Archive for the 'Economics' Category

More efficient markets

Thursday, June 10th, 2010

This is part of a series on ideas for today. There’s already an introduction and an article on artistic movements.

A┬ámarket at its simplest is a place where two or more parties trade goods and/or services. Sometimes it’s not even a physical place – something that’s becoming much more common. Parties in a market trade one good for another good, usually in exchange for money.

Your life is made up of many, many markets. You’re even participating in a market when you discuss gossip or news about mutual friends with another person. With a market, you can make use of whatever wealth you have accumulated: monetary wealth, material good wealth, knowledge wealth, a wealth of trust, and so on.

A free market, one which is least burdened by regulations and restrictions, tends towards the most efficient trade possible. That’s how we can enjoy cheaper food, clothing, and other goods than previous generations – many of the things we consume are made in places where the raw materials needed are far less than if they were made in our own country (assuming you live in the United States or some other developed country).

But enough of the economics lesson.

We each individually have resources that can be exploited, to increase our wealth, that may not necessarily be obvious. There are our hobbies, our gained supply of knowledge, our learned skills, even our accumulated possessions – all can be exploited when needed to increase our wealth in other ways. The obvious is to exchange them for money – by giving our time and expertise to an employer, for example – but one can utilize less apparent means of exchange to free up more resources.

What I’m trying to say is that we can be more efficient with the things we have. Let’s build new markets to exploit our untapped or underutilized resources. A great example of this already in action is Etsy. By creating a central location for individuals to sell their handmade products, it lowers the barrier for consumers desiring such goods. In return, the creators receive a benefit for utilizing their skills – be it sewing, woodworking, glassblowing, or any of a number of other talents. Etsy has singlehandedly untapped a vast reserve of craft making, eliminating the old barriers of location and decentralization. This is on top of (slightly) older innovations of Ebay‘s auctions and Craigslist‘s ads for housing, jobs, and other local resources. Also consider knowledge markets like Yahoo! Answers or Mahalo.

These and the many other markets are only the beginning. I’m sure there are other tools waiting to be developed to unlock underutilized resources that individuals, small businesses, communities, large corporations, and governments have lying around. It’s the same concept behind what most people think of when they hear ‘recycling’ – giving your discarded cans, bottles, paper, etc. to a third party that turns them back into new goods again for you to repurchase.

Here’s a few ideas of new markets I just thought up in a few minutes:

  • Underutilized office space rented out to startups and entrepreneurs
  • Collect and distribute writings or art either online or in another medium. This is obviously what’s been done for hundreds of years by the publishing industry, but there needs to be a new model for distributing information and rewarding the creators. An example of this is And now it’s in print*, a project that’s collecting cool things found on the internet and publish them in a print magazine.
  • Stuff lying around the house that would sell much easier by trade than in exchange for money

You may have even come up with your own untapped market that puts all of what I’ve suggested to shame. Now’s your chance to test your idea.

Aggressively pursuing more efficient markets might just help restore the economic growth that most people are searching for right now.