For some time now I’ve suffered from a modicum of economic confusion. Despite having studied and passed GCE ‘O’ Level Economics as a kid, (when exams were actually worth the paper they were written on), and having a reasonable grasp on current economic affairs, I sometimes have difficulty getting my head around our crazy cost of living.
Why do things cost so much in the first place? Why do manufacturers produce too much of one thing and not enough of another? Why do various commodities appear to constantly increase in price? Why do we purchase stuff we don’t really need and just as importantly, why do we discard so much of what we purchase, without even using or consuming it? Why has my Nation become more commonly known as ‘Rip-Off Britain‘ by so many consumers?
This week one of the bloggers I follow commented on what he refers to as our ‘tinned soup economics‘…
Allcoppedout’s Blog: …Our governments are ‘printing money‘ to some massive tune and our banks are awash with the stuff, seeking to make more money out of it than the mere fees they extract in buying it. This all leads to my Heinz Tomato Soup four packs surging up in price more or less overnight… Read More
I have a long held belief that our ‘market economy’ operates to a contrived and totally false set of ‘supply and demand’ rules or ethics, one where suppliers and producers simply price at a rate which has little to do with production costs. They just charge as much as they can get away with and we’re stupid enough to pay!
Firstly manufacturers, producers and suppliers convince us we want something by aggressive marketing. Secondly they make us need more because of the confusion they create with ‘best before‘, ‘use by’ and ‘sell by’ ‘shelf life‘ dates. Thirdly things are designed in such a way they have an intentionally short lifespan . Finally they charge higher prices i.e. more we want it the higher the cost. And, as with the fuel price news today, if they can engineer some excuse to suggest a difficulty in the supply chain all the better, they hike the price yet again…
The price of petrol and diesel at the pumps has reached record levels, with a reduction in the European market cost of fuel not being passed on to UK consumers, the AA has said… (Read more)
The days of simply producing what is needed or can actually be consumed have long gone. Production cost plus a simple and ‘reasonable’ profit margin percentage mark up is a business ethic of a bygone era. There is now a pressing need to feed the greed of CEOs, marketing executives, middle managers et al. We are partly to blame; having continued to pay the asking prices over the years, instead of challenging them, we have simply demanded higher salaries to support our consumer greed.
Those who drive and control our economy are driven by a simple desire to make money, either for themself or the shareholders, ethical considerations are simply a hinderance. A lot like many areas of our society today. Perhaps there are some advantages to being domicile in a third world nation were they live more hand to mouth or, perhaps the time has come to return to barter systems and wages paid in groats?
Economics and Ethics don’t mix when there’s money to be made!
- The Rip-Off Britain – The Consumers Champion
- Martin Lewis – Money Saving Expert
- The Economist Magazine
- The BBC Rip-off Britain show
- Money Supermarket
- This Is Money – Financial website of the year
- Why Britain is being ripped off (telegraph.co.uk)
- Osborne hits back in row over petrol prices (independent.co.uk)
- Fuel up only in UK (thesun.co.uk)