Saturday, January 8, 2011

Optimizing in a Knowledge Economy

I've returned to Wooster, Ohio for winter quarter of school at OSU-ATI and I am FINALLY taking some business courses that I feel might be practical to my life my principles of economics in food, agriculture and environmental sciences course. The whole point of this course focuses on microeconomics (individual thinking) but we have brushed over topics of macroeconomics (big business or government point of view) as well.

The key point that we have discovered in microeconomics is that every one has one thing in common, we all optimize. Optimizing or optimal decisions are simply "what is best for you"? Well when everyone optimizes at the same time is that good or bad? The truth is it can be both, but whether its good or bad it brings us to the BIG QUESTION in microeconomics, "under what circumstances, does individual optimization lead to outcomes that are good for the whole group"?

Leaving that thought for a moment, we also established that we live in a "knowledge economy". this means that knowledge is scarce, and if someone can eliminate part of that scarcity than they are providing an economic benefit to you and everyone else. now connect these thoughts to my industry (pork production).

Holy cow someone hit the switch in my brain! I now can make a connection from this interesting (although slightly boring) economics class to my life and my industry because if you think about it, knowledge is extremely scarce in livestock production in this country wouldn't you agree?

What economic benefits can I provide to people by spreading the knowledge that NEEDS TO BE SPREAD to those who are "scarce"? Just a few benefits off the top of my head are; people benefit from understanding the truth to the nutrition, they gradually lose the fear that meat is bad for them, they gain time with their families because they're now making sit down meals with wholesome, nutritional, SAFE food, They live healthier lifestyles because they're receiving better nutrients and in turn being healthier and of course, they're spreading the KNOWLEDGE they've gained to all of their friends and families.

Now think back to the optimizing thought. I just used my knowledge of a product, service or industry to ultimately benefit a whole group of people. WOW! Optimizing is supposed to be "what is best for me"? But as a producer it is my duty to take into consideration "what is best for you" because the ratio of producers to consumers in America I'm sure is a very steep number. So by optimizing my time, thoughts, actions and services I can eliminate scarcity (part of all economics) by providing knowledge to consumers so that they can make their own optimizing decisions on "what is best for them".

We've been in class for a week and I am already seeing how this course could start to change, or at least help me acknowledge many new ideas and parts of business life. I'm glad I'm in college because these things are important and when we look at our economy (micro) what are you going to make your decisions based off of?  Which leads into the idea of "sunk costs" which i'm not going ot cover today.

So as producers, let us optimize ourselves so that we can BENEFIT our economy by removing scarcity of knowledge in our industry. I hope that we, as an industry, can work together to change our knowledge economy. After all isn't it part of our moral contract to do well for others and help them better their own lives? I think it is, and I think it is achievable.