Thursday, May 27, 2010

A Certain Kind Of Lumpiness

This post is about thoughts just beginning inside my head and elsewhere, most likely, and I'd love you to chime in.

I was thinking about lumpiness last night, not in terms of bodies but in terms of economic systems and markets. In theoretical terms competitive markets are not supposed to have "lumps", such as needing to have lots of resources before one can enter a market as a buyer or a seller. If those lumps exist the market will veer toward monopolistic structures and such. A competitive market requires all participants to swim around smoothly, like little tadpoles or like atoms or something. The lumps throw a hammer into the works: If you need a college degree to work in a certain labor market then people need to have the money and time to get one first, and all who don't have those will be kept out of the market.

That's not quite the technical term, that lumpiness, but it will serve for what I want to talk about which is the way the American markets are becoming lumpier.

Think of cell phones. A great invention, provided that they turn out to be safe to use. But also an invention which has essentially killed public telephones. It was possible to make a phone call in most urban places if you had a few coins. Now you need to have enough money to buy your own phone. Increased lumpiness, fewer public services.

Or think of the postal services: Many believe that the U.S. Post Office and similar institutions will not exist in the future. Mail will not be carried to your door by the government. Instead, you must make your own arrangements for getting the parcels delivered, and the minimum prices on the private carriers look to me to be higher. Greater lumpiness?

But then we have electronic mail, these days! Only you need a computer to access it and though there are places where one can use free computers they are not in your house. You can't just send a letter at the cost of a stamp.

Public transportation hasn't been common in the U.S. for a long time, but its replacement by private cars and cabs creates a similar greater lumpiness. You need more money to get a cab than a bus, and you need quite a lot more to buy a car. Lumpier and lumpier.

Technical change and innovations are often very good things. But there's a pattern towards greater atomization in the services I've mentioned and that pattern, paradoxically, creates more lumpiness, more trouble for the very poor or the temporarily broke, and less general sharing.

I'm not sure where this is going. Just wanted to write it down.