Cav's Place

The post’s title says “support”, but in fact it’d be more accurate to say that these concepts are enforced, and forced upon the relatively few who’d truly want something different without being wealthy enough not to care which way the market goes. The numbers I’m going to use are simply meant to illustrate this point and not based on anything, but they should probably give a rough idea of exactly what I mean without simply sticking to abstract concepts, which in turn may make what’s to be done about this problem slightly more obvious… Not that it wasn’t already.

Let’s assume we’re talking about a product sold for $200, at a profit of $10 per sale, and designed to need to be replaced every two years. In other words, the company making that product knows it’ll stay in business by obtaining a profit of $5 per year from the number of people it estimates it can sell the product to. Based on this, a competitor aiming to sell a product that’s very similar, if not identical, to the first one in terms of features but which is built to last an average of ten years will need a profit of $50 per item sold to stay in business, if we are to make things simple and assume that the benefits of getting all the money at once make up for the resulting additional overhead per item, since expenses don’t scale directly and bigger companies that sell more products can save more.
Speaking of this second product, it most probably will not also cost five times more to make and possibly maintain, but may perhaps cost two or three times more. Assuming this latter scenario of triple costs, it would mean that it’d need to be sold for $620. However, it’d need to be sold for $620 to as many different people as those that’d buy the first product for $200, since they’d need to buy it five times less often and therefore the difference comes only from that.
Now $620 per ten years is far better than $200 per two years, but will people see that and will this result in at least the same number buying the more expensive product? Obviously not, so this second company will need to adjust its profit margins accordingly, meaning $100 per item, resulting in a price of $670, if their number of customers is halved, or $200, resulting in a price of $770, if it goes down to a quarter. Which, of course, will only reduce the number of customers even further, and at a tenth they’ll be up to a price of $1070 per item and therefore no longer be worth it simply based on the fact that their product lasts longer.
Once they reach that point, the second company will need to start selling the brand name instead of simply the product, which requires far more, and far more efficient, marketing, which will obviously add to the overhead and drive the price up even further, which in turn will make people who realize the difference between said price and the actual manufacturing costs per item stay away even more. In theory, of course, they could even aim to become an exclusive luxury brand, selling that same product for an outrageous price to a very small number of people, but that’s a poor strategy for survival, since there are only so many spots available for such brands out there and most are already taken, plus that this is not the point of this post, since I’m talking about what the current system forces most people to use and most companies to make.

However, if we switch from a finance-based system to a resource-based one, and from the need to “earn a living” to each person not proven guilty of a serious crime having the right to use a certain equal share of the available resources, with additional amounts granted to the relatively few whose achievements would have a significant positive impact, things would be very different. After all, while the more reliable item may cost three times more to make and maintain under the current system, there’s no reason to believe its actual resource cost will also be three times higher, and in fact the difference may be marginal, seeing as many products are currently designed to fail, without this necessarily being a result of cutting corners.
The concept of a circular economy won’t change things either, in fact increasing the difference in favor of the resource-based system, because the current model limits recycling to that which is sufficiently profitable in terms of finances, while the resource-based one would pretty much enforce recycling in any situation that brings any sort of net resource gain, which will obviously be returned to the person who sent the product in question to be recycled. Not even products that quickly become outdated in terms of performance will be any different, as recycling them will return the actual net resource gain into the person’s account and not the far lower price that even reselling, not to mention recycling, such a product can fetch now.
In addition, the concept of profit has no place in a resource-based sharing economy, the price of a product always being equal to the actual resource cost, so the far more reliable product which may, perhaps at most, require 50% more resources will cost 50% more instead of at least 3.1 times more, as in the first example. And when you also keep in mind that, instead of overproduction and overconsumption, the goal would be to reduce both the amount of resources used in the long term and the amount of work required for products and services, so people will be able to spend their time on leisure activities, or focusing on relationships, or pursuing various personal interests and hobbies, or of course trying to come up with what may become those significant achievements which would be the only way to increase one’s resource share, it’s also perfectly clear that the more reliable product will also be heavily promoted in every way.

Where we are is a huge distance away from where we absolutely need to be. Far too many people consume far too much even though the vast majority still live in poverty and many don’t even have the most basic necessities met, working way too much to produce even more, constantly making wrong choices in order to actively strive to sustain an economy that’s anything but. Many may not actually be aware that they’re doing so and most don’t believe they have any other options, yet solutions do still exist… Shame that all too few care, and that even fewer would be willing to actually do anything about it before it’ll be far too late.