Saturday, May 18, 2013

Economic Demand: the chain of events

While shopping at Bed, Bath and Beyond one day, I couldn't help but notice all the junk for sale. I found myself fascinated by the "as-shown-on-TV" products displayed at the checkout stand just waiting for the impulse buyer. Who buys this stuff and why? Do these items last more than just a few uses before they break?

When I look at my own kitchen, I think of the things I have bought: glasses, plates, utensils, storage containers and cooking tools. I have one of those fancy-pants blenders - it works great, but one of the clips broke. I have to find a way to get one of the parts replaced and I'm not sure I can get it replaced. Maybe 3-D printing can do the job.

I like to buy things of better quality with a bit more money. This way, they last a long time and I'm not buying the same thing twice or three times or more. I sincerely enjoy a product that lasts longer than I expected and that I can truly use until it is worn out. In a way, re-use is the best way to recycle. Some of the items in my kitchen are more than 20 years old and need no replacement. They just work.

This is what I think of as a frugal state of mind. I developed this state of mind from a thought experiment. I considered what would happen if I dropped a drinking glass and it broke. What happens when I buy another one?

First, I plan a trip to buy a replacement glass among other products at the source, the store where I bought it. That requires gas to make the trip. Then there is the time to drive there, locate the replacement product, put it in the cart, check out and drive home. The process of checking out will require access to hardware to scan the product, and a computer connected to several database servers.

The computers record the products purchased, the buyer, the time and the method of purchase. If a credit or debit card is used, then transaction clearing databases are used to ensure that adequate funds are available while processing the transaction. This part of the data processing is not the most interesting part.

When a purchase is recorded, it is recorded as demand for a product. An entire supply chain exists to meet that demand. The supply chain ends at the store shelf and goes back to a distributor, manufacturers, and raw materials suppliers. All of it without exception, comes from the earth. Every time we buy anything, anything at all, we are imposing a demand on the earth - our source of sustenance, our environment.

Think of that drinking glass again. We have more than 7 billion people on the planet. Imagine the burden imposed on the earth to supply 7 billion people with drinking glasses. Do the same thing to a t-shirt, a table, a computer, a cell phone, or even a car. It is truly mind-boggling to realize the effort required to bring all those resources together to meet demand on a global level. What is even more mind boggling is what will happen to our home (this big blue marble) if we try to meet that demand without developing clean energy or far more efficient recycling processes.

My thought experiment has taught me there is more to being frugal than just saving money. It is a state of mind that recognizes the demands we place on the world we live in when we buy a single drinking glass.
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