This time I have taken up in hand a topic, never ever taken before by me. Hence there is an earnest request that if at any point I am wrong, do point me out.
I was surfing through the web when a thought just went through my mind. The last depression in world economy (aka The Great Depression) occurred around 1930s. All we (as far as I believe none of my readers were there in 1930s!) know is just the history. But the thing what bites the most is that within a nominal span of less than a 100 years, we are again facing the crisis of worldwide depression. This actually depicts something.
The western economic laws are quite weird as compared to the other parts of the world. I am not going deep into the Indian economy system because it sustained us even after a long time (before this Western idea came here).
Point one. When you think about a currency note (say Rs 100), think for 2 mins. That Rs 100 note has basically no face value. It is just a piece of paper whose per unit production cost may not be exactly equal to the value which it carries in the market. Funny, isn't it? You buy things using a note which has probably got no monetary importance of its own, except the fact the we hallucinate it with that large Arabic numeral.
The second point is about the idea of consumer being benefited in competition. This is probably the most falsely accepted idea in the entire western economy. Let us take an example. Say I am a service provider of cell phone SIM cards. I have a friend and another rival to compete in the market. Now according to the Western economy, the customers will be benefited when three of us bulls will lock horns with each other to defeat each other. What if the bulls come out together secretly? What if their horns are merged to a bigger powerful system of weapon? What if we three simultaneously increase the price? BAAANNNG! Customers have no choice other than us. Let us add another scenario in this about the foreign investment. This is the answer of Western economy laws to my argument. Are you sure? Take an example of any foreign company that has taken up a day to day life commodity market to make it tough for the rogue money minders. Nope. It can't be happening. Either they haven't survived or they followed Darwin's law. Survival of the fittest and joined the money minting policies of the others. Customer is killed with a white sword now.
Third and probably the most important point is Marketing. Now the Wikipedia definition about marketing is:
"Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large"
The Chartered Institute of Marketing defines marketing as:
"The management process responsible for identifying, anticipating and satisfying customer requirements profitably"
These are just the three points which I feel are the main (and severely harmful and inevitable) drawbacks of Western economy policies. As far as I feel, their laws are more of complicated mathematics and statistical equation rather than psychological approach between consumer and company. Trust and business have a very fine and an effective bond. Even today, people lend money on trust and if anything goes wrong, that trust is redeemed. This isn't economy. This is abstract way to keep the money flowing. This is the real economy.
I heard from somebody that USA has already flunked the gold standards and is now minting the dollar notes as per its whim. Wow! My next question was, how can they do it? Aren't they flouting rules of economics? Why won't the other countries protest? The answer was, USA is a Godfather at the moment. If its building gets a small crack, other countries will collapse to nothing. Simple example of "Teri bhi chup aur meri bhi chup!" That's how "do the barrel roll" (that was a Google trick ;))
Other drawbacks do include the loan rates, interest calculations, multiple commodity exchanges, hyper sensitive stock indices (which actually shouldn't concern a country. It's only for that company) and so much more. I really think that the Western economics should be re-written with psychological factors added to all its important aspects. Just think, another Great Depression in 100 years. That means that the theory didn't even last more than most of the humbug scientific theories. A shame.
And as I am writing this post, India's rascal government has already hiked Rs. 7.50 in petrol, surging the prices to almost Rs. 77 (normal petrol). We are going to meet the same fate. Plus, we have already subtracted honesty.
All for today...
Signing off....
*Dump*
I was surfing through the web when a thought just went through my mind. The last depression in world economy (aka The Great Depression) occurred around 1930s. All we (as far as I believe none of my readers were there in 1930s!) know is just the history. But the thing what bites the most is that within a nominal span of less than a 100 years, we are again facing the crisis of worldwide depression. This actually depicts something.
The western economic laws are quite weird as compared to the other parts of the world. I am not going deep into the Indian economy system because it sustained us even after a long time (before this Western idea came here).
Point one. When you think about a currency note (say Rs 100), think for 2 mins. That Rs 100 note has basically no face value. It is just a piece of paper whose per unit production cost may not be exactly equal to the value which it carries in the market. Funny, isn't it? You buy things using a note which has probably got no monetary importance of its own, except the fact the we hallucinate it with that large Arabic numeral.
The second point is about the idea of consumer being benefited in competition. This is probably the most falsely accepted idea in the entire western economy. Let us take an example. Say I am a service provider of cell phone SIM cards. I have a friend and another rival to compete in the market. Now according to the Western economy, the customers will be benefited when three of us bulls will lock horns with each other to defeat each other. What if the bulls come out together secretly? What if their horns are merged to a bigger powerful system of weapon? What if we three simultaneously increase the price? BAAANNNG! Customers have no choice other than us. Let us add another scenario in this about the foreign investment. This is the answer of Western economy laws to my argument. Are you sure? Take an example of any foreign company that has taken up a day to day life commodity market to make it tough for the rogue money minders. Nope. It can't be happening. Either they haven't survived or they followed Darwin's law. Survival of the fittest and joined the money minting policies of the others. Customer is killed with a white sword now.
Third and probably the most important point is Marketing. Now the Wikipedia definition about marketing is:
"Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large"
The Chartered Institute of Marketing defines marketing as:
"The management process responsible for identifying, anticipating and satisfying customer requirements profitably"
Did you see the difference? Can you play a "spot-the-mistake" with me here? Maybe. Maybe not. Before going to the answer let me tell you that small and budding companies use up almost 50% of their budget in marketing and promotions. Can you believe that? You should. Now the answer or the goof which lies in the definitions and practices followed by the entire world. Feedback. Does marketing definition include a feedback criteria? Nope. A simple example of a commodity, say toothpaste. While watching IPL, you may encounter with ads of two different toothpastes. Colgate and Vicco. Both are good for your teeth and all that blah blah. But say, you're using Close Up at your home regularly, since your birth. Do you immediately wish to change to either of the two above? No No No. In near future? Only if price difference and quality difference goes considerable. Western economy does not consider the feedback of the customer. They just see the impact. Conduct surveys and so much more of bullshits which in real life do not hold any good. If you see the Indian economy or traditional barter system, business used to spread from word-to-word or mouth-to-mouth. The human psychology is quite certain. If your friend recommends you a particular book, you would rush to buy it. But say, if the same book is being recommended by a person who has actually nothing to do with the publication or the business, would you really go for it? An educated person won't nor even the villagers, nowadays, would buy it.
These are just the three points which I feel are the main (and severely harmful and inevitable) drawbacks of Western economy policies. As far as I feel, their laws are more of complicated mathematics and statistical equation rather than psychological approach between consumer and company. Trust and business have a very fine and an effective bond. Even today, people lend money on trust and if anything goes wrong, that trust is redeemed. This isn't economy. This is abstract way to keep the money flowing. This is the real economy.
I heard from somebody that USA has already flunked the gold standards and is now minting the dollar notes as per its whim. Wow! My next question was, how can they do it? Aren't they flouting rules of economics? Why won't the other countries protest? The answer was, USA is a Godfather at the moment. If its building gets a small crack, other countries will collapse to nothing. Simple example of "Teri bhi chup aur meri bhi chup!" That's how "do the barrel roll" (that was a Google trick ;))
Other drawbacks do include the loan rates, interest calculations, multiple commodity exchanges, hyper sensitive stock indices (which actually shouldn't concern a country. It's only for that company) and so much more. I really think that the Western economics should be re-written with psychological factors added to all its important aspects. Just think, another Great Depression in 100 years. That means that the theory didn't even last more than most of the humbug scientific theories. A shame.
And as I am writing this post, India's rascal government has already hiked Rs. 7.50 in petrol, surging the prices to almost Rs. 77 (normal petrol). We are going to meet the same fate. Plus, we have already subtracted honesty.
All for today...
Signing off....
*Dump*
wow....i am feeling enlighted...seriously d blog is good and those examples that you used is exactly what the readers need to understand....rest of all d price hike is a shame...
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