Wednesday, January 26, 2011

Squoozernomics

The time has come to reveal squoozernomics to the world. Squoozernomics involves a proposition advanced by my youngest daughter (a political studies exponent) and the subject of intense empirical verification efforts (rather than falsification attempts) by my eldest daughter (another social science grad).

Part of the appeal of studying squoozernomics is that its tenets involve widely held beliefs – and not just amongst social scientists or the unwashed.

The hypothesis is that under capitalism there is a systematically and constantly (and irritatingly it seems) at work a process known as “turning down the squoozer” on various goods and services hitherto supplied in more generous quantity, quality or both. The genesis of turning down the squoozer is hypothesised as lying in the mean spirited nature of those who inhabit the supply side of the numerous transactions which take place in the economy.

Notable examples of “turning down the squoozer” include – reductions in the number of biscuits in a packet, making the Moro bar smaller, failure to supply hot water with coffee in cafes, and, most recently, Starbucks offering a choice of either mustard or tomato sauce but no longer both with the American hotdog. Evidence of the fact that such “squoozer turn downs” are motivated by mean spirits is exemplified by the fact that Starbucks has “two huge bottles” of both sauce and mustard parked close to the counter.

Those turning down the so called squoozer are alleged to have scant regard for and are indeed known to ignore quality, long run reputation, repeat business or any other benefit in their rampant pursuit of fulfilling their mean and base instincts.

This is apparently “obvious”.

Neither confirmation nor falsification of the hypothesis can be readily achieved by repeated empirical study. The value of the proposition lies less in such work as in the questions the proposition raises as well as what its wide uptake says about the ability of analysts of squoozer events to think on both the supply and the demand side of the equation.

In these early days of potential refutation I note that:

  • it is the self interest of the consumer (the sqoozee) which drives their irritation just as it is the self interest of the producer which leads to the turning down of the squoozer (confirming the basic Adam Smith propositions on human behaviour);
  • The squoozee seems oblivious (according to leading empirical studies) to the cost savings bestowed upon him or her by the “turning down” (contrary to the expectations of Alfred Marshall’s marginal analyses); and,
  • The wish for “static squoozer rates” betrays a desire for perfect but unattainable worlds in which squoozee demand is constant in time and space (confirming the ubiquitous nature of the Demsetz’ nirvana and greener fields fallacies).

These are but three areas worthy of further research. Squoozernomics then, offers much to improve the communication of the workings of basic economic processes.

Meantime – let’s have the mustard.

Brent

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