Demand

As I have been reading around I have frequently encountered the assertion that "there is no limit to demand". I confess that I have not really stopped to think about that proposition before. I have kind of had an unease about it, and my comments on the lack of imagination of the very wealthy about what to do with their money reflects that. But I had not really considered the implications.

I reject the proposition. We are corporeal and we are limited by time. I suggest there is indeed a limit to demand, and I think that the existence of advertising shows that is true. We have to create artificial wants in order to create demand: and I think there is a limit on that too.

One position which follows from the idea that there is no limit on demand is that what we call demand is the same thing as supply. This again trades on the specialised use economists make of the word "demand": if demand is unlimited then they must be talking about something other than the ability to buy. I have touched on that ambiguity before in the context of the lack of demand for food when folk are starving. In the specialised sense used by economists demand does not exist if there is no ability to purchase: and it becomes divorced from what one might ordinarily understand from the word.

But what I am really considering at present is whether demand is unlimited in any sense of the word: and I think the answer is no. This is not a new idea. I think that is precisely what Marx thought of as the inherent instability of capitalism: overproduction. You see similar ideas when you look at some of the analyses provided by "greens" and those who consider we must abandon the notion of economic growth because we live on a finite planet. However those latter positions tend to focus on the supply side: they are worried about the resource limit. That is also important given a growing population: perhaps more important in the scheme of things.

Yet it seems to me that a rejection of the idea of unlimited demand leads quite naturally to a focus on more equitable distribution. For example, if all the money spent on advertising to create demand out of thin air were devoted to price reduction, then it is likely that some more of the real demand out there could be met. I wonder why that is not what happens. Genuinely wonder.

Do you have any thoughts on that? I am not able to think it through properly, as yet

Edited by FionaK - 30/8/2012, 10:13

I have been thinking more about this, largely through ideas expressed in fantasy novels. That may seem a strange chain of thought but fantasy novels allow us to explore possible worlds in ways that are not otherwise open to us: or are, but we need to think it through in settings not constrained by our experiences: or not so much.

One author I really like is Ian Banks. He has a future society, explored through a number of books, called the Culture. A major theme of that society is that it is one in which scarcity does not exist. It is not the only society in the universe he creates, and so the culture must live alongside other worlds and races where scarcity is not abolished. Much of what he considers is about the implications of that. But what I want to talk about today is the fact that in his universe there are sentient machines which basically do all the work. Those machines have different degrees of sentience. The highest have rights: they are not slaves, nor are they servants in the conventional sense. Nevertheless it seems that we cannot conceive of a universe in which true abundance can arise without the use of a working class: and to allow all human beings to be free we have to have some other group which will provide our needs and our wants without exploitation: in this case that is achieved through technology.

That is not a new idea in itself: it is in fact a proposed explanation for high levels of unemployment now. According to this theory people are no longer required in huge numbers to produce the things we currently want and need: and so we have increasing unemployment and therefore poverty.

Banks does not see a necessary relationship between those things; and nor do I. I do not see work as a moral good, though that is the song we hear sung so frequently in the attack on "scroungers" so common in our mainstream narrative. Work is not a moral good: it is not desirable: it is no fun. That is why they pay you for it. As Banks says, the existence of money is the mark of poverty: if we were rich there would be no such thing.

But what occurred to me was that this is where we are now, in reality. Or at least it might be. We have enough food to feed everyone; we have enough surplus to clothe and house everyone; we can afford to educate everyone; and on and on. It is true this is a finite planet and it is possible that we will run out of resources and so that will not continue to be true: but it is true now. But only if you deny that "demand" is unlimited, as I do.

What would the world look like if that was accepted?