Sunday, July 21, 2013
Law of Diminishing Value
We all know the law of diminishing returns in economics. Simply put it states that adding another factor to a process of production will increase the cost per unit output, or will even reduce output as in the case of using too much fertilizer in farming. Thus the more of the factor used the less the gain per unit of input.
But we are not talking economics here. We are talking about human satisfaction. Why is it that people keep buying more and more things everyday- and in many cases they are the same thing but maybe different in brand - and yet feeling less and less satisfied with what they have? Let's take some examples. A family had just one car before and everyone was happy sharing it to go wherever they want. A member of the family finds it too difficult to share and buys another one when he could afford it. Soon another member will feel dissatisfied with with the kind of sharing that takes place and buys another one.That goes on until there are too many cars in the family and everyone is not very satisfied with his or her car as compared to the one owned by the parents, brother or sister, especially with the parking facility. So, there is less satisfaction all around with the addition of every car.
You don't agree? What about the house you stay in itself. Before you all stay happily in your parents home. Then you and your brothers or sisters split up and buy your own houses. Visits and get togethers were very satisfying at first. Soon they become less and less and the visits, even to the parents' home become lees pleasing, becoming more of a chore each time. Visits between brothers and sisters also become scarcer and scarcer, with reduced satisfaction each time over little things that the separation and the competition in life had brought about. I don't even want to raise problems with in-laws which can make such visits less and less desirable. So the many houses and homes as one factor in human life had brought less and less or reduced satisfaction to the family.
You don't agree with that too? Let's check our own habits. I had only two or three good shirts before and one or two pairs of shoes. I was very happy with them. As my income increases I could afford more shirts and shoes. especially since the fashion people keep offering new and expensive designs to flatter my ego. My wardrobe becomes fuller and I soon don't care much about which shirt or pair of shoes I wore, becoming less satisfied with each after some time and wanting to buy more. Clearly the value I attached to each shirt or pair of shoes had decreased so much than before.
Well, agree or not that's how things are. The more we have the less value we attach to the thing that we used to treasure when there was only one of it. Perhaps that will explain why the kids of today don't value much the things that we most desire and treasure before, and the possession of which made us feel like a million-dollar boy (or girl). Fashion changes and we keep buying and piling up almost everything that we must have in modern life, going for the newest and most expensive brand to outdo each other. In the end we end up with a plethora of unvalued things, cluttering the wardrobes, the cupboard, the bedrooms and in fact the entire house. The only things with real undiminishing values are the memorabilia from old times which really might have no intrinsic monetary worth. The rest will all become junks one day.
Especially to our kids of the next generation.