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Mrs. Cog and I regularly compare notes while sitting at our desks conveniently arranged next to each other. It usually starts with a comment or observation tossed across the void while we are intently immersed in our own personal interests. On occasion, this results in feet thrown up on the desks and an involved back and forth as we hash out the subject nuances from our own particular point of view.
In this case I was commenting to the bride about someone of obvious substantial experience who was equally, and obviously, incompetent. But, surprisingly to me at least, they had not been washed out of their chosen profession, or in this case an income producing hobby, based solely upon their demonstrated incompetence.
Why was the ‘market’ still rewarding this person with an income sufficient to maintain his or her interest and participation, assuming, of course, the person wasn’t willing to subsidize substantial and continuing losses for the pure pleasure to repeatedly demonstrating their ineptitude?
As happens way too often for my ego to tolerate without a sharp kick to my cognitive shin, Mrs. Cog had a succinct reply loaded up and ready to be lobbed directly back to me.
“Scraps on the table, dear. Scraps on the table.”
For those who have ever worked for themselves on a sustained basis, or who understand real life economics as applied and lived rather than as an academic who pontificates on a theoretical basis and is paid to believe their expertise is correct, a true free market is ruthless and thorough. It does not tolerate stupidity or incompetence for long, quickly flushing away all who do not measure up.
Or at least that is the case when ‘markets’ were actually free. In practice markets are never ‘free’, for there is always some type of outsized influence weighting upon them, usually government regulation and influence, even if that influence is secondary via tax policy or as a substantial buyer and seller. However, where there is a will there is a way, and up to now most businesses (and hobbies) preserved despite the outside interference. This speaks more to the resilience of humans than to any specific business sense or acumen.
Textbooks inform us a market exists when a motivated buyer and seller meet to exchange goods or services via a negotiated price and terms. While the average American ‘consumer’ rarely, if ever, actually negotiates for anything these days, at least for the more common consumer goods, a perfect example of this process is played out every weekend at any roadside flea market or yard sale.
Any yard sale ‘hunter’ worth their salt knows the marked price is simply the starting point for negotiations to begin. Everything is in play and many conditions weigh upon the bargaining, including the time of day, traffic flow, seller experience, condition and scarcity of the item for sale, known and unknown information about the greater ‘market’ for the item of interest and so on.
Those who have priced their goods too high, and won’t negotiate them lower, don’t sell them. Those who price them too low quickly sell everything, but have not received market value and are unable to replace them with the money gained from the sale. While the person running the yard sale isn’t necessarily looking to replace what they have sold, the average ‘merchant’ does if they wish to sustain their business and income.
One and done, by definition, is more properly described as a liquidation rather than an ongoing enterprise. Unless, of course, it is all just a marketing ploy designed to convince people to pay inflated prices for common items under the mistaken belief there is a scarcity of the item or the price is below market.
Essentially, what cannot be sustained is liquidated and destroyed, either through market forces or the heavy hand of an outsized player.
‘We’ tend to think this only applies to traditional business interests and doesn’t apply to us on an ongoing basis since we are not a business. Yet we are an integral part of the market as consumers and end users in that market. “We the Consumer” are nearly 70% of the total US economy. We are the ultimate buyer of nearly everything we produce, either as components or finished goods.
We ARE the market.
In the alternative world of the so called awake and aware, there is a prevailing meme describing a world where the large(er) corporations, banks and other crony capitalists have been unjustly enriched and sustained via ‘rigged’ markets. The market could be for ‘money’, government contracts, sweetheart corporate deals and so on. The list is endless and growing, and for the most part I do not disagree with the analysis.
But the second part of the meme states that “We the Peons” (meaning the broad middle class) have not been enriched or sustained by the crony capitalism at the top. Supporting evidence is presented featuring stagnant ‘real’ wages, declining net worth, negative ‘real’ interest rates paid on our savings etc. Again, I do not disagree with this basic supposition.
However, from my point of view there is also little doubt that, when viewed objectively and honestly, the life of the socioeconomic system has been extended, however unfairly this may be to any and all parties involved, far beyond its projected or expected life expectancy if the heavy hand of intervention had not been introduced.
Our current social, economic, physical and spiritual lifestyle cannot be sustained, regardless of what we have been taught or told, if we are to continue on our present path. The illusion of sustainability is all that has been extended through outrageous and monumental distortions in every aspect of our lives.
While there is little doubt in my mind these heavy handed intercessions have only added explosive fuel to the eventual, and inevitable, cleansing fire, for now the scraps on our table that have slopped out of the elite feeding trough above have managed to maintain our standard of living far beyond the realm of reasonable and feasible.
This is ultimately why the income receiving hobbyist mentioned at the beginning of this article has been able to sustain an otherwise untenable business or hobby interest. He and his customers have all been enabled, via the scraps on the table, to continue barreling down into the abyss blissfully unaware or uncaring that the end is near.
How near is the only substantive and unanswered question remaining.
As I am fond of saying, it’s not the fall that kills you but the sudden stop. But how sudden is the stop? I explored this line of reasoning back in January of 2013 with my “Perhaps a Crumble Rather Than a Collapse” three part series. Ultimately whether we are slowing starved, instead of outright killed, doesn’t change the end results, just the agony and ecstasy experienced on our way to immolation.
Markets work via the ‘law’ of supply and demand. One can have all the supply in the world and sell nothing if the product is not in demand. Vice versa, if demand is present, supply will materialize to meet and eventually exceed demand.
We point our fingers towards the bastards at the top, insisting they curb their greed and avarice while completely ignoring or dismissing our part in the equation. We demand ever more consumer goods, especially entertainment, at ever decreasing prices; we want it now (actually yesterday) and in exponentially increasing quantities.
Simply put, we are addicted to everything and anything. “We the People” are the insatiable demand that ultimately feeds the insanity at the top and the bottom. Without an unsustainable demand there would be no endless supply. It is a positive feedback loop, meaning our constant demand for more of everything supports additional supply of everything which, to an addict at least, naturally creates even more demand which in turn creates additional supply etc.
While this equation can be temporarily distorted and accelerated by artificial means, which is precisely what is being done in order to keep the machine on life support, the system must and eventually will tear itself apart. There is neither a perpetual motion machine nor endless economic expansion. It will end, accompanied by great pain and a torrent of tears.
The most frequently visited topic in our household, the one that promotes the most feet on table moments while seated at our desks, is the burning question of why, if so many people claim they are awake and aware of the rapidly deteriorating situation, are they not preparing for what they claim is obvious and inevitable by making significant and lasting changes to their lifestyle and their lives?
The ultimate answer is always the same, regardless of the direction of our approach or the various convoluted paths we take. “We the People” are helplessly and hopelessly addicted to the very system we condemn as caustic and corrupt. If we were not, we would immediately institute personal, professional and familial changes in an effort to protect and sustain our lives and those we love.
Would we not immediately move out of the road and seek safety if an approaching car appeared to be headed directly towards us? Even if the car was still significantly far enough away to allow time to carefully consider alternatives, would we not at least begin contingency planning and mobilization, particularly if we felt collision was inevitable?
While I acknowledge professed socioeconomic dangers are not as black and white as the car analogy above, the perception and interpretation of these dangers could, therefore often does, leave plenty of room for sheltering in place and doing little to nothing.
Some truths are in fact self evident unless great effort is put forth to think otherwise. If one believes, thinks, supposes, postulates (use whatever word you like) the system is unsustainable and will collapse, why aren’t “We the People” making significant changes to our lives?
In my humble opinion, it would appear the scraps on the table are of sufficient quantity and quality to enable and affirm our continuing dependence upon, and support of, the very system we claim to despise.
“We the People”, collectively and individually, are quite clearly our own worst enemy. Quite the conundrum, wouldn’t you say?