Love the masters versus McKenzie comparison. It does give a bit of hope. I’d especially love to see it applied to motion picture entertainment, though I’m afraid that would require a benefactor willing to lose money on the deal (think Dante’s benefactors) or, at least, be willing to make a minimal amount for an exceptional film or show.
This was such an insightful essay, and McKinsey vs. Masters is useful shorthand for a pervasive phenomenon.
I almost teared up watching the Liverpool fans. We humans have such a craving for collective experience, and singing together is one of the best and most wholesome ways to experience joy (dancing is another). No wonder Taylor Swift’s tour was so extraordinarily successful—she was meeting a deep psychological need that we very rarely get to experience anymore. The joy on the Liverpool fans’ faces attests to this need too.
somewhat angled perspective compared to this is the atlantic article on pricing from earlier this week (https://www.theatlantic.com/ideas/archive/2024/04/surge-pricing-fees-economy/678078/), but the part that's parallel to this piece, specifically the masters ticket allocation system, is the concept of "fairness". pasted below, but in short, pricing is the effective way of allocating scarce resources, personalized pricing is both "fair" and close to perfect efficiency, dynamic pricing is how we get there, one economist (of two of 46 who disagree) argues against that notion and that time is how we equalize across levels of wealth and this will provide true economic surplus to consumers and not just the rich ones
"In a 2014 survey, prominent economists were asked whether they agreed or disagreed that surge pricing like Uber’s “raises consumer welfare” by boosting supply and allocating rides more efficiently. Out of 46 economists, only two disagreed. (Four were uncertain, and one had no opinion.)
One of those two was Angus Deaton, a Princeton economist who won the Nobel Prize in 2015 for his work on poverty, and who in recent years has publicly questioned the way his discipline looks at the world. Deaton argues that when it comes to pricing, economists are too focused on maximizing efficiency, without taking fairness into account. In a world of scarce resources, perhaps rationing by time is fairer than rationing by price. We all have different amounts of money, after all, whereas time is evenly distributed. Then there’s the way economists decide what’s good. The mainstream economist thinks that the best policy is the one that maximizes total economic surplus, no matter who gets it. If that benefits some people (companies) at the expense of others (consumers), the government can compensate the latter group through transfer payments. 'A lot of free marketers say you can tax the gainers and give it to the losers,' Deaton says. 'But somehow, miraculously, that never seems to happen.'"
Love the masters versus McKenzie comparison. It does give a bit of hope. I’d especially love to see it applied to motion picture entertainment, though I’m afraid that would require a benefactor willing to lose money on the deal (think Dante’s benefactors) or, at least, be willing to make a minimal amount for an exceptional film or show.
This was such an insightful essay, and McKinsey vs. Masters is useful shorthand for a pervasive phenomenon.
I almost teared up watching the Liverpool fans. We humans have such a craving for collective experience, and singing together is one of the best and most wholesome ways to experience joy (dancing is another). No wonder Taylor Swift’s tour was so extraordinarily successful—she was meeting a deep psychological need that we very rarely get to experience anymore. The joy on the Liverpool fans’ faces attests to this need too.
somewhat angled perspective compared to this is the atlantic article on pricing from earlier this week (https://www.theatlantic.com/ideas/archive/2024/04/surge-pricing-fees-economy/678078/), but the part that's parallel to this piece, specifically the masters ticket allocation system, is the concept of "fairness". pasted below, but in short, pricing is the effective way of allocating scarce resources, personalized pricing is both "fair" and close to perfect efficiency, dynamic pricing is how we get there, one economist (of two of 46 who disagree) argues against that notion and that time is how we equalize across levels of wealth and this will provide true economic surplus to consumers and not just the rich ones
"In a 2014 survey, prominent economists were asked whether they agreed or disagreed that surge pricing like Uber’s “raises consumer welfare” by boosting supply and allocating rides more efficiently. Out of 46 economists, only two disagreed. (Four were uncertain, and one had no opinion.)
One of those two was Angus Deaton, a Princeton economist who won the Nobel Prize in 2015 for his work on poverty, and who in recent years has publicly questioned the way his discipline looks at the world. Deaton argues that when it comes to pricing, economists are too focused on maximizing efficiency, without taking fairness into account. In a world of scarce resources, perhaps rationing by time is fairer than rationing by price. We all have different amounts of money, after all, whereas time is evenly distributed. Then there’s the way economists decide what’s good. The mainstream economist thinks that the best policy is the one that maximizes total economic surplus, no matter who gets it. If that benefits some people (companies) at the expense of others (consumers), the government can compensate the latter group through transfer payments. 'A lot of free marketers say you can tax the gainers and give it to the losers,' Deaton says. 'But somehow, miraculously, that never seems to happen.'"
Just brilliant, Daniel - have you shared it on TTT?