Date: 1 Nov 94 20:57:13 From: wpc-AT-clyder.gn.apc.org (Paul Cockshott) Subject: anticipation of demand Steve Keen wrote: >Total spending: 35.7 >Post-1980 inventions: 2.067 >1970-1980 inventions: 4.232 >1960-1970 inventions: 8.994 >1950-1960 inventions: 14.285 >Pre-1950 inventions: 6.164 > >In other words, consumers in Japan (which admittedly is at the extreme end >of the consumption spectrum) spent less than a 5th of their income on >products which had been invented before 1950. So adding a time and >innovation perspective to the system makes it even less likely that planners >could "anticipate" demand. I would have said that Japan and Japanese consumer goods prove just the opposite - just how effective good planning can be. Let us consider some of the major new consumer goods comming out of Japan in the last couple of decades : the walkman, the video recorder, the CD ( Phillips also involved here ), the audio mini-disk, high definition TV. None of these was produced in response to demand, instead large firms like Sony and Matsushita embark on long term development programs in which they plan both all the stages of the technology required to put the product into mass production, and the advertising and distribution network required to sell the goods once the technology has been developed. Consumers in the late 70's did not 'demand' to be supplied with CDs, on the contrary the demand was produced by Sony and Phillips in response to a technology that they had developed for another purpose - originally for TV laser disks. They had invested in the wrong technology for that purpose - video cassettes proved better. They therefore had to create a new market for their laser disk technology. To launch the CD they had not only to place long term orders for the mass production of laser diodes and servo mechanisms, but also to ensure that disk pressing factories were built, that agreements were reached with record companies to release the appropriate recordings etc. The planners at Sony and the other trusts did a good job and planned not only the production but the demand for the product. But this is the case with any modern consumer product. Either international trusts or the state must plan its development and launch. We may well ask whether this constant planned creation of new demand is appropriate in the light of environmental limits, but it is to turn causality on its head if we argue that changes in demand make planning impossible. On the contrary it is planning that makes changes in demand possible. -------------------------------------------------------------------- Paul Cockshott , Phone: 041 637 2927 wpc-AT-clyder.gn.apc.org wpc-AT-cs.strath.ac.uk ------------------
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