My friend Jim wrote an interesting blog today about the farming industry and how we are not the men our grandfathers were. An excellent and thought provoking blog from Jim, as always.
Jim argues that we claim to love the countryside and yet we spend very little looking after it or supporting our farmers and other rural producers. Instead we spend money on mobile phone subscriptions and TV box sets – things that our grandparents didn’t even know they wanted.
The reason, I think, is that there is a fundamental problem with capitalism and the free market. And it’s more or less the same problem that is causing me to say that democracy is broken.
The theory behind capitalism is that competition forces suppliers to improve their products. The customer will buy the product that most closely meets their needs and at a price they can afford. Producers selling substandard products will fail. Better producers will flourish. Everyone wins.
That’s the theory.
Unfortunately, it doesn’t quite work. Producers have found that consumers don’t always buy the best or cheapest products. With clever marketing a consumer can be made to buy a product they don’t need and at a price they can’t afford.
Don’t believe me? Then look at this …
Apple have just announced the prices for their new smart watch, with prices ranging from £299 to £13,500.
What do you think is the difference between the cheapest and most expensive in the range? Can the most expensive watch tell a better class of time perhaps? Does it have more features? Can it do more stuff?
Nope. None of the above. Every watch in the range can do exactly the same thing as every other watch. The difference in price is only related to the materials. You will pay more for a gold watch than for a plastic one.
What sort of a world do we live in where someone will pay 45 times more for essentially the same product?
The reason for this is that the watch’s value is not related to its true worth. It is based on what the marketing experts have made us want. Some people want expensive watches purely because they are a status symbol.
At the other end of the scale, millions of people waste their hard-earned cash on lottery tickets. This is an investment which is such a poor deal that it would be illegal for anyone other than a Government-sponsored body to run a lottery.
Why? Because the marketing gurus have enticed us in to the lottery by teasing us with the exceptionally unlikely fortune that we might win. And by the insidious threat that “our” numbers might come up in a week when we don’t play.
We have electronics manufacturers who find new ways to make us upgrade to the latest products. Apparently my HD television isn’t good enough any more. I now need to buy a 3D telly. Or 4k, whatever that is.
And I’ve bought Star Wars at least three times – VHS, DVD, blu ray.
Supermarkets play this game from both ends. They are driving down prices to such an extent that small producers like Jim can’t make a living, but they are also driving up the prices of premium products. They are using their own marketing tricks to persuade us to buy things that we only think we need.
There is an answer, but it is not an easy one. We as consumers need to get more savvy and less gullible about what we are buying. And that means not buying the expensive stuff that we only think we need, and paying more for essential products so that the suppliers can have a decent income.
The marketing industry have a saying – “sell the sizzle, not the steak.” In other words, manipulate and con the customer.
I think it’s time we demanded steak not sizzle.