Thursday, April 28, 2011

The slippery slope of the market

An interesting post on the economist deals with a phenomenon the blogger labels “Economism,” the view (expressed by another Economist blogger) that
it is normally the economist's lot to explain to the superstitious public the humanitarian benefits of bringing human life ever more within the cash nexus.
The Economism-post then goes on to discuss whether shifting our perspective of all relationships into the form of consumer-and-provider-commercial relationships is always right, or whether there are some types of relationships we want to see as different from a purely commercial, self-interested transaction.
I would agree that this is a relevant point, that there are some relationships or even some areas of life that are cheapened or altered in a bad way by transactionalizing them or seeing them too much as a quid-pro-quo transaction (even when they “at some level” have that aspect as well). My point today, however, is more whether the market as such lets loose forces that tend to move us in that direction anyway.
The idea is just that if there is some non-commercialized value generated in some arena of our lives, then even if commercializing it would reduce the “total value generated” in that arena, it would still make it possible for someone to monetize and get hold of a larger share of it.
This would be a kind of entrepenurship – establishing a new market – finding a way to frame and promote a new product or service so that people suddenly accept and engage with it in an arena that was previously non-commercial.
For instance (a non-realistic (hopefully), but clear illustration): If you found a way to make it “fun” and socially less distasteful to trade for sexual services (by bumping your phones and agreeing on a price that was then transferred between accounts), then at least part of the “value” of sex would be monetized and the service-owner could capture this through a 1%-off-the-top fee. If 20% of sex in society shifted into this domain – then even if the value of each of these sexual encounters over time became lower than before because of it, the entrepeneur would still earn a load of money.
For this mechanism to work, individuals must be myopic or tempted or in some way not foresee the effect this will have on the long term quality of the activity or good or service in question. Some unforeseen lagged effect or ignored externality must be present. But given that, any non-monetized activity or value will be an alluring “potential market” for any entrepeneur who is able to package this into a commericalized market-activity.

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