Good old rainy London. Gave my new raincoat a thorough testing today. Wandered around Covent Garden and environs sampling pleasures and tastes while dodging the drizzle tainted crowds. Mrs S directed our steps into a couple of expensive venues I would normally never go anywhere near. For example one of the top rated patisseries in London.
Well colour me impressed. The coffee was excellent. Heavy on the Italian influence rather than the bitter American. Quiche that was divine, and as for the Sachertorte, that was light and melted in the mouth rather than leave you feeling like you are chewing stodge, as happens with so many mass produced versions. Exquisite. I’d had an indifferent pint of IPA earlier, so perhaps I was ready for some quality.
We’ve had a deal of discussions with family and friends of late where the discussion has centred around quality stuff and why it’s worth the price. Reason one; longevity. A really good pair of boots will last ten times as long as a much cheaper pair. Why a good quality suit is a good investment (Buy two, with extras if you can – looking smart is never a bad idea) Nice cotton shirts feel better and last longer. M & S basics more comfortable than the cheap stuff from Primark. A little more spent on the basics means you can go cheap on the accessories.
Anyway, I’m standing outside one store on the Kings Road and an expensive car snorted past. Then another and another. People were walking past me in expensive clothes and a thought hit me. Rather a large thought about the economics of everyday life. It made perfect sense and for a few seconds all the dots lined up, I saw the entirety of human economic activity in action and why free markets really do work.
Every single one of us is connected by a massive web of transactions, be those social, emotional or financial. From the single jet of a fountain to the massive money machine that is the City of London, which in turn is connected to all the other major centres all over the world.
Let me enlarge. The single fountain jet provides social value because as humans we like to look at flowing water, it calms and stimulates us, therefore it has worth. However the fountain jet needs water and power to create that worth. These are not free, the power to drive the water has value, as has the water itself, it needs to be sourced, transported through a network of pipes with a lot of other water. The pipes through which the water flows need to be manufactured, channels dug through the ground for them, the complex net of pumps and storage to maintain an even pressure. All of these need human effort and intervention.
Then there’s the electricity that powers these networks created by investment in power plants made out of millions of complex components from heat exchangers and steam handling technology to the massive transformers and circuit breakers which manage the power output (For the sake of brevity I’m excluding ‘renewables’ here, just talking about base load generation). All of which has to be funded and made by finance. Money must be made, credit obtained to pay for the intricate web of costs that underlie even the simplest nut and bolt. Part of what I do as an investor is loan money to larger companies so that they may pay for new machinery to build and maintain those power plants and networks of water pipes. Which kind of brings me round in a circle to the pleasing spectacle of the fountain jet.
Therefore I posit that anything in motion consumes and creates energy and energy is a function of life. Likewise the market of life is in constant motion. Each of us, is whether we like it or not, is interconnected through diverse voluntary transactions to everything else in this world. Thousands of times a day. Every time we step out of the door. Every leaf swept, every drop of rain cleared, everything man made has multiple costs from the parts of a leaf blower and the parts needed to make the machines which make parts for leaf blowers. The credit and finance to pay that cost has to be raised by financial institutions which are the money machine we are all part of, from the beggar hunkered down outside the supermarket to the flash git in his Maserati posing down the street. Sometimes the chains are not obvious, but they are there nonetheless.
Isn’t this a fascinating world we live in?
Update: Tearful phone conversation with Eldest who dwells in the fabled land of Oz. Long term boyfriend just walked out on her, the idiot. That is all.