Thursday, January 15, 2009

Being for Microeconomics

In such a tumultuous time where we have seen such upheaval in the markets, there is this sense that we need to get back to the necessity of putting products back in business and opposed to allowing paper to run the economy. Considering this and the plight of so many large companies, which have affected some small companies, I thought of the necessity of concentration on microeconomics especially in urban areas where the need for change is the greatest. Large companies are good nationally; but smaller ones fuel local communities and assist in the sustaining of national economic structures.

We know that microeconomics work in places where there is some political structure to support it, but not necessarily one that is completely built up. In India, for example, microeconomics has improved the lives of so many families who have begun cell phone businesses. These businesses have made it possible for a great many other businesses to now thrive. In these areas there are less infrastructure and political participation. But necessity has become the mother of invention and towers have been built and businesses formed. Microeconomics, along with continuous operational and strategic improvements, will sustain growth. It has improved the lives of many around the world.

A Newsweek article confirms that such businesses have improved the lives of many in India:

Aruna Gaikwad, 29, is a semiliterate fruit and vegetable vendor in Kokrade village, 270 miles from Mumbai. Her husband used to sell their goods from two stalls on the village pavement, while she tried to make sales in the markets of neighboring villages. It was a life of struggle, providing only about $60 in monthly income for the couple and their two children.

Today, thanks to her phone, Gaikwad no longer has to rely on local traders to give her a decent price on fresh produce, but can deal directly with wholesalers a few towns away. When there's glut of mangoes, for example, she is able to plan her pricing ahead of time. And instead of seeking customers, she now takes orders over the phone, sometimes a day in advance.

Reading such stories and hearing daily the market reports, I wondered about this sense of microeconomics in urban areas where infrastructure is not the issue and neither by and large is politics. There are systems already in place to make better the lives of those within these communities. What one sees, for example, in an area like Detroit, is that many have been reliant on the Big Three for their livelihood for so long, which have brought many middle class, are now facing joblessness.

Within Detroit there are many cell phone businesses (many pre-paid services offered), Coney Islands, and liquor stores, within a few blocks from each other owned and operated mainly by Middle Eastern immigrants who do not live in the community, but make their livelihoods therein and return to the safety of their suburban neighborhoods.

Now, I'm not hating, as these business owners work long hard hours to make their businesses a success, often with tax abatements that could envy any local resident. But what does disturb me to a great degree is the benefit to the community is lessened as there is little concern for the neighborhood or little respect shown to the customers who live the in the community which they make their livelihood possible. Often these stores are filthy and only fatty foods and junk foods. A vegetable is an anomaly.

In considering microeconomics, I have been thinking about the need for people within urban areas that will improve the health of their community and increase small businesses within the communities in which they live. There is most certainly a need to have grocery stores within these communities and they would be competitive with the liquor stores. Perhaps if there were choices within these urban areas, choosing healthier food products will be more likely and even reduce the burden of the government where many are uninsured and have diseases such diabetes and heart ailments associated with poor eating habits, among other things.

Distribution to these stores will also be necessary. Perhaps other businesses can be started which could partner with large food distribution centers and loans given to renovate or build stores in the heart of these communities. Grocery stores are not the only ones that are lacking within these communities; hardware stores, clothing stores, shoe stores, meat markets, dry cleaners, are also needed. On NPR recently I heard a story about a group of young people in Detroit who have turned acres of abandoned land, where dilapidated houses once stood, for farming vegetables. Such businesses could also be centers of distribution and means of sustaining communities.

If microeconomics can help developing countries get on their feet where the political situations and law and order emerging, surely urban areas such as communities in Detroit can benefit from the same where infrastructure and land are available and where a great many citizens do not have transportation to go stores like Wal-Mart that are outside of their communities and where products are by and large less expensive. Many families simply eat what the liquor stores provide which is often fatty foods and junk foods. Microeconomics will not only provide healthier foods for these communities but provide jobs and assist in the rebuilding of community and restoring the necessary pride therein.

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