Parable of the Sofa

Bernie Sanders, a famous modern-day socialist, is famous for saying we don’t need so many brands of deodorant: https://fortune.com/2024/02/12/too-many-products-bernie-sand...

This is where I fundamentally disagree. Only the market, where consumers put their hard-earned dollars at work, can tell us how many brands of deodorant are needed. From skin sensitivity to smell to the chemical makeup, I don’t want a government bureaucrat deciding the “correct” number of deodorant brands. I want as many as the market sees fit.

Extending that principle outwards, the market will decide the type of sofas that can be made, and at what price.

Also the thing is that IKEA hollowed out the middle market, there is only cheap crap, medium crap but still crap, expensive crap that masquerades as expensive quality, and expensive quality.

The sofa that the author bought was not expensive quality, it was medium quality. Medium quality is good enough for just about anything but it probably isn't beautiful and high quality. The stuff you are seeing around from the old days in that are more sturdy than modern things are generally not the expensive stuff, because that stuff is still expensive. It's the medium stuff.

There is no longer any more medium stuff.

Thanks, IKEA.

On edit: feelings on matter may be colored by living in Denmark, which may be more affected by IKEA than other countries (proximity to Sweden, Danish habit of everyone agreeing on one way of doing things and then there is no other way)

Yes, modern furniture is crap and there is an epidemic of junk sold at fancy prices. If you reframe your crappy sofa as purchasing a sofa kit and pay a reasonable not-West-Elm price for it then it doesn’t seem so bad after all.

How I would characterize my ideal economy is one where the feedback loop works: people can make reasonable guesses about what a product is, how long it will work for, and what its cost is. They can adjust their purchases according to their needs, which tells us which products should exist and which should not. Businesses do not trick the customers into thinking a thing has more value than it actually does. A very large part of this economy is accurate information, and a very large part of accurate information is trust. After all nobody is going to know more about the product than the people who made it, and they will always have an interest in representing their product in the most positive light. Lemon problem.

The thing that seems to characterize the economy now is that businesses will violate your trust in order to make money. They know that you won't read the license agreement when you sign up for a service, and they will use that. They know that you won't be checking what kind of joins your sofa has. They know that you won't get as much value from their items as the adverts say. All of these abuses can be done within the law, perhaps because these same businesses are involved with shaping the law.

The feedback loop is broken, and this leads to the same problem as what the Soviet Union had. Their problem wasn't that people were lazy and didn't go to work. Their problem was that they made the wrong stuff. Things that nobody wanted, often with the same quality issues as what you get these days buying an item from a market economy. Note that GDP figures will still not know this, it just sees all the crap and counts the money paid for it.

Often we pick on MBAs when it comes to this sort of critique, and there's some merit to it. If your only goal is to make money, and the economy is riddled with loopholes where you can make money without providing value, then we will have an economy that doesn't provide a lot of value, because MBAs are really good at finding these types of things.