Inventing new uses

The economies of scale are a very salient feature of industrialization. In fact, most products start as extremely expensive laboratory prototypes which are not even sold, just passed over among the development team, then get released to the public at a still outrageous price that only true trendsetters and fanboys will be able to afford, before some level of success opens the door the mass production. As the sourcing and fabrication methods improve the costs sink by a combination of buying power and increased productivity, to the point that in many industries the success of one product is leveraged to finance the development cost of the next one, which is usually introduced before the profit margin of the previous one reaches zero.

There are plenty of examples of this trend, particularly when we consider technological developments such as consumer electronic devices. Just a decade ago a rudimentary 32 inch flat screen used to cost about a thousand dollars, while today you can get a 60 inch full-fledged smart TV for that price. The same applies to cell phones, where now you can get a really powerful smart one for half the price of what a dumb one used to cost 25 years ago. And the same applies to electric cars, refrigerators, gymnastic equipment and many more: once they reach the great public their prices start to sink.

Photo: Marco Verch (CC BY 2.0)

However, there are certain categories of products that do not lend themselves to scaling up. One of the most salient are the artisanal handicrafts: while it is always possible to create yet another factory to produce the same type of goods by just buying more machines, products that are manufactured by hand just cannot be primed in that way. In the end, it takes years or decades to train a craftsman and, while it would probably be possible to push them to produce, let's say, twice as many units with the help of their apprentices and an adequate price, it is certainly beyond their capabilities to scale up production by a factor 10 or 100. So as long as these products stay as "hidden gems" out of the sight of the general public, propagating by word of mouth among secretive connoisseurs they can remain affordable, but once they become widely known their scarcity is necessarily going to drive the price up to levels where most of the original consumers would not be able to afford them. The product has become a luxury that only really rich people can buy. This has been the trajectory of some car- and watchmakers who, instead of ramping up the production, have focused on manufacturing a small quantity of really good units and let the market set the price.

The other category that cannot be scaled up are scarce natural resources. And in principle almost every natural resource is scarce since we only have one planet of limited size, but some are just limited (like gold, which is in many places, just difficult to extract) while others are truly rare (like some rare earths, which can only be found in a single mine in Namibia). The same applies to the space on a given beach, which cannot be expanded once it is full, or even the time on the agenda of a celebrity: some of them offer a dinner in their company as a contribution to charity and the entrance ticket is auctioned at exorbitant prices. It is sadly famous that these days the pathways in Mount Everest are crowded all summer long with rich people who have decided to add that notch to their belt.

This same type of competition for irreplaceable goods can be blamed for the effect called gentrification: a neighborhood or a part of town that was not well regarded suddenly becomes fashionable not only within the city but even around the country and everybody wants to have a flat or a house there. As the number of living units is fixed (or can only be ramped up slowly) the eager buyers bid against one another eventually ousting the former local community, most of which just cash in on the bubble and go to live somewhere else with the small fortune that they have made thanks to the newly forged interest in the area where they happened to live.

But probably the most remarkable case of repurposing that I have heard of is the one of the bucatini: this is a type of pasta which is nothing more than a long spaghetto with a hole (buco) along its whole length. Although it has been well known outside Italy for many years its acceptance pales in comparison with the linguine or the spaghetti. However, they suddenly and inexplicably became very hard to find in most grocery stores. It turns out that one major contributing factor was their adoption as "green" alternative to the drinking straws: since they are food, they are naturally bio-degradable, but they are at the same time hard enough to hold the 10 or 15 minutes that one needs to drink a soda, so they are perfect for the purpose. The problem is that the manufacturers were not ready to multiply their production, because while they were a relatively marginal type of pasta for eating, straws are used all the time, even if they are used just one at a time.

In the end, this is just another instance of unexpected consequences: someone has a brilliant idea that catches on and suddenly the whole world is unprepared for the repercussions. Probably nobody will start for want of bucatini, because they can be easily replaced with other makes of pasta that do not suffer the competition of bar owners, but it is still funny how easily things can change. Enjoy your evening.