anticipation of demand

Paul Cockshott wpc at clyder.gn.apc.org
Tue Nov 1 20:57:13 MST 1994


Steve Keen wrote:
>Total spending: 35.7
>Post-1980 inventions: 2.067
>1970-1980 inventions: 4.232
>1960-1970 inventions: 8.994
>1950-1960 inventions: 14.285
>Pre-1950  inventions: 6.164
>
>In other words, consumers in Japan (which admittedly is at the extreme end
>of the consumption spectrum) spent less than a 5th of their income on
>products which had been invented before 1950. So adding a time and
>innovation perspective to the system makes it even less likely that planners
>could "anticipate" demand.

I would have said that Japan and Japanese consumer goods prove just
the opposite - just how effective good planning can be. Let us consider
some of the major new consumer goods comming out of Japan in the last
couple of decades : the walkman, the video recorder, the CD ( Phillips
also involved here ), the audio mini-disk, high definition TV.

None of these was produced in response to demand, instead large firms
like Sony and Matsushita embark on long term development programs in
which they plan both all the stages of the technology required to put
the product into mass production, and the advertising and distribution
network required to sell the goods once the technology has been developed.
Consumers in the late 70's did not 'demand' to be supplied with CDs,
on the contrary the demand was produced by Sony and Phillips in response
to a technology that they had developed for another purpose - originally
for TV laser disks. They had invested in the wrong technology for that
purpose - video cassettes proved better. They therefore had to create a
new market for their laser disk technology. To launch the CD they had not
only to place long term orders for the mass production of laser diodes
and servo mechanisms, but also to ensure that disk pressing factories
were built, that agreements were reached with record companies to
release the appropriate recordings etc.

The planners at Sony and the other trusts did a good job and planned
not only the production but the demand for the product. But this is
the case with any modern consumer product. Either international trusts
or the state must plan its development and launch.

We may well ask whether this constant planned creation of new demand is
appropriate in the light of environmental limits, but it is to turn
causality on its head if we argue that changes in demand make planning
impossible. On the contrary it is planning that makes changes in demand
possible.

--------------------------------------------------------------------
Paul Cockshott , 		
Phone: 041 637 2927		wpc at clyder.gn.apc.org
				wpc at cs.strath.ac.uk


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