Move over markets

I drafted this post a few weeks back and titled it, The forgotten purpose of markets.  But in the meantime I have been reading the Book, The Power of Pull. I have been writing for while about how demand and supply notion in economics will (is) disappearing but I never really nailed a replacement for markets, the authors of the book have, Collaboration Curves. Maybe this will be shorted in time to just Curves.  I have written about collaboration a good while back in the context of competition.  A Curve will mean much more than a market.  The push of supply to meet predicted demand (or demand made certain by muscle marketing campaigns) will be replaced by real time ‘learning’ to adapt to what the world (people of) need, the author of the book articulate.  More on the book in a later post, now the thoughts on why market forgot their purpose?

One example to be extrapolated to every market.  Car insurance, switch on any television or read a range of web pages and the chances are your attention has consumed a car insurance advert.  ‘Cheapest car insurance’, this comparison shopping site can find you the ‘cheapest car quote’.  The advertising is just the sales/distribution mechanism in the market and should make sure the same ‘product’ is priced accurately through ‘competitive’ forces is what we will reads as the purpose of this part of the market.  There is just so much noise in this activity if feels like its the whole purpose of the market?  Obviously, it will be pointed out that his part of the market is where the interaction with the ‘consumer’ is, therefore, it will dominate the individuals attention.  It is time to get to the heart of the market, in this case the car insurance market (compulsory for car ownership in the UK, already the market is tainted).  We have a 10k car, there is a 1 in 10 chance of having an accident every year so in a world of 10 people, we all pay 1000 premium each year as the one person that writes of their will need to pay 10k to replace their car.  Now, as a society of individual we want to pull together all those individuals that see the benefits of sharing the financial risk of replacing a car in case of an accident.  What the current market has evolved to is to segment the risk of types of individuals, thus they have different prices and they can pass risk on to investors, i.e. the premiums do not cover all the risk in the market, so financial investors to speculators can plug the gap if needed or is less accidents happen then they collect the windfall.  These gap players, syndicate the risks again and again.  Try putting all that into an advert I hear some of you cry.  As the credit crunch shows this is pretty much a black box of transparency and no one really knows if the purpose of the market is in equilibrium?  Repeated evidence suggests this is all out of whack ( no body really knows even though that purpose of the market was unknown from the outset, that is why the market was born into being).

This is really a collaboration curve of mobility (we’ll narrow it to driving a car) (not a market).  In a market individuals that want to pull together to reduce financial risk but this new mobility curve will be much further reaching, it will include all information to make sure an individual get to A to B when they need to move and with nil risk of an accident occurring.  The truth of a mobility curve purpose will be the aggregate all the participants needs.  No marketing segmentation noise (advertising) a price to get you in the door will be required.

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