The High Cost of The "Cheeper Economy"

As I was writing my last blog post, a topic that I ran into while working in Colombia for the Elastic Mind Project which I co-founded with Fania Castro kept coming up (and for all my Colombian friends whom are many, I am not picking on Colombia...this happens in many places).  That issue was, as the title notes, the high cost of the cheeper economy.  So in keeping with the economic strain of the last post I thought I would continue on,  delve a bit deeper into how this concept effects photographers and frankly all business owners.

To give some quick background while working in the barrios outside of Bogotá, Colombia's capital I got a first hand look at absolute poverty and became versed in the various causes and remedies.  All are far too complex for me to fully understand nor even begin to get into here, but one of the various reasons poverty exists stuck with me. That is this idea of a free economy and the closely related and more important to our discussion cheeper economy.  In a cheeper economy, products and services are expected to be cheeper and cheeper, haggled down to the last penny or peso as is the case in Colombia.  So what happens?  So sure the purchaser gets a great deal, and in a one off case this is how the so called market economy works.  The snafu comes in when the idea of cheeper and cheeper becomes deeply imbedded into the expectation of the consumer.  This cheeper economy mentality is without a question taking hold here in the US, through "free" apps and unreasonably inexpensive products through outlets like Walmart and H&M clothing. For photography stock sites like where images can be purchased for a fraction of production costs are skewing the perception of cost.  Furthermore marketing directed at consumers not privy enough to understand the nuance of these campaigns gives them an internal feeling that prices should always go down, without considering the ramifications.  And in fact they need to go down, because the consumer in a cheeper economy would have less money to spend.

 So what is the problem about this you ask?  I love cheeper products you say.  Well as Henry Ford most famously said "Cars don't buy themselves".  Economy and the alleviation of poverty for example is on one measure driven by the movement of money.  The idea of money is not to hoard vast qualities but to save a bit a move the rest, the proportion of its movement is paralleled by the movement of the economy.  In an elegant example a client pays for a service slightly above market rates, the company or person receiving that income spends it on yet another service and so on.  If on the other hand a client is just looking for a cheeper rate, there will be little to no money nor the positive physiology for the service provider to move that money.  We move into an self-reinforcing environment driven by scarcity, the scarcity of income.  This reverberates until only required products are being purchased, food etc.. The system moves into a spiral in which by every passing year the populous gets progressively less able to move money in meaningful and substantial ways.  They might not be "poorer" but less able to move the money. Therefore as stated above prices need to come down with the retail suppliers squeezing wholesale suppliers and so on. Somewhere in that chain are consumers, as workers whom untimely get fewer pay raises / less wages.

Finally photography...and lets say any small business.  Well the concepts are the same, my clients pays me high fees because they are getting high fees and so on down the line.  Its easy to point the finger at one gear in the system if the rates are too low, but unfair.  We are ultimately all inside the "machine" or as Pink Floyd says "just another brick in the wall".  I can go out and pay above market rates for everything I buy but if my clients are unwilling to pay me above market rates...well I go broke, and so will you.

I am no economist and could not fathom a solution for this economic nuance outside of pure fantasy speculation.  And in the realm of speculation, it would seem appropriate to not buy these cheeper products, but to buy fewer higher quality products at a fair / above market rate.  This would keep your expenditures about he same or a bit more while slightly nudging the economy up not down.

And finally there is the possibility that the economy as a whole is moving wholesale away from a market based economy into something entirely different.  There is the idea floating around that automation through AI and "robots" taking over mundane tasks will increase productivity so much that "working" for money will slowly fade.  But really who knows.  My guess if this is in fact the case, money will simply become more concentrated in fewer pools.

In the end the solution to getting paid seems to be, to pay.  Pay for high quality products produced in a way that ensures that everyone along the supply chain including the environment is getting fairly compensated.  Although the return flow of money is not absolutely quantifiable it will have an absolutely quantifiable impact on those producing the products, and one of those people might be you.  


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