Vision for the future
Ellorum ellamum pera vendum, ingu illamai illatha nilai vendum.
When someone overconsumes, another person is deprived of his/her needs. How?
Say, an average child needs 10 toys to play happily and be satisfied. In an ideal condition, the toy factories will produce 10 toys each for all the children in the society and sell them at a price of economic cost (say Rs 10/- each) affordable to the poorest of the group (the richer ones get the toy at a lower price even though they can afford to pay more).
To elaborate, some one with purchasing power of Rs 10/- per toy gets it at just the right price. One group might be willing to pay Rs 11/- and gets the toy at Rs 10/- and use the Rs 1/- for other purposes. Yet another group might be willing to pay as much as Rs 50/- for the toy, they also get the toy at Rs 10/- and enjoy the satisfaction of (to them) a Rs 50/- product.
Now some of the richer ones find that they can buy more toys if they offer Rs 11/- to the toy seller instead of Rs 10/-. To keep the argument simple, some of the poor kids can not buy the toys now as they have only Rs 10/-. The resultant toys are available to the rich kid at Rs 11/- and the market price is pushed up to Rs 11/-. Now all the children in all the groups are forced to pay Rs 11/- for a Rs 10/- toy.
There is more money available in toy selling than the cost (Rs 10/-). The sellers will resort to advertising, promotions and adding non-functional elements to the toys (which they can afford from the extra money they get from the kids). This leads to a cycle by which the toy price goes up and up and more and more children are left out and more and more is paid for deriving the satisfaction of playing with toys by those children who can afford to pay higher price.
The poor kids do not have the toys. The medium income kids pay more for the same toy. The rich kid got the satisfaction that he/she has more toys than anyone else.
You can fit this argument for any goods with any group.
Then, how to prevent this situation.
When someone overconsumes, another person is deprived of his/her needs. How?
Say, an average child needs 10 toys to play happily and be satisfied. In an ideal condition, the toy factories will produce 10 toys each for all the children in the society and sell them at a price of economic cost (say Rs 10/- each) affordable to the poorest of the group (the richer ones get the toy at a lower price even though they can afford to pay more).
To elaborate, some one with purchasing power of Rs 10/- per toy gets it at just the right price. One group might be willing to pay Rs 11/- and gets the toy at Rs 10/- and use the Rs 1/- for other purposes. Yet another group might be willing to pay as much as Rs 50/- for the toy, they also get the toy at Rs 10/- and enjoy the satisfaction of (to them) a Rs 50/- product.
Now some of the richer ones find that they can buy more toys if they offer Rs 11/- to the toy seller instead of Rs 10/-. To keep the argument simple, some of the poor kids can not buy the toys now as they have only Rs 10/-. The resultant toys are available to the rich kid at Rs 11/- and the market price is pushed up to Rs 11/-. Now all the children in all the groups are forced to pay Rs 11/- for a Rs 10/- toy.
There is more money available in toy selling than the cost (Rs 10/-). The sellers will resort to advertising, promotions and adding non-functional elements to the toys (which they can afford from the extra money they get from the kids). This leads to a cycle by which the toy price goes up and up and more and more children are left out and more and more is paid for deriving the satisfaction of playing with toys by those children who can afford to pay higher price.
The poor kids do not have the toys. The medium income kids pay more for the same toy. The rich kid got the satisfaction that he/she has more toys than anyone else.
You can fit this argument for any goods with any group.
Then, how to prevent this situation.
posted by மா சிவகுமார் at Friday, January 06, 2006
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