Economic Multipliers (103)

Do you know what these are?

They help CREATE wealth in systems.

Too much of almost anything (abundance) can be a negative economic multiplier.


When people think about negative economic multipliers, they usually think about things that cause damage and diminish resources: texting while driving, pollution, crime, etc.

Most people would not consider ‘abundance’ to be a negative economic multiplier. But it can be.

Think for just a moment about how ‘abundance’ can diminish the ability to create, and more specifically, retain wealth:

  • It is possible to have too many things: If you can’t use what you own and/or do not have the interest, time or resources to maintain things, they lay idle (not creating value for anyone) or lose their value because they were not maintained.

  • It is possible to have too much clean water, too much natural gas or too much of a natural resource of anything: Too much of any natural resource usually leads to waste because there is no incentive to use sparingly OR to protect what is there.

  • It is possible to have too many choices: Too many choices can literally lead to paralysis if you can’t ultimately make a decision. (Think about ALL the choices you make on a daily basis … for EVERYTHING you do, acquire, eat, read, etc.).

  • It is possible to have too much food: Too much food (without the ability to store it and/or deliver it elsewhere for use) leads to waste. And, the waste is not just tied to the food: The labor and resources that go into producing ANYTHING that ultimately goes to waste is also lost. (See P.S.)

  • It is possible to have too much time: People who have no ‘work’ or ‘projects’ or ‘activities’ have more time to ‘get into trouble.’ Of course, ‘work’ and ‘projects’ and ‘activities’ should support things that are beneficial both to the community and to all the individuals in the community instead of ‘being trouble.’ (See P.S.P.S.)

If you recognize that any form of ‘abundance’ comes with its own set of problems, it is much easier to create positive economic multipliers as you work to minimize negative ones.


P.S. Years ago, I read that when large auto manufacturers were first ‘competing’ against each other and wanted their production numbers to be high, one or more companies would ‘scrap’ new cars if they were manufactured just for the ‘numbers’ and fields of brand new parked cars could be found, rusting away. My first reaction was: You’d think they could have run promotions like ‘win your first car …’ or perhaps have donated cars for ‘not-for-profit work’ but then it would have been obvious that the production numbers were a bit faulty.

P.S.P.S. In Sidney Poitier’s book, The Measure of a Man, he noted that before the world had a lot of fancy crushing equipment, people in his childhood village on an island used to crush stones by hand to create the gravel needed for construction / concrete. They’d leave the gravel in their yards until there was enough to sell and no one (to his recollection) stole from anyone else: You just didn’t steal the value of another’s labor.