February 04, 2004

Failed Imagination

Samizdata has a great article on the Fixed Quantity Fallacy, the idea that there is only a fixed quantity of (insert good or service) and once those are supplied, the market is filled and that's it. Every other supplier is out of luck.

The point about the Fixed Quantity of [fill in the blank] Fallacy is that people facing a price plummet spot one consequence immediately which is a very definite win-lose situation, but they fail utterly to spot the other massively more huge benefit, which is an equally definite and far bigger win-win situation.

That's it, in a nutshell. A failure of imagination, a conspiracy of little minds is the cause of the fear of change, the fear that trade will take away job, the birth of protectionism that protects the few at the cost of the many. This pattern repeats again and again, in industry after industry, company after company, country after country. What is its source? What is the cure? Now that's a bit of innovation that would cure a great many ills; a pity nobody's imagined it yet.

Posted by TMLutas at February 4, 2004 05:18 PM