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February 21, 2009
So Starbucks turns to instant coffee as a way out of its economic woes in a bust global economy.
Martin Rowson
Neo-classical economic orthodoxy assumes rational optimising behaviour by economic agents and is reluctant to contemplate more than minor deviations from that axiomatic presupposition even though we know that the economy is also driven by irrationality and animal spirits. Think Las Vegas (or Crown Casino), housing bubbles, Greenspan's over-exuberance and excesses, the gloom and despondence of an economic depression or all the talk about confidence being the key to getting the economy back on track.
Thsi introduces the possibility that the Rudd Government's stimulus package may not be enough to stabilize the economy, since it fails to take into account the downward spiral of animal spirits that is underway and may continue to worsen. Some background here.
The term "animal spirits," popularized by John Maynard Keynes in his 1936 book The General Theory of Employment, Interest and Money, is related to consumer or business confidence, but it means more than that. It refers also to the sense of trust we have in each other, our sense of fairness in economic dealings, and our sense of the extent of corruption and bad faith. When animal spirits are on ebb, consumers do not want to spend and businesses do not want to make capital expenditures or hire people.
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"So Starbucks turns to instant coffee as a way out of its economic woes"
Excuse me while I do some things other people do in comments all the time:
bwahahahahaha
lol lol lol
You owe me a new keyboard for not issuing an explosive laugh warning.
"the sense of trust we have in each other, our sense of fairness in economic dealings, and our sense of the extent of corruption and bad faith"
Precisely. Where to begin with a global franchise working on the assumption that the cosmopolitan population would be grateful for a culturally specific, poor interpretation of decent coffee, good coffee being symbolic of worldliness?