April 23, 2008

oh, crikey, a Sanders rookie? Gimme more...

In Harfords book I learned the story of Bruges, a bustling town that sprang up as a point of commerce for east and west Europe and the little island across the channel during the middle ages. As it was located by a river, trade could take place with swiftness, lending vibrance to its character as an opportunistic hearth for merchants and traders alike. Deeply in love with the river that breathed life into Bruges, we see the dynamics of human exchange from the pinnacle of its success to the silt of its exhaustion. Prior to reading Harford's book i was not familiar with the tale of Bruges, however i was aware of the economic term "bourse" and the far-reaching effect we can see that it has in the global marketplace today. The fine similarities are strikingly eerie in their meaning, as we approach the port of a worlwide economy marked by many nuances of currency exchange, resource control and inflation, and the human endeavor to break old habits and look for new innovative, less dependent & peaceful ways of adapting to changing environments.
I compared and contrasted the modern challenges facing us to those that were presented to our relatives in the mideivel period, i sought to recreate a simple model by which to understand what constitutes a bourse, if not sardonic and myopic, maybe even childish.
If little Sammy is the walking encyclopedic son of a reputable playing card dealer, who has amassed countless priceless editions to his collection, then we could say that the sentimental value of a single playing card could quite well be diminished in Sammy's case, though he fully understands the net worth of each card he gets a hold of, and of course, depending on his interest in sports. Meanwhile, as the chemistry between Sammy and Janji grows by the day in the passing period, Sammy learns that Janji has a beautiful voice and a passion for becoming a singer. Sammy finds out that Janji's parents struggle financially, so he decides to bring in Dan, who loves sports, has a entrepeneurial spirit exactly opposite of Sammy, (literally, Sammy is incapable of being a salesman) and of course is obsessed with the hottest cards in the game.
So, if Sammy contracts Dan to sell expensive playing cards, which were acquired illicitly (Sammy is dedicated to Janji), then an intermediary has been formed that will allow the interests of all parties involved to be met (Janji can take voice lessons, Sammy is closer to true love, and future jock Dan is high as a kite.) This allows Dan access to limited supplies of valuable cards that only he has claim to. Well, as with the story of Bruges, all goods things only last for so long. Though there is limited stock of rare cards in circulation within Dans proximity, he becomes impatient and unknowingly starts to demonstrate game theory. Dan starts to demand more money for each card he sells, more leverage in what cards he can have access to, depending on its value, and of course demands respect for markets that he has staked or "opened," but because he has now learned knowledge of Sammy's motivation for earning revenue he now feels he has more power. He knows that Sammy has an intrinsic motivation to find love and basically no business common sense and he leverages this against him. Sammy fears that his resources will begin to reflect Dan's selfishness and greed, and spoil his attempts for good at winning his love's heart.
Therefore, what can be done in this web of intrinsic interests and motivations? Does Sammy still believe that the only way to show his affection for Janji is to provide her the means to become a singer, using every asset at his disposal to do so? What about Dan, is he setting himself up for dissapointment and loss of access to a major market supplier out of blind self-interest and want of more? Sammy must make a decision to learn the ropes of business negotation in order to keep the river of exchange flowing, albeit at the expense of the sources loss, if he wants to sustain the relationships and protect his status of power over limited resources without showing weakness.
In searching for the meaning of a bourse, it becomes clear that the motivation to secure the highest motivation involved, for those who wield the most influence ( scarcity of resources and ability to do business) will decide the future strength of the fabric that holds together exchange. When attempts are made to jeopardize the interests of the entity who has the most influence or is comparable in competetive advantage, Harfords idea of game theory demonstrates that it can be self-defeating and hugely self-detrimental to act out of self-interest if there is no power to back up a specific action. Dan, in all his glory, could very well lose the largest opportunity to find his gold in his desire to obtain the most. Sammy, on the other hand, is entering a valuable experience of learning, to be more assertive in his business affairs.

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