The Parable of the Tuileries – Pt. 1 The Law of Diminishing Marginal Utility

Yesterday in Economics of Entertainment, we were introduced to a concept coined by the (right-winged) French newspaper Le Monde. They released a short animated video clip that aims to support the public funding of Culture through three basic concepts of economics: the law of diminishing marginal utility, the principle of positive externalities, and the multiplier effect. However, one could easily argue that this video was pieced together in a rather simple, if not unintelligent manner that shows elements of syllogism through hasty shortcuts and overly general conclusions.

Have a sit through the video, after which you might find yourself convinced because of how much it ‘makes sense’.

Now, let’s run through the first of the three economic concepts illustrated in the clip. I must warn you though, this is purely an exercise in contradiction,

The first one I’d like to talk about is the Law of Diminishing Marginal Utility. It introduces the concept that as an individual increases consumption of one specific product, while keeping the consumption of other goods at a constant, he will experience a decline in the utility or perceived benefits that he or she can draw from the product.
You might want to think of it as gospel if you’re running an ‘all you can eat’ buffet-type restaurant because indeed, each additional plate of food the customer helps himself to will inevitably provide less satisfaction than the previous one. That is due the finite nature of the space available in a human stomach.

It might be a futile attempt for me to try and put this in perspective, but intellectual masturbation never hurt anyone. Le Monde puts it clearly, this law applies to ALL types of goods but one. And how convenient is it that the exception is Culture? It even goes further than that and assumes that in ALL cases, the more you increase your consumption of cultural goods, the more you’ll retrieve exponential satisfaction from it. As if listening to the same Schubert piece for the 40th time were to be more exalting than the second or third. You’d believe that an outer-body experience would occur on the 41st, but anyway…

The video claims that the more you listen to Schubert, the more satisfaction you’ll get from it, and the more eager you are to listen Beethoven, then Brahms etc…
Wait! Some of you might have realised that they’ve just switched from considering the marginal utility of one specific product (lemonade/one Schubert piece), to a whole category of goods (classical composers).
That’s literally comparing apples and pears, no fruit pun intended, but one’s mind is capable of great leaps when it comes to serving a purpose. So I ask, would the benefits perceived from drinking lemonade not turn an individual on to consuming more freshly squeezed juice in general? whether it be orange, apple etc…

Is there even a point in furthering this conversation? Let’s carry on, just for the heck of it…

I could also easily argue that the more I listen Schubert, the more nauseating it gets because Schubert has no emotional resonance with my childhood, or even brings back traumatic experiences of a totalitarian music teacher. Who knows…? Since we’re mixing up categories, I could even argue that the purchase of a Macbook would create incentive for me to purchase an iPhone and then an iPad etc… And trust me, the satisfaction of going on a shopping spree for that kind of products does not diminish with repetition.
Therefore, one could argue that high-tech ecosystemic goods are impermeable to the law of diminishing marginal utility, contradicting the first premise of the video that Culture is the only good to which the concept doesn’t apply. Unless of course I’ve missed the point that Apple products are encompassed in the realm of Culture. In which case, should they too be publicly funded?

Please let me know if you were able to follow some (if not all) of the arguments highlighted here or if I’m just rambling. Probably the latter…

I’m really curious to see if I’ll gather the motivation to write parts two and three of this series…

Here’s a brilliant Snarky Puppy tune, in the Brazilian style of Forró bound to get you rid of the mid-day Thursday blues:

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