Opinion | Columnists
Supply must now recognise demand
We all know that the only way for the world to emerge out of the recession is for a new innovation to ride us out of it which we - the consumers - would all sign up for.
- By Mishaal Al Gergawi, Special to Gulf News
- Published: 23:06 July 25, 2009
I was watching the Colbert Report last week on Comedy Central. Stephen Colbert, the host of the show, has a tradition of interviewing people - mainly writers with recently published books on current affairs - and question them on in their premise, all this while making a slight mockery of them; the most recent one was Paul Krugman and to say the least Colbert managed to make Krugman contradict himself and admit it. The day after, Douglas Rushkoff was the interviewed guest. Rushkoff held his ground remarkably well and defended his points and I dare say stole Colbert's thunder.
According to his profile, Rushkoff is best described as a writer, columnist and lecturer on technology, media and popular culture. His latest book, which was the reason for his invitation to the show, is called Life Inc: How the world became a corporation and how to take it back. I was cynical at first but I heard two statements from him that changed that. First is "every minute you are not consuming or producing is a waste for the economy". In other words, if they are not working or spending money then the economy is contracting or not expanding at least. Second, which is an elaboration on the first, is "if everyone in this room got cancer tomorrow that would be good for economy& everyone would have to [spend money buying] medicine and the stock market would go up".
Perhaps to some this isn't a very strange finding; to many, myself included, however I do find the timing of this book quite illuminating. Investors and consumers (is there still a difference?) have completely lost their faith in stock markets, accounting firms, rating agencies, CFO's& you name it! However, we all know that the only way for the world to emerge out of the recession is for a new innovation to ride us out of it which we - the consumers - would all sign up for.
So after all the bailouts and the restructuring plans, we will be asked to go out there and buy new stuff again - just as we are being asked now to buy old stuff on discount. And so the idea that politicians and business owners are actually able to call on the public to "go out there and support the economy" is a very strange notion.
This is because the economy's role, in addition to a number of things, is to essentially reflect the interests and preferences of the general public in commerce and trade on one hand and the corresponding entrepreneurial capacity to recognise and service those interests and preferences i.e. demand and supply.
How did the consumer suddenly become the keeper of the economy? When did it become fair to expect people to buy in order to orchestrate manufactured growth? I'll tell you when; the 1960's.
I have been watching a series called Mad Men. The title refers to the advertising executives who all worked on Madison Avenue in New York.
It gives an impressively accurate account of how advertising transformed in that era and how just as new products were being produced their corresponding desires were created.
About a year ago, I wrote a piece about how the world is not sustainable at six billion people wanting to live as the average western European does. It mainly related to the idea of lack of life in the products which we consume and hence our cycles of recycling our products - not the good kind of recycling - are growing shorter i.e. we throw away stuff much earlier and the sad part is that it's not mainly our fault but rather the quality of production because to achieve growth in sales has become the main method by stock prices going up. But as you've already guessed, we cannot grow indefinitely, and those dividends will eventually cease, mainly because once the 'new consumers' from Africa, China, India and Central Asia arrive on stage they will want the same products; we have seen this with the Arabs of the 1970's, the Japanese of the 1980's and the Russians of the 1990's.
Conclusion is that there aren't enough raw materials in the world today to support that lifestyle for everybody and so the only choice is for us to actually develop a more stable form of life which depends more on actual needs rather than manufactured ones so that some entrepreneur can IPO their 'big idea' when it's not really that big. Someone commented on the piece I wrote a year ago with this saying: as Mahatma Gandhi once famously said: "There is enough on earth for everybody's need, but not for everyone's greed."
So what does Rushkoff recommend? He says that this crisis is also an opportunity to invest in each other, to find businesses whose owners you know, whose products you do believe in and whose consumers are around you and literally invest in your community.
Let the business go global when other people from other places really want it as opposed to a 'Mad Man' drawing you a campaign with specific messaging that doesn't really say the truth about your product but actually creates a false image; and for the time being let similar ventures in other places recognise their needs better than yours. This way supply will equal real demand as opposed to a manufactured one.
Mishaal Al Gergawi is an Emirati commentator on socio-economic and cultural affairs in the UAE.
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