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It’s all about the producers
You’ve likely heard of Kickstarter; it’s an online platform used to raise funds for creative projects. It allows producers to pitch an idea to potential investors, who can then pledge money to support the idea. Kickstarter is sort of like a venture capital introduction service, except the “investors” don’t end up owning any part of the idea or its production; they receive other perks.
The takeaway here is that Kickstarter helps creative producers produce something. In any economy, the producers (especially producers of something new) often need others to invest in their ideas, with economic “stimulus,” to make them a reality. Getting their ideas financed is what fires overall economic growth: an economy gets bigger as new ideas occur to people who, with help, bring them to life.
Investors know this is how economic growth happens, and so do most producers. The only people who don’t seem to understand it are economists working for the government. For them, economic growth requires stimulus not for producing things, but for consuming them.
At least, that’s what Keynesian economists think. John Maynard Keynes, an economist who gained popularity during the Depression, believed economies tanked because of too much saving. To get things moving, he thought the government should stimulate spending and discourage saving.
The original theory went that, in a slump, there’s a glut of stuff. When people are saving their money, stuff sits on shelves and we enter a state of over-production. What the theory ignored is that gluts are easily resolved by the price mechanism: prices fall until the market clears. But Keynesians (and their friends in business) didn’t want to rely on the price mechanism; they wanted to keep prices high and give government planners something to do. Their job back then, and still today: get people buying stuff to sit on tables at home rather than on shelves in a store. And get them to buy now - not later, when prices fall.
Eventually Keynesian theory dissolved into a broader belief that consumption should be stimulated all the time - not just during gluts. Modern political administrations, including those of Bush and Obama, are guided by the general belief that an economy runs on consumption. That spending creates production. (This is false: production relies on investment, not spending.) But we’ve been using this bastardized, consumer-focused Keynesian idea for decades now, and even though we all own tons of cheap stuff, our economy stalls out regularly.
The consumer-focused, shop-till-you-drop message has clearly been received, but is it logical? And is it working?
No, and no. To see the absurdity of consumer-focused thinking, apply it to the process of arts funding. Imagine a Keynesian patron of the arts - something like a Kickstarter campaign - not for the playwright, but for the audience. The stimulus is provided not to the people creating, but to the people watching.
If they come, you will build it.
And why not? According to Keynesians, spending creates production! Except that it doesn’t. Audience spending doesn’t get the play produced; it occurs only because production has already taken place. The Kickstarter paradigm helps us see the order and the mechanism behind economic growth. And it’s a fairly simple one to understand.
Meanwhile, the Keynesian economists in Washington invest in the audience, hoping to inspire the playwright.
"The GOP (half the gov’t) is Walter. The Dems (the other half) are the Nihilists. Both of them have their eyes on money that’s not theirs. The free market is the Dude. He just wants his rug back because the rug was his to begin with."
The plot point that just sits there
When I first learned screenplay structure, reading Syd Field’s treatise on the subject, I was captivated by his definition of plot points - those pivotal moments when the main character makes a discovery or a decision that turns the story, and launches a new direction.
It was then I began to see “Life” as a series of plot points. Every decision I made caused me to wonder, Was that a plot point, just now, in this chapter of my life? And if so, was it Plot Point 1 or Plot Point 2? Was I headed into conflict? Or resolution? I suppose I could now see them everywhere, because they were there all along; plot points are a part of life. Otherwise, why would we include them in our stories?
The best plot point of all time occurs in Steve Martin’s “The Jerk.” After a nice set-up in Act I illustrating Navin’s current family life (I was raised a small, black child…), he makes a fateful decision to leave home and find his true self. He says poignant and funny good-byes to his family, dramatically erects his thumb to begin his hitchhiking journey, and the audience sits back, ready for Act II to begin. But in one of the funniest moments in cinema, the plot point just sits there, a hanging chad that continues on through dinner, becoming more evident when his sister asks Navin how he’s doing, out the window, several hours later.
Which led me to another revelation about life: plot points are even better when you mess with them.
Ode to the Labor Theory of Value
(in quatrains of iambic pentameter)
From Smith to Marx, a value came about
When work and time were measured, in and out.
And prices? They were set by measurements
of worker’s time and sweat and nourishments.
“A sweater’s worth the time it took to knit;
A prune will cost the toil it took to pit.
Two deer are worth a beaver in the field,
‘Cause hunting beavers brings a lower yield.”
But Menger saw that value wasn’t fixed;
Jevons and Walras said a value’s mixed.
My value’s on the margin: last bite chewed -
Not based on how the baker’s work ensued.
From different needs the buyer brings to bear,
And costs the seller pays to make the ware,
The value varies when a market’s free;
Exchanges happen when we can agree.
-Stephanie Herman
Kristen Wiig plays ‘Everywoman’ in Bridesmaids
Do you ever walk out of a movie theater feeling like the main character you just watched on the big screen? That happened to me as I was leaving Bridesmaids, even though I’m the opposite of everything Kristen Wiig portrayed: I’m a brunette, slightly overweight, married, stay-at-home-mom of two, living in a nice suburban house, and I drive an Audi. The one time I was a maid of honor, there were no bridesmaids at all to compete with me. Still, I could completely relate to Wiig’s funny, loser character; I suppose everyone can.
Wiig’s greatest achievement in Bridesmaids: making the audience feel sorry for a funny, beautiful, thin blond.
Don’t buy soap, and you can afford to see more movies
A little known but wonderful - and free - book called Cost Benefit Simplicity (excerpt pictured above) can change your mind about supply side economics. Because this book shows you that being more careful with the supply side of things can actually help bring about a more sustainable economy in terms of resources. Consumption is something our government has been pushing since the Depression, but consumption is not really the great Keynesian panacea government would have you believe.
In order to get around the consumption conundrum, this book recommends consuming more services and fewer “consumables” - goods that are used up and thrown away when you’re done with them. Using this definition, taking in a movie at the theater is a great “service” and if you don’t buy the overpriced candy, you have nothing to throw away when you’re done.
So how can we shift our consumption around - even more - to be able to afford to see more movies? Stop buying soap and start buying baking soda. Here’s why. and here’s how: Cleaning-Green.Net.
My own favorite tweet of the day
@BillyandAdam Next, we need a rap vid of Jevons, Walras & Menger all getting marginal theory at the same time. Call it, Jinx! #economics
