Demand and Supply

Column by Alex R. Knight III.

Exclusive to STR

Much has been made in the press recently about former Texas Governor turned Trump's Energy Secretary Rick Perry's economic statement: "Here's a little economics lesson: supply and demand. You put the supply out there and the demand will follow.”

To be sure, at first assessment, this statement seems counter-intuitively inverted. The most basic understanding of free-market principles instantly refutes it: Demand must precede supply. Scarcity drives cost.

It struck me, however, that there are areas of capitalistic endeavor which, when narrowed down to specialization, necessitate a reversal of this market paradigm. The ones that first come to mind are what we commonly call the arts.

Writing. Music. Painting and sculpture. Acting and film making. Photography. These are all activities that, once brought to the marketplace, must then generate a demand.

This is not to say that there exists no general demand for such goods and services. Demand has, in fact, in one form or another, existed for all of these mediums since their respective advents in history. But there was no specific demand for Stephen King, The Who, or Jackson Pollock before those individuals created a supply of what they had to offer. Then – and only then, after much labor – were they able to create a demand for their unique supply.

Now I separate such artists and their work from other forms of goods and services since such a process is, as indicated above, most often neither necessary nor desirable. And this is due predominantly to consumer discrimination. As an example, if I'm a producer of paper towels, my customers (both wholesale and end user) likely care little that my brand is Brand X versus Brand Y or Acme Brand. In spite of a catchy logo with some eye-popping colors on the plastic outer-wrapper, a consumer in the vast majority of cases will care only that the retail price is the lowest obtainable for a satisfactorily functioning product. There is little other criteria upon which the average customer might base any kind of brand loyalty for such a product. Whereas, the discriminating fan of horror fiction will likely only settle for the latest work of Stephen King or Dean Koontz – and it does not follow that he or she will necessarily opt to purchase literature produced by Alex R. Knight III. Likewise, although they are both musical groups – and rock music groups, at that – it is not necessarily a given that a fan of the Who will purchase a CD or digital download from Sun Parade. Artistry, leisure, and entertainment are generally areas in which consumers can be counted upon to be highly specific and selective. The same cannot be said with the same level of surety with regard to pure service items like paper towels, or dish detergent, or thumbtacks. In these cases, the principle of a broad general demand only, leads the way and blazes the path for supply.

My purpose here, incidentally, has not been to defend Rick Perry in his aforementioned statement. I seriously doubt he was thinking in the same context in any case. But one of the almost endlessly marvelous things about free markets is the manner in which their dynamics can be flexible, even to the point of reversing axioms.

To wit, Perry supplied me with the idea of writing this. Conscience, and logic, demanded that I do so.

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Alex R. Knight III's picture
Columns on STR: 138

Alex R. Knight III is the author of numerous horror, science-fiction, and fantasy tales.  He has also written and published poetry, non-fiction articles, reviews, and essays for a variety of venues.  He currently lives and writes in rural southern Vermont where he holds a B.A. in Literature & Writing from Union Institute & University.  Alex's Amazon page can be found here, and his work may also be found at both Smashwords and Barnes & Noble.  His Facebook page can be found here.  Receive Alex's occasional Tweets here.

Comments

newjerusalemtimes's picture

Yeah,

I've argued recently at a prominent welding forum, which is slanted toward a mercantilist attitude, that a North American importer (Everlast) of Asian welding units, and the Asian producer itself, is "anticipating" market demand with a sort of Black Swan event in the welder market for a multi-function MIG, Stick, and AC/DC TIG unit to be released in the next 30 days.

There hasn't been one before. Miller came close with an AC/DC TIG unit (the inverter Syncrowave 210) that does MIG only via a spool gun, but at more than $3000, when delivered and outfitted for that.

The Everlast All-In-One 221Sti unit will be about $2000 or more, delivered, tax-free, outside the Alta California taxing zone.

http://weldingweb.com/showthread.php?651371-Sensational-New-All-In-One-M...

http://weldingweb.com/showthread.php?703381-Everlast-221-rumors-Everlast...

Alex R. Knight III's picture

Interesting!  That's cool you're a welder.  You may have read my previous piece here?  :-)
 
http://strike-the-root.com/light-metal-shadow-freedom-of-welding