Sunday, October 9, 2011


Who Controls Which Resources?

This is a crucial question.  Why?  Because how resources are allocated will determine more than Global Economic Direction.  It will determine survival.

Economic Resources

Economic resources are learned at an early age.  In fact, as early as DayCare.

What are the topics of concern?

The Source of the Resources.

The Quantity of the Resources.

The Quality of the Resources.

The Control of the Resources.

The Allocation of the Resources.

The Demand for the Resources.

Simple stuff, eh? 

Back to DayCare

A few years back, social scientists released the results of a study suggesting that children in DayCare are more aggressive than stay-at-home children.

This did not elicit a response.  This elicited a reaction.  The result?  A learning opportunity was lost.  The lesson not learned is about economics. [It did, however, reveal a crucial resource--validation.  More on that later.]

In a DayCare Centre you have fixed resources and variable, and unpredictable, demand.


5 Paint & Easel Sets

5 Colouring book & Crayon Sets

1 Set of Blocks.


Monday:  Six boys want to paint.  One is left out.

Tuesday:  The boy who missed out on Monday scrambles for one of the Paint & Easel Sets--only to learn that the five other boys opted for the Colouring book & Crayon Sets; or worse, Building a fort with the blocks.

Some boys are naturally more aggressive. Others are more passive.  Some end up playing solitaire with the teacher.

Everyone can't be the leader

What makes a leader?  "Look behind you.  If people are following you, you're a leader.  If they're not, you're not." --Slim Fairview.

The teacher can schedule and allocate the resources.  However, this will stifle the development of leadership and of negotiating skills.  It will impede cognitive development and individual growth.  It will disrupt group harmony--yes it will!  Finally, it won't work.  No one wants to follow the person that the teacher put in charge.

The Stay-at-Home Child


The stay-at-home child has toys.  However, he can also see "a growth curve".  A birthday, Christmas, Grandma and Grandpa are coming in from Indiana to visit.  The growth curve may be intuited, however, it does exist.


The stay-at-home child can, in a manner of speaking, control the demand.  Invite one friend?  Invite two friends?  Also, he allocates the resources.  Let's review the list:

The Source of the Resources.

The Quantity of the Resources.

The Quality of the Resources.

The Control of the Resources.

The Allocation of the Resources.

The Demand for the Resources.

Market Disruptions

There are, however, market disruptions.

"Surprise, Tommy, your cousin is coming for a visit!!"

Mommy smiles.

Tommy Smiles.

Experience kicks in.

Which cousin?

Steven with Aunt Polly or Odious with Aunt Bertha?

Tommy learns to make value judgments.

Mom cannot "sell" Cousin Odious and Aunt Bertha.

Neither cousin is deprived.  Steven has manners.  Odious does not.  View  those facts as prevalent characteristics of a demographic subset--Norms!

How Resources are Allocated and the Effect. Utility

I once said, "I learned more about management from reading novels than I did from reading textbooks."

It would be too simplistic to describe Dr. Zhivago skulking home with wood concealed beneath "Gogol's Overcoat".  No, we need more than that.

Heinrich Böll's, Group Portrait with Lady, illustrates my point more effectively.

In the novel, Leni Pfeiffer, works as a florist.  Coffee is rationed.  Each co-worker makes his or her own coffee. To make the coffee last, each of her co-workers adds chicory to the coffee.  What is crucial is the ratio of coffee to chicory.  Those using more coffee are viewed suspiciously by those using more chicory.  A potent image.  A bad omen.


You are just in time to arrive at a very important meeting.

There is a parking space in front of the building.

The traffic warden is down the street and heading your way.

You park--you have 8 quarters in the console.

You open the console.  There is 10 dollar bill a note:

"Needed change.  You made a 500% return on your investment.  Ha, ha."

This is not funny.

You see a panhandler.  You offer him $10. for four quarters.

One metaphorical dollar has a value of $10.  Why?  Form Utility.

The panhandler starts to haggle.

You tell the panhandler if he doesn't agree to the deal, you will get in your car and drive away.  He will have only one dollar and not ten.  He agrees to the deal.

In two minutes, those four quarters will have no value.  Time Utility.

You are now prepared to go into the meeting with the ability to make your point with both authority and clarity.  You can paint a picture.

Supply and demand.
Form Utility
Time Utility

This is all more than a EuroZone issue.  This is a Global Issue.


The EuroCrats no doubt know the principles of economics.  The problem arises from the lack of ability to apply that knowledge to real problems in a real way.

This brings us to the point I touched on earlier:


First, if you never read the fable "Stone Soup" Google it now and read it.  The story is an old one.  The story is a European one.  The EuroCrats have forgotten it.

The EuroZone nations are more focused on symbolic gestures than they are on substantive gains.  They are seeking personal and professional and national validation.

I will make it simple.

You have a problem.

You do something.

The problem gets worse.

You do the same thing.

The problem gets worse.

1st step:  Don't do that!

"The fact that we must do something is no excuse to do something stupid." -- Slim Fairview.

The Zero-Sum game is no longer viable.  It is a deadly game.

Let us review.

The Source
The Quantity
The Quality
The Control
The Allocation
The Demand

And, of course, the Validation.

Bon Chance.


Copyright (c) 2011 Slim Fairview