Purchasing Power

I read a blog the other week that called our current times, The Age of Choice.   It was about all the information that is available now and the choices we can make because of this additional information.   They looked at it from a more global perspective, but I wanted to take a look at consumer purchasing power.  In our current times we have some of the best information available.  This allows us to use the purchasing power we have to affect change in the marketplace and the world.

A brief history of purchasing power would go something like this –

Early in the market economy consumers were just happy to have the ability buy the goods. This was a transition from people producing everything for themselves to specialization in a trade or industry.  As the market economy expanded increased specialization led to increased market efficiency.  For example, a seamstress would concentrate on making clothes.  He or she could make higher quality clothes cheaper and faster than a farmer trying to make his family clothes while producing the food as well.  The farmer realizes that if he trades some of his food for clothing he can concentrate more time on farming and produce more food more efficiently.  This creates a market where there are more goods available at lower prices.

This small example repeated itself in almost all industries all over the world until most of the population had a specialty and traded the excess goods they produced for other necessities.  As the market became more efficient certain people began to accumulate wealth and invest this money to produce faster and cheaper.  This created the industrial revolution which eventually led to the production line.  The production line is extreme specialization; the workers do not specialize in one product, they specialize in a single part of the product.  This also took power away from the individual employees and put it in the hands of those that owned the machines and factories.

After the industrial revolution and the invention of the production line, producers had all the power.  They were able to keep wages low, control what was produced and ultimate goal was to produce the cheapest way possible.  Consumers were getting paid less but also had cheap goods available to them.  Both world wars and the depression put strains on the supply and demand of goods.  After World War II the market was more concerned with producing enough goods for the public, then the quality of those goods.  Only in the past 20 years as generation X and Y have grown up without having to worry about the quantity of food or other products, or memories of the great depression have consumers decided to pay more to get better quality goods.  Consumers started to look at how goods were produced and not just price.

This trend needs to continue.  Consumers need to realize the true cost of goods including the cost to the environment and the labor market.  Energy intensive food production with large amounts of fertilizers, pesticides, and genetic modification is not producing the quality of food we need.  The same can be said for most other industries.  Inefficient housing produced with low quality material create a housing stock that uses to much energy to operate and do not have the indoor air quality that improves the life of its inhabitants.  A car industry that consistently produces larger cars with more horse power rather than concentrating on energy efficiency.  However, the industries will not change without the public demanding it.  We need to use the information and purchasing power we have to make better decisions that will influence industries to produce more efficient and higher quality goods.

This entry was posted in Financial Analysis, Green Building and tagged , , , , , . Bookmark the permalink.

One Response to Purchasing Power

  1. Nydia says:

    Another great idea when looking at Women’s Luxury Watches is the Citizen Women’s Eco-Drive Serano Sport Diamond Accent Watch.
    This type of jewelry has a wide array of prices to choose from.
    due to the fact these items are very famous for the fact that they are able to
    beautifully union the trendy style inspired by American watches from the thirties just like
    Elgin and the old fashioned Swiss timekeeper production.

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