Supply and Demand vs. Social Utility

Truth is, if only the law of supply and demand determines the value of things in our societies, this leads to serious distortions of value. In this case, money essentially takes over from communities of people, and individual gain becomes more important than the well-being of communities. In the economy, this manifests itself in the fact that money is mostly channeled not into activities or organizations that would be of greatest benefit to the communities or society as a whole, but into those that benefit only a narrow group of interests, which are not necessarily as valuable to the greater society.

For this reason, the concept of social utility in the economy should be considered at least as important as the law of supply and demand, which is almost deified by economics. But how do you capture this expression in practice, which at first sight seems much less tangible? Well, the most important rule of thumb is probably that the more useful something is to society, the more people it benefits over the longer period of time.

In this respect, the case of luxury yachts, for example, seems pretty clear-cut, as only a very small section of society can afford to enjoy them, while there are also far less people with interest in their production than there is money in the business. And if we look at hospitals or schools, there is no doubt that they are of enormous social benefit to almost all of us, both now and in the future. But while plastic cups or nylon bags, on the other hand, are used by many people around the world for their cheapness and practicality, they contribute to serious environmental pollution, which in the long run may cause as much harm to humanity as a whole as they currently do good.

It is true that the production of these products provides jobs and livelihoods for countless people, yet I believe that we should still consider the overall utility for society as the decisive factor. In this respect, there is no point in spending huge sums of money on the manufacture and sale of tobacco products or sugary drinks if they are harmful to the health of masses of people, and their consumption cannot even be considered a basic or irreplaceable necessity. However, since the consumer society is as much about creating and sustaining dependency (or even addiction) in consumers as it is about pushing sales to increase revenues and keep the economy spinning and expanding, in context this cycle can hardly be seen as positive for society as a whole or for its future.

Nevertheless, the same consumption- and money-driven cycle can be observed not only for specific products, but also for certain services – just think of gambling. Casinos, lotteries, sports betting and the like are big business all over the world, but often with very negative consequences for players as consumers. On the one hand, because they could do many other, much more meaningful and useful things with their time and money (even if only in terms of recreation or escapism). And, on the other, it is not only many gamblers who suffer from gambling addiction, but often their families as well, which can lead to conflict, constant stress, unhappiness, impoverishment, and, in the worst cases, tragedy. While it is a positive that gambling generates revenue and jobs, but in a healthy and sustainable society, this should probably not be the most important aspect.

At the same time, we must see that it is mostly about what the political principle of ‘bread and circuses’ dictates, i.e. the seizure and gain of approval of the masses of people, while providing them with a minimum standard of living at which they do not begin to seriously consider the need for change. To do so is to raise the prospect of a big payoff is nothing more than window-dressing: while some may indeed get rich, for the majority it is not a real or realistic opportunity for social ascent at all. In other words, gambling is much more about the benefits of certain economic and political actors than about society in general. (As such, it is also a beloved tool of a social order based on existential opportunism.)

The same could likely be said of many other sectors, be it entertainment or even arms manufacturing and trade. This is true even if, in the case of the latter, many argue that weapons are necessary to ensure people’s right to self-defense, just as weapons of mass destruction are often invoked as a deterrent to actual conflict. But with an opposing nuclear arsenal, all it takes is one wrong decision or fatal turn to set off a chain reaction, while statistics show a very clear link between killings and the number of weapons available to the population. The long-term usefulness of these sectors is therefore highly questionable, even if they do provide jobs for a lot of people.

Even if we don’t eliminate all such activities and jobs, we should strive to gradually redirect labor and training to other areas that are more useful to society as a whole, and that truly benefit communities of people. Such sectors and activities include the provision of housing and public safety, health, education, mass media and various cultural activities, advice on lifestyle, finance and the like, scientific research, the development of environmentally friendly and efficiency-enhancing technologies, the development of circular economy, etc. In essence, people should be encouraged to do as many activities as possible that benefit society as a whole, and their rewards should be provided accordingly. On the other hand, everyone must be guaranteed the satisfaction of their basic needs – without this, we can never claim to be living in a truly civilized society.

I do believe that the above examples perfectly illustrate that economic and social value can be radically different in many cases. The most important thing about social utility, however, is not to define exactly what it means – which is almost certainly impossible -, but to strive for it and to constantly check that it is always achieved. And the presence or absence of the necessary attitude is only a matter of socialization and cultureā€¦

Our ultimate goal could be that after a certain (preferably as little as possible) period of time, the general attitude shifts from approving or even deifying unlimited accumulation and private property to a value system that sees public service and social utility – which we might even call social profit – as a real value. By reforming the current culture of consumerism and hedonism that is focused on pleasure-seeking and individual success, we might even get at least some of those with disproportionate wealth to give up their excess possessions of their own accord. (Not just small crumbs of it, as in the case of the much-publicized aid and charity, which is part image-building and part conscience-soothing.) Especially if it becomes the example to follow in the renewed culture, while the exaggerated possession of material goods and money will be considered embarrassing, instead of being seen as a wishful dream or status symbol.

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