Friday, December 8, 2017

The economic utility of dry feet

Patreon has made an announcement about some upcoming changes to their fee structuring, and this has caused quite a stir. To understate it slightly, these changes are somewhat unpopular and inexplicable to creators and patrons alike. I expect there to be continued discussions about these changes in the days to come.

In a strange chain of associations, this made me think about the economics-related term 'helicopter drops'. In short, a helicopter drop consists of giving everyone a one-shot amount of money, in order to stimulate the economy. The main component of an economy is people spending money on things, and they cannot spend money they do not have. Thus, ensuring that everyone has slightly more money than before would subsequently ensure that they spent more, which would have ripple-effects all through society, as the increased economic activity would spur even more economic activity.

Further along the chain of associations, this made me think about the many things we postpone to do due to a lack of funds. Not because it isn't necessary, but because we cannot comfortably afford doing it quite yet. By pushing these things into the future, we ensure that the money we do have can be spent on the things that are acutely necessary, rather than long-term necessary. A slight discomfort in the present is the price to pay for being ready to face the future, when the time comes.

My shoes are an example of this. There are holes in them, and my feet get wet every now and again. They are broken, but it is not critical, and I can squeeze another month of use out of them if I mind my step.

There are any number of similar examples, most of which we have stopped thinking about due to having gotten used to them. I suspect that a modest helicopter drop, in the range of some $5000, would be funneled directly into the equivalent of new shoes. It would not make anyone rich or change the fundamental structure of society, but it would ensure that people had less holes in their shoes. The benefits would be impossible to measure with econometrics, but they would at the same time be immeasurably tangible to those involved.

I do not know if this thought is useful to you, but here it is.

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