I think it’s a basic fallacy…

Disclaimer: I am no expert; my views are possibly simplistic.

One of the basic mistakes that I think the capitalist model of business rests on, is the concept of infinite increase.

This is the concept that the customer base, the demand, the need for the product, can be made to increase continuously, and without end.

How can this be? At some point of time, the curve *has* to flatten out, the supply will keep up, if not overtake, the demand. Saturation will happen. And the problem is that the economy, and the companies fuelling it, don’t think of it at all. This causes a lot of problems in the market and the economy…people seem to think of demand as a graph line going straight upwards, when I feel it’s more like a wheel, going up and coming down by turns.

Even where one would think of ever-increasing demand….real estate, for example, or mobile connections…a cyclical slump in the development of the businesses that keep the city’s demand for these fuelled, will have repercussions on the demand.

Land, and housing, is definitely a finite-supply commodity; so logic says that the prices will only go one way…up. But with the downturn in the IT sector, one is seeing a slump in real estate, too. Of course, the slump never seems to bring back prices to the pre-boom rates; a certain amount of escalation is always present..but certainly the high prices have been tamped down sharply. This is reflected in the fact that builders are bringing down their prices, and there seem to be so many housing developments that have been stalled. Rentals, too…”to let” boards springing up everywhere is a sure sign of the shrinking demand. In my own apartment building, where rentals and sales would happen quietly, there are now several flats vacant.

But sometimes, even before saturation in terms of demand occurs, the supply peters out…a classic case in point is the mess that the mobile service providers seem to be in. Their idea is to get as many customers as possible, through aggressive marketing..then, for those hapless customers, the woes start. The network is saturated, calls drop repeatedly; prospective customers are told that their area cannot support any more numbers…a sure recipe for disaster. In the old days, this is exactly the kind of lousy-service scenario that Indian Telephones got away with…because they were a monopoly. Today, customers will migrate to the rival service providers.

To an extent, the mobile phone mess is a reflection of what we see in Bangalore. Too many customers (citizens)…a creaking infrastructure that doesn’t beging to cater to their needs….patchy improvement plans that are short-sighted and do not, ultimately, solve the problem at all…. a situation where no one is happy.

I am beginning to think that what happened to Calcutta in the 70’s may be, after all, the best thing for Bangalore, too. Calcutta collapsed in its own inefficiencies, and business fled the city and the state. Then, the city was able to breathe and take stock, and is slowly building itself up once again.

Perhaps, this kind of collapse in Bangalore will make a kind of self-limiting remedy to the woes we see all around us. No more of our forests and wildernesses will be converted to housing layouts, transportation and roads will improve, not being under tremendous pressure; and who knows, Mr and Mrs Bengaluru Vaasi may have life a little easier…

A couple of years ago, I already found that in Kuala Lumpur, the government was moving its offices to Putra Jaya, forming the nucleus of a new satellite town. I wish, at least, that Bangalore would adop this policy and shift to a satellite town like Kengeri whose potential has never been developed.

Oh well…random thoughts while I cook….!

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