Friday, 16 June 2017

Positional goods

Many things bother me about the state of the world. One idea that made a deep impression on me when I first read about it in "Social Limits to Growth" by the  late Fred Hirsch is what he called positional goods. I took a couple of Prof Hirsch's courses at Warwick, and learnt a great deal from them (I could have learnt a great deal more, but a memo from him tucked inside my copy of "Social Limits" explains why I didn't: it starts "I don't seem to have been seeing you at the seminar lately ..."). I bought his books, and remember struggling to read "Social Limits" during a sleepless night at the British Grand Prix at Brands Hatch, when camping in a tent brought on an attack of asthma and I spent several hours sitting in the Hillman Avenger in which my brother and I had travelled to the event. But I digress - except that this explains why my attempt to read the book were less than successful.

I did, however, take on board the idea that there are limits to growth. If everyone moves to the countryside because it's pretty and quiet, it will cease to be pretty and quiet. This is happening right now all around me. And contemplating what I think JK Galbraith identified as the problem of private affluence and public poverty (highlighted by the appalling death toll in the Grenfell Tower fire, which must have at least something to do with the public sector being starved of money), I wonder how the super-rich imagine they will derive any pleasure from their wealth if, as they travel between their City base and their place in the country, they have to negotiate traffic jams and potholed roads, or a rail system brought to a halt by defective signals or a "jumper" (a "person under a train", in official language). Even if they fly, they will see plumes of smoke from burning tower blocks. Not every day, of course, but once in a decade is much too often.

So, houses in the countryside are positional goods. They rely for their value on scarcity. This thought brought me to something else which has troubled me for years (though it is not something that would ever bring about the end of the world*), namely parallel imports of luxury goods. Trade mark owners resist parallel imports because they interfere with their pricing strategy, which is based on maintaining exclusivity, which means that luxury branded goods are positional goods like country cottages. Consumers - some of them, anyway - want to be able to buy them cheap from Tesco, but the whole point about positional goods is that if they are available cheap from Tesco they are no longer worth having.

Hirsch also wrote about the commercialization effect (and yes, he did spell it with a "z"), under which supplying something commercially diminishes the quality of a good or service. Or, to put it another way (as Wikipedia does) "market exchange ... diminishes the inherent value of the transaction by subordinating social well-being to the commodification impulse." And that leads me to think about commodification (a topic on which Marx had a lot to say), which seems to me to be what intellectual property law is all about - taking intangible creations and turning them into something that can be traded. There's a lot to think about here, and I think it is now high time I read the book (which I notice I bought in 1980 at the bookshop at Conservative Central Office, and that in itself raises some interesting questions).

* Although as my old friend - as in, he was a friend a long time ago, but I have not seen him for many years - Sir Michael Fallon once said, "it's not the end of the world - but you can see it from there". No, I won't tell you of where he was speaking.

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