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Company A makes a product that truly solves a need, as in, buying or consuming its cure, you have no further need to consume it ever again. There is true utilit
by PeterStuer 7y ago
Company A makes a product that truly solves a need, as in, buying or consuming its cure, you have no further need to consume it ever again. There is true utility, but there is no further marginal utility to be gained from subsequent consumption. For example: a company selling cookwear that is so good that its pots and pans are handed down the generations. Once you hae a set you nor the one that inherits from you will ever have to buy cookwear again. Long term these companies fail because the eat their own market.
Company B makes a product that does not solve your need, but provides a mere temporary relief. If you want to keep your problem 'solved', you have to perpetually buy the relief. In the above cookwear example, sell pans that are 10 times cheaper than those of company A, but they only last for 2 years until they bend or crack, so you need to buy a new set of crappy pans every 2 years. Unlike A, company B does not usurp it's own market. They can in theory keep selling junk cookware forever. This is partly why we live in a world filled with crap that breaks all the time, but unfortunately there is even worse.
Company C is a more nefarious type of 'B' company. It's products increase the problem at the same time they provide the temporary relief, thus increasing their own demand or making escaping the downward spiral harder and harder. We recognize and regulate against a few of these types of products, often fast acting ones (crack cocaine), but the vast majority can keep dodging regulation for a very long time (tobacco, alcohol, sugar, ...)
Company D is the true champion of the neo-liberal market economy though. It provides a product with genuine utility, that doesn't necessarily have the slippery slope built into it, but creates it nevertheless through externalities. A typical example of this is a car. It provides undeniably great benefits to person buying the car (personal mobility), while at the same time impacting the lives of all in a slightly negative way (pollution, use of public space, noise, ...). Let's say in a small model world where everyone starts with a 'happiness score' of 0, that the car 'buyer' gets a solid +500 happiness points, while everyone gets a shared -1. Yes, we might feel a little worse at the start, but that -1 is easy to offset with a solid net +499 I get the moment I also buy that desirable car. It is not until much further down the line, when the cumulative unhappiness has reached levels that not even a +499 buy can rectify, that some enlightened soul can observe we might have been better of without cars altogether in terms of happiness, but even at the point where people would realize this, they individually only have the choice between buying and at least get a +499 added even though the overall happiness score will still be far under water and sinking, or personally forego the consumption and still be 499 happiness points worse off. Personal abstention doesn't solve anything, apart from maybe a slight moral feelgood, as it is the consumption of all others that creates the systemic misery. This is why 'vote with your wallet' is a pretty hollow, even cynical phrase, in these types of situations.
Economists like to portray 'the market' as a fight among type A companies one-upping better 'solutions'. In reality it is the type B,C, and D companies that are systemically selected for long term, and that explains why we are consuming ourselves into perpetual unhappiness.