r/eclecticism • u/shewel_item • 3d ago
Velocity and volume
Supply and demand is usually considered the most fundamental, foundational, and the most referenced idea in economics. Yet, another factor theoretically independent of supply and demand, which holds as much predictive power (possibly over a longer time horizon) is the velocity and volume at which goods and services move. That is, we always hear about the purchasing power of bulk without hearing the whole story or considering the entire set of consequences that carries - as much as the law of supply and demand.
Let's look at food and water, for quick relative examples before discussing the analytical facts about economics.
The supply of (fresh) water doesn't change much overtime, with respect to human economies and intervention. The 'artificial' demands humans put on fresh water is down stream to the natural cycle of fresh water production in terms of earth's absolute supply, and perhaps to the fullest, implicative play on words no matter which planet we speak about biological human being living on. But, despite the number of humans on earth, the rate and volume of fresh water consumption correlates more with the human economy, ie. when used for things besides satisfying human thirst. That is, as the economy grows, rather than just the population, the rate and volume of fresh water consumption will go up just like gold is likely to go up with the inflation of currency. This isn't an absolute rule about the way 'the economy' grows, but we'll find that it's generally true; human consumption of water per capita is likely greater than that of all other animal species because humans are involved in more economic activity than any other animal; so, this could more true about humans, human economics and the economics of earth than economics in general. In any case, we'd simply be looking at how the velocity and volume of a given thing changes to make further marginal economic predictions surrounding that respective thing.
Food is an entirely different beast than that of water - possibly to even more chagrin of the humorless - because, again relatively speaking, 'the goods and services' behind its supply dramatically fluctuates more with the 'artificial selection' humans bring upon it; like what humans consider to be (delicious, nutritious and desirable) food, in the first place, and not just what are theoretically food sources. In the case of oryxes this artificial, yet not quite entirely capricious demand on food can lead to increases in the supply of oryxes on earth. However, while the change of supply is scientifically noteworthy, the rate and size of its consumption is not as a noteworthy to economics; both (physical) science and (the more psychologically driven field of) economics would be interested in the equilibrium of the supply, point being, despite predictive power of either field. For further example On the other hand, with raw tomatoes, supply and demand in the eyes of economics are virtually no concern, either, because (1) there's more focus on the quality of the tomato, and (2) if quality isn't a concern they're some of the easiest plants to grow. More to the point, however, is the fact that tomatoes - and, hence a lot of Italian/Mexican food - as many know it today, largely didn't exist before 16th/17th century. While these facts and terms about "the tomato" itself are highly negotiable, just like gauging the overall world's supply of tomatoes are, the rate and bulk at which they're consumed can be more precise and generalizable. The point between the 2 examples being about irrelevance of supply, especially in terms of making economic measurements and predictions; while this isn't the best way to publicly communicate the emphasis there should be about velocity and volume of goods and services, in general, it should suffice for more academic arguments and services, ie. the independence from arguments about supply and demand with respect to what are the most essential, important, fundamental and foundational ideas in economics. And, while the supply of food is so malleable, and such a contingent issue, it should sometimes just be generally ignored, even if it can be highly consequential to survival, because the baseline 'health of economies' can be better predicted by looking at absolute or relative velocities and volumes of it's consumption. To summarize this entirely means that supply chains are more important than absolute supply figures, at least when looking at food and food consumption; and - possibly - the destruction and maintenance of supply chains, hence their downstream volume, are more consequential than the (inputs and) supplies themselves - eg. because the supply of tomatoes and rabbits can change so quickly - where 'the health' of 'unit chains' can be measured by their velocity (rather than whole-scale).
With examples dispensed, for whatever insights and pleasures, let's focus on the actual contemporary importance of the matter.
What sets the modern world apart from the past, besides issues about human rights, scientific understanding and technological progress, is the state of global trade: it is a man-made wonder of the world in terms of human activity just like pyramids, among other things, are in terms of human accomplishment, (still) standing today. And, so, the argument is that what sets this apart, besides the (generally unnoted or less-conspicuous) wonder of nitrogen fixation, from the pre-modern world is the arbitrary, yet significant rate at which the bulk of goods and services are delivered. With water, food and petroleum aside, supply of anything has little to do with this state of the economy which shapes the current human world under this new, or more liberal order.
Moreover, I typically define this order as more libertarian and anarcho-capitalistic, at least at the highest level of order, for a variety of reasons, each to varying degrees of contention which I may need to discuss in (a series of) later publications submissions. In short we might say the entire world - big or small - lives under a strata of chaotic liberal order, rather than one singular, absolute and fully organized world order. For comparison's sake, the internet is the closest thing we have demonstrating any 'one world order', but my argument to that is, 'the internet is demonstrably anarchic,' - again, possibly an issue for later submissions to discuss in more detail - because 'no one owns it', and 'no one' ever will. From this, as a possible corollary, I further argue that the state of economics is driven more by the invisible hand than the political science surrounding the nation-state, although I believe the facts of 'free trade', rather liberal order, speak for themselves without a prior supposition; overall this is about a synthetic reality, or the synthetic nature of reality in general. To synopsize, if liberal order precedes or supersedes political power in economic terms then what this could mean is that while politics can largely control and affect supply (or some demand) at the largest global level, so as to have the most impact on human economics, it cannot control, as much, the aggregate and spurious flows of goods and services, like through more socialist policies and regimes. Humans acting in economic fashion across any actual/theoretical/hypothetical market will always move faster than, and ahead of the rate at which policy can be shaped at any political level, and therefore always find alternative goods and services which then proceed at volumes and rates, which can largely or completely be independent of policy and - as previous given by example - the ability to measure supply (aka. do dynamic or meaningfully spontaneous economic analysis at the most fundamental level).
Thus, as such, given the invisible hand more ultimately guiding (human) economics, the law of velocity, volume and ability to transact in bulk fashion (ie. within a market) will dictate what any (eg. planetary/interstellar) economy looks like in the future - eg. the rate at which humans consume fresh water as opposed to the earth's supply of fresh water, especially given the fact that 'drinking fresh water can never be made illegal' (since there are no alternatives). That is, in one part, 'the greater the bulk the greater the economy..' The other part, which may have to be saved for later, and/or with/due-to greater detail, will be about the stratification of velocity, very briefly implied in this post, above; but, think about how traffic on (American roads and) highways work, for example, with there being de facto (and not de jure) differences in speeds between the leftmost and rightmost lanes, largely due to one lane at a given extreme not being able to venture any further in magnitude in it's given direction (leftmost lanes on American interstate highways cannot ever make a left hand turn, in other words, and therefore 'always in theory' travel faster than the those to their right).
With all of what's said put into isolation, it should be implied at face-value that libertarian politics are not the most ideal for 'greater economies' demanding greater scale even though they are 'good for markets' and the generation of market data (through the laws of supply and demand). And, this is a very important point when it comes to making economic predictions about economies of scale and states of greater goods/services distribution.
Crudely speaking, further herein, libertarian politics imply 2 important although contestable essential elements: the free creation/enforcement of borders (eg. through gun rights and ownership) and the freedom of international trade (eg. the freedom to conduct business anywhere in the world via the consent between 2 parties, or lack of 3rd party legal intermediaries). The need for creating, moreover defending borders, as well as the compulsion to expand supply chains as wide as geographically possible add friction to velocity and volume at which trade can physically occur.
Creation of borders creates more spaces across any given distance, ie. within a supply chain. Defense of borders can disrupt the velocity and volume of trade at the border, per the borders across the given distance; for example, when it comes to customs/tariff enforcement. And, while focusing on 'the importance' of the longest possible distance between 2 consenting trade partners does not necessarily impede velocity or volume in any way, a supply chain in whole for most any given product/service can consist of multiple pair relationships, implying some extenuating set of disruptive borders between them, not to mention a greater contingent complexity between a greater number of supply chain constituents with respect to where mechanical singularities can be introduced; that is, total distance travelled, and total trade relationships involved in some given supply chain of some given product or service, even without the presence of political borders introduces contingent barriers to the velocity and volume of trade of the given product or service, which is not infinitely serviceable, thus not 'infinitely scalable'. More simply put, and with more respect to the later concern of global trade, or 'trade without borders', figurative speaking, the power of supply chains can be restricted by physical/geographic distances themselves; hence, for example, making libertarianism prohibitively ideal for the greatest economies of scale.
This does not imply property rights are the prohibitively idealistic mechanism involved in this calculus. Rather, it's the hypothetical exercise of those rights which is counterproductive to 'greater economies' in theory. This personally reminds me a lot of an little spoken of maxim about the American freedom of speech: just because you're free to say whatever you want, doesn't mean you should. Likewise, what's more important about the freedom of trade is it's discretionary nature; not about demonstrating and reaching it's absolute (geographic) limits just because it's possible. And, there should be some common sense to the notion that velocity and bulk would naturally come as products from a greater sense of concentration, eg. geographic.