Tag: economics

Finite Resources

It was a restless night.

I tossed and turned repeatedly, failing to summon slumber.

I was away from home, lying atop a mattress that was too thin and too firm. And I was struggling to get comfortable.

Still, that only explained half of the issue.

For it was a sultry summer night. The air conditioner was going at full blast to combat the muggy conditions outside. But it had turned the guest bedroom into an icebox.

I’d covered myself with a blanket. But it was only so wide. And with each toss and turn, the blanket folded in on itself like a piece of origami.

As the night went on, I felt more and more of me freeze. First, my foot was exposed to the chilled air, then my lower leg, my arm, and my shoulder.

When it became unbearable, I’d shake the blanket free and toss it over my body. But a few tosses and turns later, it would be back to where it was. And I’d be cold again.

It was sometime around 2 AM when I realized the futility of my situation. The blanket was simply not built for my sleep patterns.

I wouldn’t be able to feel fully comfortable in this bed. Each movement I made would come with visceral tradeoffs.

These were the facts. I’d just have to live with them.

Not too long ago, I was watching a hockey game on television.

At a break in the action, a QR code appeared on the screen, promising a chance at a $10,000 grocery giveaway. The winner would get the reward in monthly sums over the course of the year.

I scanned the code and entered the contest. But my name was not picked.

Disappointment washed over me when I learned this news. But it quickly faded.

For I realized that I typically spend far less a month on groceries than the contest promised. And I could still pay for my smaller grocery haul with the plastic card in my pocket.

That card was tied to my bank account, whose balance swelled each time I got a paycheck from my employer.

So, even though this streaming service wasn’t subsidizing my food, I was covered. My employer was footing the bill.

Or not.

My employer, you see, wasn’t simply doling out money from a bottomless vault to keep me fed. It acquired those funds by selling its goods and services to others. Those others were businesses in the insurance industry, who used those goods and services to help provide coverage to consumers.

Many of those consumers were individuals, who covered the value of their homes and vehicles with monthly insurance premiums. The money paid toward these monthly premiums came from their own paychecks – which their employers provided after selling their own set of goods and services.

The dizzying chain I just described is work of the economy. It’s an illustration of the patterns of supply and demand that keep our capitalist society running.

The economy is what keeps us fed, housed, clothed, employed. It’s the engine that keeps us going.

That engine is fueled by two things – finite resources and market participation.

Finite resources mean there’s not enough of everything to go around. There are only so many loaves of bread, pairs of pants, or shiny new vehicles we can produce, for instance. And there’s only so much money we have to offer in exchange for them.

It’s as if we all have a blanket that’s too narrow. We can’t have it all, but we can make tradeoffs to improve our situation. We can participate in the marketplace – as buyers and sellers – to better fulfill our needs.

But if we get too close to the edge of the blanket, market participation breaks down. It becomes too difficult for companies to offer up enough goods, or too expensive for individuals to procure them.

Everything shuts down. And everyone suffers.

It’s an uncomfortable prospect. But one that’s all too real.

Follow the money.

Those three words are perhaps the most memorable of the 1976 film All The President’s Men.

Washington Post journalists Bob Woodward and Carl Bernstein have seen their investigation run aground. What started as a story about a burglary has unfurled a broader government conspiracy. But Woodward and Bernstein can’t seem to connect the dots in a manner that is safe for print.

Eventually, Woodward and Bernstein contact a shadowy informant, who urges them to follow the money. This turns out to be the missing link in the investigation.

A trail of payments would ultimately tie the break-in to the administration of United States President Richard Nixon – who seemingly authorized the heist to get intel on his political rivals.

The Washington Post would soon publish its report on what came to be known as The Watergate Scandal. And it would ultimately cost Nixon the presidency.

Following the money is now a central tenet of investigative journalism. It has a way of exposing even the most covert activities.

But following the money can be illustrative outside the newsroom as well.

Indeed, in a world of finite resources and market participation, money speaks loudly. It telegraphs how everything is meant to play out. It provides a map through the chaos.

That is, if we’re willing to pay attention.

That hockey game I was watching – the one with the $10,000 grocery giveaway –was being aired on a new streaming service.

This new service promised to air nearly every game for my local team. All for free.

I was flabbergasted to see this claim.

You see, I’d hardly watched any of my local teams for free before. I’d either paid for a ticket to go to the game or paid for a subscription to watch game telecasts on a cable or streaming channel.

Football offered an exception to this rule. Networks like CBS, FOX, and NBC carried free game telecasts year after year, thanks to decades-old broadcast agreements.

But that was an anomaly.

Indeed, pro hockey seasons included nearly five times as many games as pro football seasons. And to remain solvent, hockey clubs have traditionally relied heavily on fans to pony up for viewing access.

I couldn’t imagine that financial model changing overnight. So, what would be filling that revenue hole for my local team now? If I wasn’t paying for my viewing access, who was?

As I write this, I’ve yet to figure those details out. Just as I’ve yet to determine who’s subsidizing the restrooms at shopping center I recently visited.

Those facilities were too clean and well-furnished for public access. Someone was paying to keep them pristine.

Yet, I continue to dig. On both counts.

Why? Because I know the score.

There are no free rides in the realm of finite resources. Even if someone else is footing the bill, I’m still paying for those game telecasts and fancy public restrooms somehow.

The more I understand this arrangement, the more sustainably I can avail myself of it. Without being abruptly left out in the cold when the blanket folds in on itself.

I’m not alone in this regard. We can all enjoy these benefits. That is, if we Author Dylan BrooksCategories ReflectionsPosted on

The Fixed Pie

I wish I had more.

These five words are at the start of so many statements of regret.

Some share those words while pining for a loved one who left their life. Others use them as they share dismay about their financial situation. Others utter them to rue missed opportunities.

Such laments can seem trite. After all, we live in the land of abundance. Why curse the past when the future is still to be written?

And yet, I think these five words can stand for something substantial. In fact, I believe they’re the key to setting our lives on a more sustainable course.

America is a land of entrepreneurs.

From coast to coast, there are plenty of people who’ve created new ventures or taken nascent businesses into household names. Often devoid of supporting resources, these entrepreneurs rely on instincts and guile.

This idea of pulling oneself up by one’s bootstraps is ingrained in American heritage. Ever since the frontier era, we’ve had to be scrappy to survive.

This has provided great risk. But with it has come great opportunity.

Prosperity is not limited to those who score the best on an entrance exam, who train with the right mentors, or who have the best connections. College dropouts can create billion-dollar companies. Single parents can turn side hustles into empires.

Although I took a rather conventional path in my career — completing my undergraduate degree and later getting a Master’s in Business Administration— I have great respect for entrepreneurs. What they’ve achieved is admirable, and worthy of praise.

However, there’s one element that concerns me about the Do-It-Yourself playbook. Namely, that it often leaves budding business minds without an understanding of economics.

Now, economics is hardly the most prized corner of business education. Theoretical by nature and dominated by pessimistic academics, it’s a discipline that’s often mocked.

Economics doesn’t help balance the books, ward off competitors, or sell more items. It simply explains the shifting playing field that business is conducted on.

And yet, that’s precisely why it’s so important.

You see, economics forces us to reckon with reality. To master it, we must learn to properly allocate scarce resources. This often means taking the least bad option, recognizing that such choices will expose vulnerabilities.

There is no way to have all the upside without any of the downside. For a central tenet of economics is The Fixed Pie — the idea that there’s only so much to go around.

It’s a basic principle. An inevitable one.

But it’s a principle that has all too often been ignored — by both the entrepreneurial community and broader society.

To infinity and beyond.

So goes Buzz Lightyear’s catchphrase in the movie Toy Story.

I was only a child when this film hit theaters. I had no idea how ridiculous this phrase was at the time. I didn’t understand that there was nothing beyond infinity to shoot for.

And yet, all these years later, there are some adults who fail to see the irony of Buzz’s words.

As the world has gone digital, the desire to go beyond infinity has grown. Companies have exploded in size and valuation, unencumbered by the constraints of the analog world. People have been able to save artifacts to the cloud without inviting that musty attic smell. The ultra-rich have seen extra zeros added to their name as they eat breakfast.

The eternal hunger for more is being fed at warp speed, without much to slow it down. And yet, we are fraying at the seams.

For try as we might, one dimension resists the vacuum of acceleration and leaves us flailing in its headwinds.

That dimension is time.

Time. It’s inevitable.

There might be trillion-dollar companies these days, but there are still only 24 hours in a day. And while we might live longer than our ancestors, we’re only young for so long.

I’ve written before about our efforts to defang time. I’ve spoken out against our ill-conceived efforts to defray it into oblivion.

Such warnings seem prescient, particularly in the wake of a pandemic that spawned widespread burnout. And yet, I feel no desire to take a victory lap.

For I have failed to heed my own advice. I too have tried to bend time to my will.

Indeed, as the world slowed down during the pandemic, I sped up. I accelerated my efforts to stay fit, stay fed, and stay fulfilled.

I’ve largely achieved these goals. But they’ve come at a cost.

I’ve been getting far less sleep than I did just a few years ago. Not because of insomnia or restlessness. But because I’m doing so much in my day-to-day.

I know that this dearth of sleep will catch up with me sooner rather than later. Yet, I still find myself clinging to the false belief that I can take my productivity to the max.

Why? Because I’m human.

I don’t want to choose. I want all the pleasure and none of the pain.

Even if it’s all a grand illusion.

There’s an old tale of a couple living in paradise. Blind to their surroundings, they lived in uninterrupted bliss.

Then, a serpent brought temptation into their midst. The two of them ate from the forbidden fruit and encountered knowledge for the first time. Shame and hardship quickly followed, as they were banished into the cold.

The tale of Adam and Eve is our origin story. God might have created them, but their saga created humanity.

And yet, it’s often viewed as a cautionary tale.

We openly wonder what would have happened if they hadn’t bitten into the fruit. How idyllic would life be?

Our recent exploits seem like attempts to answer that question. Our pursuits of perfection and abundance seek to send us back to the Garden of Eden.

But despite our efforts to avoid it, reality is out there. The fixed pie is omnipresent, and with it comes tradeoffs. Getting what we desire often means giving up something else we covet.

Those who pine after what they’ve lost might sound pitiful. But at least they’re clear-eyed.

They’ve played the game. They understand its rules. And they know better than to hide from the inevitability of tradeoffs.

Perhaps we can learn from them. Perhaps we can drop the charade and accept our circumstances. And perhaps we can use this awareness to find more equilibrium.

This might not lead to a better life. But it will allow us to live life better.

And that just might be enough.