Economic Logic, not Illogic

Caitlin Moran:

Secondly, the definition of “Best Buy” needs to be radically changed. Except for a roof, or a Saab, it’s usually cheaper to buy a replacement than get something mended. Now, we all know that that is a fundamental economic illogic, one that is driving gigantic global environmental and humanitarian problems. Which? should be at the forefront of a campaign for there to be a guaranteed functioning lifetime for any electrical item. Manufacturers should be legally obliged to mend or upgrade the item within that time. The current system – whereby it’s cheaper to buy a new kettle shipped over from China than to get an old one repaired around the corner – is obscene. It’s an issue even more pressing than asbestos, raw sewage or the introduction of the duvet.

Err, no, this isn\’t obscene, it\’s not fundamental economic illogic. Actually, it\’s economic logic. What we actually want to have is one of two things (in fact both of them). We want the maximum of things we can have with our current technology and scarce resources: or we want all the things we want at the least consumption of those scarce resources. Same thing really. We want the greatest efficiency we can.

OK, if buying a new kettle rather than repairing an old one is cheaper, that\’s telling us that we\’re consuming fewer resources in doing so (yes, subject to the caveat that all externalities are included in the prices but the CO2 emissions in the new kettle won\’t change those relative prices much). So, it is both environmentally and economically rational to use the new kettle, as this marvellous information network we have, the price system working in free (ish) markets, is telling us that we are using fewer resources by doing so.

The resource we\’ll be using the least of of course is human time: the most precious resource of all and the one that almost all of us agree we don\’t have enough of in our all too short stays here.

3 comments on “Economic Logic, not Illogic

  1. When they start saying that something’s “obscene” they have admitted that they are being irrational.

  2. Good point, dearieme.

    She also fails to note that it is the turnover of technology that actually advances it. New cars, new fridges, etc. are all more efficient than old ones and so it can be advantageous to ditch and replace.

    Two quick questions: is illogic a word? what’s wrong with duvets?

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