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Marketing Boards

Our marketing boards have been in the news recently.  Manitoba has just opted out of the Freshwater Fish Marketing corporation.  Not too long ago, we disbanded the Canadian Wheat Board.  Trade deals, one with the EU and the other with a group of Pacific nations, have threatened our system of marketing boards.

When I went to high school, we learned basic economics, and in particular about the concept of perfect competition.  This took place in a market of many small producers, where the products were identical.  Consumers were free to choose the product that sold for the lowest price.  The result of this intense competition was to drive down prices to the point where producers were making no profit, but just breaking even on their enterprise.  All of the agricultural products fell into this category, as did fisheries products.  Government grading ensured the products were identical.

A free market doesn’t work very well in a situation of perfect competition.  The consumer is pleased because of the low prices, meaning cheap food for them.  Producers, on the other hand, are desperate because they can’t make a living selling their products.  Something has to be done to protect the producers.  Governments have tried to solve this problem in many ways.

The Canadian solution has been supply-side management.  The principle is to restrict the supply of a product so that prices will rise to the point where producers can make a profit.  Governments do this by assigning production quotas to each producer, typically a farmer or a fisher, and by tight control of the market.  They have to prevent imports of those products from outside of their region, to maintain this control.

Producers are generally happy under supply-side management, although they often want to produce more than their quota allows.  The quota itself acquires a monetary value: it can be bought or sold, or inherited from parents.  Consumers are less happy, because they are paying higher prices.  Producers outside of the region, as well as potential producers without quota, don’t like the system at all.  The marketing board must set prices, and adjust quotas to maintain these prices.  This is a form of central control, something that’s detested by people who advocate free trade.

The European solution has been to subsidize the producer.  This seems to be the American solution as well.  Under this system, the producers are generally satisfied.  However, they tend to over-produce, driving down prices.  Consumers are satisfied too, because of the cheap food.  Governments are the losers here: they have to keep paying the producers.  Taxes will be higher, taxes paid mostly by the consumers.  Maybe if the prices were higher, the subsidy would not be required.  The question is: how can this be accomplished?

When prices are too low because too much of a product is on the market, one solution is for government to buy up the surplus product.  European governments have tried this strategy in the past.  Some of them accumulated a mountain of butter.  The problem they faced was what to do with the surplus, something that would not drive down the price again.  They couldn’t just destroy it.  Destruction of food just isn’t done these days.  They couldn’t sell it on the international market.  They’d be accused of dumping if they did that.  About all they could do was to give it away, either to other countries as foreign aid, or to poor people within their country.  The big problem was that governments had to keep buying and storing the product.  Doing this was expensive, and could not be justified year after year.

Of course, many things have changed since these strategies were first introduced.  For one, products are no longer identical.  Certification, usually by private organizations, has changed the market by inventing new categories.  Some grain is now organic.  Some eggs are now free-range.  Distributers are using branding and marketing to differentiate their products from other similar products.

So, what’s the solution to the problem of perfect competition?  Supply-side management does work, but it has problems too.  One is that it can’t coexist with other solutions that demand open markets.  Subsidies also work, but also have problems.  Subsidies compromise the idea of a free market, for example.  Buying up the surplus seems not to work, at least in the long run.  Distributors that have a monopoly, like the Fish Marketing corporation or the Wheat Board, and that don’t have full control of the market seem to be of no economic benefit.  They should be replaced by a group of distributors that compete with each other.  To some extent, the problem is solving itself.  To some extent, it requires judicious government intervention, of a type that’s acceptable to other governments.

 

Sports Drinks

I got started on this topic because of an article in the Washington Post.  It was reprinted in the National Post, where I read it.  I must say that I agree with much of what the author had to say in the article.  Certainly, elite athletes, the ones who do hard physical work and sweat profusely, are a very small market.  Certainly, the companies are selling their product into a wider market.  Certainly, they add sugar, flavour, and colour to appeal to this market.  In particular, they bring the sweetness of their sports drinks up to the optimum level to make them most appealing to their customers.  People who are not elite athletes could get what they need by drinking plain water, instead of the sports drinks.

I do have doubts about some parts of the article.  As far as I know, the idea that artificial sweeteners are harmful to your health is only a suggestion right now, with no scientific evidence to back it up.  Similarly, the idea that natural products are healthy and artificial products are unhealthy may turn out to be a false idea, even though many people seem to believe it.  Of course, natural is now a marketing term too.

The factual information contained in this article makes me wonder how companies can make money selling sports drinks.  I suppose, in the wider market, they are just another beverage, like carbonated drinks, like fruit juice.  Companies must use marketing to create demand for their products, although they must also be sensitive to what their customers really want.  They have to compete with other companies who are selling similar products.  In this sort of market, it’s the product that’s most appealing to customers that wins the most market share.

That necessity explains why all of these beverages contain large amounts of sugar, or the equivalent in artificial sweetener.  One company is not going to reduce the sweetness of their products because they will lose their popularity with their customers.  No doubt we all know that sugar is the new culprit in obesity.  In this respect, beverage companies are similar to tobacco companies, although the effects of sugar consumption are not as bad as those of tobacco consumption.  Maybe it will take government regulation to make sports drinks less sweet.

Still, how can the companies make a profit without taking a toll on our health.  Their traditional way was through advertizing and high sweetness levels.  They claim that they can’t make a profit selling water.  There’s nothing in water but water.  All water is essentially the same.  Water is what we need, but there’s no profit in it.  I don’t see a future for the beverage companies, at least in North America.

 

75th Anniversary

Last weekend, my parents celebrated their 75th wedding anniversary.  They were married in July of 1941.  Now they are in their late 90’s and still going strong.  75 years married is quite an event.  They had an interview with a reporter from the local paper.  Their picture, along with an article about them, appeared on the front page of that paper.  I didn’t expect that.

They had a flood of certificates and letters from heads of state and politicions.  One even came from the queen.  I was impressed by that.  As well, they were from the prime minister, the governer general, the premier, the lieutenant governer, the MP, and the MLA.  My cousin arranged for this flood, and put a notice in the paper about their anniversary.

There was also a reception last Saturday at my parent’s senior’s home, also organized by my cousin.  I was the photographer.  We offered coffee and tea, and two kinds of cake, along with happy conversation.  The people present were mostly residents of the senior’s home, but there were also former neighbors of my parents, and lots of relatives.

In fact, the entire family was there, something that nobody expected.  I suspect that my parents were overwhelmed with the number of people that showed up to wish them well.  Their three sons were there.  I’m one of them.  Their niece was there, along with her husband.  As well, there was a daughter in law, a grandson and granddaughter, a grandson in law, and a great grandson and great granddaughter.  That’s all of my parent’s family.

Afterwards, my parents were quite tired.  Both of them went to bed early that evening.  They were back to normal the next morning, though.  My mother said they didn’t want to do that again.  Still, 75 years together is a special occasion, one that we all wanted to celebrate.  Their next one won’t have a reception, but it will still be special to their family.

 

Twelve Hours

On Wednesday, we had weather warnings for the western half of the province.  When the storm hit here, though, it brought lots of thunder and lightening, but only a brief period of rain, and another of strong wind.  After that, it calmed down.  It wasn’t even exciting to watch.

At 8:30 that evening, I was sitting in front of my computer when the power went off.  My emergency lighting went on.  My desktop kept on running, thanks to a UPS powering it and my cable modem.  The UPS had enough battery power for about an hour.  My other computers went down, of course.  I expected the power to return in about half an hour, as it has done before.  Instead, it stayed off.  My desktop did a clean shutdown after an hour.  The power stayed off.  This looked serious.  I didn’t dare open the refrigerator door.

What could I do for the rest of the evening, with no electrical power?  There was a bright sunset below the storm clouds.  I did some reading until it got too dark to do that.  Then I went to bed.  The power was still off.  I fully expected to be awakened in the night when the power came back on.  My carbon monoxide detectors would beep.  I’d hear the air conditioner and the dehumidifier start up.  My clock radio would light up.

None of that happened.  When the sun came up, the house was still quiet.  My clock radio was still dark.  The power was still off.  At least, the house had hot and cold running water.  I had a shower.

I always have breakfast at home.  Not Thursday morning, though.  There was no power.  I decided to go to a local restaurant for breakfast.  I’d never done that before.  I had to pull the red handle to get my car out of the garage.  The restaurant was all lit up.  At least they had power.  They also had sleeply waitresses and a breakfast special.  I was there at 7:00.  That took care of breakfast.  I fully expected the power to be on when I returned home.

It was still off.  What can I do now with no power?  The house was really quiet.  I tried my battery radio, but it shut off almost immediately, saying that the battery need charging.  There was plenty of daylight.  I started reading.

I’d only read about a page when the power came back on.  That was about 8:30 that morning.  My CO detectors beeped.  I heard the air conditioner, the dehumidifier, and the refrigerator start up.  Finally it’s returned!  Will it stay on?  Good time for a walk.  It was still pleasant and cool that time of the morning.  When I got back home, the power was still on.  That was pleasant news, anyway.  I booted my desktop, and my other computers.  For the first time, I read about the extent of the storm on the web.  Houses had their roofs ripped off.  A truck was turned on it side.  Thousands of people were without power.  Still, I was worried about the food in my refrigerator.  I checked it after the power had been on for about an hour.  It was still cool, but nowhere as cold as it should have been.

Twelve hours without power is a long time, almost too long for a refrigerator.  My house stayed cool, but only because the power was off at night, when it was cool outside anyway.  A few days later, I had almost forgotten the incident.  Maybe it’ll never happen again.  Maybe it’ll be worse next time.  In any case, I was able to resume my normal life as soon as the power came back on.  I suppose that’s all that matters now.

 

Aphantasia

What is aphantasia?  It’s the opposite of phantasia, the ability to recall or imagine an image.  People with this condition are unable to form images or pictures in their mind.  Which one is normal?  It’s better to ask: what is normal?  People have a range of mental abilities, just like they have a range of physical abilities.  In the case of aphantasia, it’s extent is still unknown.

Aphantasia has been in the news recently, the result of a recent scientific study and a subsequent article that Blake Ross published on the web.  The ability to form mental images is sometimes called the mind’s eye.  The lack of this ability is sometimes described as a form of blindness.

Visualization is usually described as a powerful technique.  Imagine yourself achieving success, they say.  See yourself on top of a mountain with your arms raised above your head.  The technique fails when you are unable to form the image.  Then it’s not powerful at all but just difficult to understand or perform.

According to the descriptions, I must be one of the people who have aphantasia.  I’m certainly unable to recall an image of anyone who I know.  I also find it difficult to describe them when they are not present.  Still, I can recognize them immediately when they do appear.  Recalling their name takes a little longer, but I can generally do that easily as well.  I also don’t have the type of imagination that other people often have.  I do have difficulty imagining something that has never happened or may only happen in the future.  I do find it easy to describe something that actually did happen, even if it didn’t happen to me.

I wonder if I really have two unusual mind conditions.  Is one the cause of the other?  Am I normal?  Probably nobody is normal.  We all have a range of mental abilities.  Perhaps I’m towards one end of the normal range.  Certainly many other people share my inability to form mental images.  Certainly many other people share my type of imagination.

 

Electronic Payments

It’s a curious thing that I’m investigating electronic payments, as I do most of my payments with cash.  I always pay restaurant bills with cash, and pay cash for my groceries.  I do use a credit card for other purchases, though.

I’ve been following the Mintchip project of the Royal Canadian Mint.  It was intended to develop a cash replacement, a way to eliminate coins and small bills.  I was disappointed to hear that they had cancelled the project and sold Mintchip.  By that time, it had become just another payment system.  Of course, payment systems of all sorts are one way to eliminate cash transactions.

In parts of Africa, people use a payment system called M-pesa that uses text messages from ordinary mobile phones to transfer money.  These people generally don’t have bank accounts.  Instead, their telecom company provides accounts, and allows them to transfer funds in and out of these accounts.  An M-pesa trial failed in South Africa, likely because most people there already had bank accounts, and already used credit or debit cards for payment.  Another reason for that failure may have been the requirement for an official bank to be involved, rather than a telecom company.

In North America, everybody seems to carry a mobile phone, and most of them are smart phones!  Well, maybe only 75% of people carry them.  The major vendors of mobile phone operating systems all have their own proprietary payment systems.  There are three right now.  Since they are all different, merchants have to buy wireless payment machines that at least handle the popular ones.

In parts of Asia, people use a more flexible payment system, based on a mobile phone messaging application.  The phone itself displays an image that can be scanned by the clerk at the checkout counter.  This scheme works the same with any mobile smart phone, requiring less investment by the merchant.  It may soon appear in North America.

I notice here that credit and debit cards are still the most popular way to make payments.  Using them certainly does eliminate the need to carry cash.  Cash is quicker, though.  That’s one reason I prefer to pay with cash most of the time.

What do people want in a payment system?  I suppose that convenience is the main thing.  Some people also want to collect points of some sort.  I don’t.  Most people also want a payment system that’s free to use, although they often don’t consider hidden charges.  Certainly, fees the merchant has to pay are of no concern to most customers.

What do merchants want?  I suppose the main thing is to attract customers, and certainly not to drive them away.  They also want low cost, of course.  Merchants have to pay for the point of sale equipment, the back-end computer system, and for payment services.  In the case of credit or debit cards, there’s a whole list of companies that take their cut.  The banks and credit card companies are only part of the list.  Merchants also want security, to avoid the bad publicity that occurs when millions of credit card numbers are disclosed.

There is something new out there in the world of payments, something called a blockchain.  It’s an open distributed electronic ledger.  It’s appeal is that it can replace banks, although anything doing banking business in this country is protected by legislation.  Banks, of course, have their own ledgers where transactions are recorded.  These were once books that were filled in by trusted clerks writing with quill pens.  Now they are computer databases kept behind locked doors.  Used appropriately, a blockchain should be able to provide secure and low-cost electronic payments.  No doubt banks and other large financial institutions will want a piece of this market.

 

 

Our Place in the World

What is our, we humans I mean, what is our attitude to other forms of life?  No doubt most of us see animals and plants either as posessions or pests.  We say “my dog” or “my lawn” or even “those dandelions”.  Some of us see them as decorations or amusements.  We see “cute squirrels” or “pretty flowers”.  A few of us see them as objects of study, like “my first warbler” or “a new tree species”.

What’s the religious attitude?  The Hebrew bible, called the old testament by Christians, is revered by all three Abrahamic religions.  In the first chapter of Genesis, you can read this at the culmination of the first creation myth:

And God said, Let us make man in our image, after our likeness: and let them have dominion over the fish of the sea, and over the fowl of the air, and over the cattle, and over all the earth, and over every creeping thing that creepeth upon the earth.

That’s pretty clear.  This is followed by the Adam and Eve story.  According to Wikipedia, this story is not really another creation myth, but is more like a parable describing what happens when you disobey God.  It also does little to refine our place in the world.

Science, ever since Darwin, tells a different story.  Evolution, with the mechanism that Darwin discovered, has become the basis for all biological science.  Evolution is a random process, with no direction and no goal to it.  All life forms on earth are the result of evolution.  We are not special, but just an animal, like all the other animals.

What are we to believe, religion or science?  Stephen Jay Gould, in his book Dinosaur in a Haystack, is able to identify our beliefs about evolution by the questions that he most often gets.  People do seem to believe that one animal species can transform into another, in the fullness of time.  They seem to believe too that we evolved from monkeys.  However, they also seem to believe that we humans are the pinacle of evolution, and that the direction of evolution is towards us, and that its goal is the creation of humans.  These last are erroneous beliefs, as so stated by Gould.

We seem to mash together religious ideas and scientific ideas, with a large dollop of wishful thinking.  I suppose we do this in order to make sense of conflicting ideas.  I suppose also that it’s too frightening for us to abandon some ideas that we hold dear.  Maybe doing it this way is how we accomodate and grasp new ideas.

 

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