Mar 22, 2008

Market doesn't reflect all of people's needs.

One of my friends who is a game director in Korea one day told me, Human basic instinct likes to be violent. So the only way for us to be good is following religion.

According to his logic, the reason why many games use violence is it is our basic instinct. And the degree of gore would be getting harder and harder in future. And he was actually writing very cruel story of a new game, which includes slicing human body and drinking blood.
I tried to deny it is not true. The reason why game companies makes game cruel is not because of human instinct, but because of the market force. But he didn't admit it.

Some times the market doesn't follow people's need. Good example I have found is sugar and salt. I have never found, so far, the reason why food restaurants use lots of sugar and salt is because it is our basic instinct. I think some people might think it is instinct, then I have no example for them. At least I think it is good example for the difference between market behavior and people's need.

I also think movie is good example. Blockbuster movies usually don't care the story. But strangely many story bad movies earn big money. Does it mean people like bad story?

A little bit controversial example is food production. Market cares consumer so much. But their definition of 'Customer' is someone who has money. If someone doesn't have money, they don't count them as customer. And they say there is no need, although people die outside.

The myth that market price always indicate where the needs are is not true.

1 comment:

Anonymous said...

They don't say there is no "need", but they say there is no "demand", which is a term closely related to people's income.

Yes, everyone needs food,shelter and lots of stuff. Perhaps these desires are endless. How should limited resources be distributed among people?

Well, you can say, people in Communist countries distribute goods by rationing. Then the natural consequence is that everyone has to wait in a long queue to get their own stuff. How do you measure this loss in waisting so much time in the line? Just imagin the case in China 40 years ago, and what is happening in North Korea now.

Nobody would say, poor people should be abandoned by the society.Very few really think that government should not exist,because government can make transfers from rich people to poor people.

Market is only a way to coordinate production and consumption. If you can "design" a more effective one,you should convince us.