Politech posts Professor Russ Roberts thinking about learning economics more visually/creatively which, I think, would be a great idea. However, the faith people put in free markets is irking me more these days. When he coos that "the ability of the economy to provide lots of
low-carb products at low prices when people suddenly decide to reduce
their carbs" is a result of the "flocking" factor of marketisation, and that the "same process will cure prostate cancer some day if we let it work", I see that huge void in thinking that gets us into the crap we're in too.
Similarly, the article Declan points to as background fawns over the "greater marvel" of the market reacting means that "thousands or millions of us can make those changes and the system simply readjusts to our new desires." This kind of confirms what I've been thinking for a while now - that markets positively feedback into themselves, re-inforcing (through both the fundamentals of market prices and the ironically-named "marketing" departments) a particular trend once it reaches a certain "momentum" point. In other words, there's more chance a particular market will get big if business think it's going to get big, rather than because it "deserves" to be big, or will grow to that size naturally. Clothes, entertainment, and in fact most large consumer goods are of this "inflated niche" variety - a market for a market's sake, driven by the needs of businesses rather than the demands of buyers.
Is this artificial market substance a failing? Or simply part of what makes a market a market? The idea, people claim, is that people won't buy what they don't want, and things will settle down in the longer term, but this is looking at it only along a single axis. In the wide picture, I think what we actually see is merely migration from one artificial niche to another, e.g. from desktop applications to web services in the computing world (and this is why having a diverse portfolio is turning out to be more important that doing one thing well), so the marketplace is always in constant turmoil, leaping about from one idea to the next, but all the time being inflated so that the greatest number of people are concentrated in the smallest space possible at any one time - for this way lies efficiency.
Maybe it's just me, but I've kind of had enough of this idea of "the greatest product is the product now". In amongst the market struggle, there are 2 things that don't change, from my point of view.
One is that anything not being measured by the market is forgotten about - one could say that because certain fields are liberalised by the market (or rather "into" it), they are also under more observation on the whole too. Morals and ecologicals are 2 things that are very much not under the microscope at the moment, but obviously should be - remove our conscience and what are we? Remove our planet, how can we be?
Two is that a "flocking market" actively discourages diversity. Difference means much less chance of sale at the end of the day, and hence more risk when investing (at all levels). The bigger the business, the more it is in its interests to define a single, narrow market, and as businesses get bigger, markets will get even narrower. People think we have "diverse" markets today (ooh, look - 1GB mail systems, etc) but really, we don't.
Given enough time, the market will achieve what people will call "great things", but unless we start to address the other, very real costs of this greatness, we'll only realise what the costs of the system are once it's too late. Pure markets cater only for human greed, which may - within a large system - "average" itself out, but life is so much greater than what markets represent.