in the world who wants them can't have them. Seems like a net loss (perhaps I am taking too high account of the merit of my posters, though).
reply
I certainly don't want to besmirch your abilities as a poster artist, so let's just say the world wasn't ready for them. What the market told us about your posters, though, is that the resources they consumed were worth more to people when deployed elsewhere (probably mostly your time being worth more to you being deployed elsewhere).
My point was that you should have been accounting for how other things were changing for Hodl Butter Inc. We aren't just talking about a world where people stop wanting Hodl Butter, after all. There's less demand for lots of stuff and that's going to reduce the input costs for Hodl Butter: cheaper jars, cheaper ingredients, cheaper labor, etc. All of which makes it easier to continue producing in the lower general demand environment than in an environment where only demand for their product fell.
Also, since Hodl Butter is someone's side hustle and a passion project, it's analogous to my SN writing. If the general cost of living were lower, I'd spend more time working on it, because I could afford to work the main gig less.
I'm not disputing that the demand reduction has negative ramifications for them, just noting that there are offsetting forces in play.
Let's think about the extreme scenario where my patronage was keeping them afloat. That means the difference between the resources they're using being socially valuable or not is my personal satisfaction from their products. In that case, the rest of humanity prefers those resources be deployed elsewhere. My demand reduction is therefor pro-social.
reply
the rest of humanity prefers those resources be deployed elsewhere. My demand reduction is therefor pro-social.
Okay, yes, this is good. This does help me understand the concept. In this case though the prosocial element does not necessarily come from minimalism so much as not wasting time (mine or the the time of those who worked to buy a poster from me). I fully agree that shitty products should stop being made and if nobody buys a thing that's a sign that it's a shitty product.
Your OP example with Hodl Butter is different though. You aren't suggesting it shouldn't be bought in such copious quantities because it's a bad product, but rather because it benefits others to reduce demand for it, right?
Is your position that an increasing cultural shift toward minimalism would be good for the world because people will be happier with a lower standard of living? (let's define standard of living as having access to clean water, electricity, a wide variety of choice in foods, pleasant shelter)
There's less demand for lots of stuff and that's going to reduce the input costs for Hodl Butter: cheaper jars, cheaper ingredients, cheaper labor, etc.
I'm sorry, I feel very Grugg brained and stupid here: if there is less demand for lots of stuff, but it doesn't make the sellers of that stuff poorer because the demand for their inputs has gone down as well, doesn't it just mean the standard of living went down for everyone?
If we take all our money and move the decimal point to the left, so that what was once $100 is now only $10, that doesn't mean anything got more affordable. In the same way, if society generally reduces its demand for everything and that leads to a general decrease in the cost of living, it won't mean everything gets more affordable -- it means we just have less. We just moved the line where poverty is to the left.
But isn't the idea of markets that they respond to what people want? So we might say that we have all the consumerism and stuff and airplanes and other things we spend money on because in aggregate people want those things.