The Economics of Dying Pubic Hair

Before we get to the good stuff, let’s review some history of economic thought.

In 1920, the Austrian economist Ludwig von Mises argued that socialist economies would not be able to figure out what to produce, how much of each thing to produce, and the best choice of inputs for the production.  The price system does all that, and central planners could not duplicate the workings of the price system.

Oskar Lange, a Polish economist, replied with an answer that would be natural to any graduate student in economics: price reflect ratios of preferences and productivities.  With all the relevant information and with sufficient computing power, equations could be solved that determine what should be produced.

Fredrich Hayek, another Austrian and eventually a Nobel laureate, then jumped in and pointed out that much of the information needed is down at the level of the worker.  The factory maintenance mechanic knows that this machine needs lots of grease, but that machine needs only a little.  Such job-specific information is too vast to flow up to the central planners.  Hayek also said that in an ever-changing world, the central planners would be working on old consumer preferences and technological possibilities; they could never be up to date.

I roll this into a concept called “The Trial and Error Economy,” which emphasizes that neither central planning nor corporate planning can figure out all the production decisions.  Instead, we make progress by trying one thing after another.  Then we do more of what worked, and less of what didn’t work.

Consider the dying of pubic hair.  Who would have thought that the world’s scarce resources needed to be devoted to this consumer need?  Who knew it was a consumer need?  But apparently there is a demand, and someone stepped up to fill it.  The March 2007 issue of Business 2.0 has an article (not yet online) about Betty Beauty, a company that sells dye especially designed for “the hair down there.”
 
On the company’s web site, founder Nancy Jarecki tells her story of discovering women at a beauty salon taking some dye home in a “doggy bag.”  She realized that there was demand by women who wanted the carpet to match the drapes.  She developed a dye suitable for close proximity to  “this sensitive area.”

Ladies and gentlemen, this is how capitalism works.  No planner, neither in a government bureaucracy nor a corporate hierarchy, could possibly know about every conceivable product or service that consumers might find worthwhile.  We count on some greedy entrepreneur to take a gamble, give it a try, and learn whether there is, indeed, a market for the new product.  That’s the trial and error economy.

Comments

[Bill Holmer]

"women who wanted the carpet to match the drapes?" LOL

[Deidre Livingston]

I have a girlfriend who has been keeping me well informed of the changes I have yet to experience. She is 8 years older than me and will be delighted to know she can do something about "her carpet"
I will rush over there today with the information. She still does not own a PC or a cell phone, for that matter, but the latest in beauty products will move to the top of her list.

[Mary Skyers]

Building a strategic plan or engaging in strategic planning can make a huge difference, particularly when it has a long-term focus and is used as a management tool, rather than simply being an exercise in forms completion. Business managers are constantly faced with strategic choices, such as developing a new competitive approach to an existing market, evaluating a potential merger or acquisition, or divesting core products or businesses. While the circumstances surrounding the choice may be unique to a particular company, these decisions themselves are similar to those that regularly confront top management in every industry. Such choices often require substantial commitment of time and resources and may have broad, long-lasting effects. Strategic plan templates & tools provide a framework for decision making.

[Blonde Pubis]

I love betty beauty. It was innovative and definately fun to try. I love finding unconventional beauty products that make me happy.

[Merle Shamblin]

Hello my name is Merle Dean Shamblin and I would like to be your new friend. I sure could use somebody to chat with. I am a 47 year old long haul truck driver who currently lives in Duncan Oklahoma. Dec 8th 1960 I was born in Fairview Oklahoma. Moved to Caddo and Washita counties where I attended school at Colony Hydro and Weatherford. My parents Malvin and Wanda Shamblin were cotton and peanut farmers. Dad died in 99 from lung cancer. Graduated from SWOSU with a business degree. My two sisters are LaDonna Hubert and Malva Burrahm. Dennis is my brother. I have been a truck driver for 14 years and have driven 2 million paid miles. I have received many safe driving awards over the years. I am single and have never been married. I have a wide range of interests and am pretty much an open book. Currently I drive a 2006 Freightliner for a major carrier. I dont go to Canada very often. I dont have a dedicated route so I run the entire lower 48. I enjoy reading cinema music sports travel etc

[Merle Shamblin]

Hello my name is Merle Dean Shamblin and I would like to be your new friend. I sure could use somebody to chat with. I am a 47 year old long haul truck driver who currently lives in Duncan Oklahoma. Dec 8th 1960 I was born in Fairview Oklahoma. Moved to Caddo and Washita counties where I attended school at Colony Hydro and Weatherford. My parents Malvin and Wanda Shamblin were cotton and peanut farmers. Dad died in 99 from lung cancer. Graduated from SWOSU with a business degree. My two sisters are LaDonna Hubert and Malva Burrahm. Dennis is my brother. I have been a truck driver for 14 years and have driven 2 million paid miles. I have received many safe driving awards over the years. I am single and have never been married. I have a wide range of interests and am pretty much an open book. Currently I drive a 2006 Freightliner for a major carrier. I dont go to Canada very often. I dont have a dedicated route so I run the entire lower 48. I enjoy reading cinema music sports travel etc

[Alena]

I recently came across your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Alena

http://www.sunscreenstips.com

[Merle Dean Shamblin]

please remove my posts from your website.

[Merle Dean Shamblin]

please remove my posts from your website.