New Economy rant

McNally, David J. (LNG-MBC) David.J.McNally at bender.com
Tue Sep 26 11:31:03 PDT 2000


A friend informs me that in the US all vodkas are, by definition and law, the same (or at least indistinguishable by any normal means):

Code of Federal Regulations Title 27, Part 5 - Labeling and Advertising of Distilled Spirits http://www.access.gpo.gov/nara/cfr/waisidx_99/27cfr5_99.html

(1) ``Vodka'' is neutral spirits so distilled, or so treated after distillation with charcoal or other materials, as to be without distinctive character, aroma, taste, or color. http://frwebgate.access.gpo.gov/cgi-bin/get-cfr.cgi?TITLE=27&PART=5&SECTION= 22&Y EAR=1999&TYPE=TEXT

If this is indeed the case, I don't understand what the motivation would be to buy expensive vodka - in a mixed drink, no-one will be able to tell what kind of vodka you're drinking.

I suspect that branding is by now so effective, that even if we know intellectually that an expensive vodka is the same as a cheap one, the expensive one will still taste better.

(Needless to say, I do think that certain expensive polish vodkas are better than everything else).

David.


> -----Original Message-----
> From: sawicky at epinet.org [mailto:sawicky at epinet.org]
> Sent: Tuesday, September 26, 2000 1:51 PM
> To: lbo-talk at lists.panix.com
> Subject: RE: New Economy rant
>
>
> which is why i didn't like max's analogy. he maintained that
> he didn't see
> the point in purchasing such stereos. but it can be argued
> that they are
> indeed better quality and worth the money and that the
> producer is making a
> reasonable profit. this is not the case with nike. it is
> true that, as
> far as i'm concerned, nike and reebok and others make a
> better shoe than
> the 10$ special at walmart. but they do not make it so much
> better that it
> is really worth $150-$200 and the numbers on production costs
> don't support
> the huge mark up either. so, marx's stereo analogy seemed awkward.
> kelley
>
>
> At the end of the day, value under consumer choice hinges
> on how people think about a commodity, not about what it
> cost to produce, nor about what you or I think it's value
> is. There are costs, of course, to building brand-name
> recognition, so the mark-up is not really the issue. It
> only seems to be when something is created with high
> fixed cost and minimal marginal cost.
>
> Ironically, brand as value is a more social type of consumption
> than, say, $2K stereo systems in custom designed music rooms.
> You don't buy something with a swoosh to wear in your living
> room; you buy it for purposes of display. Of course, the implied
> social interaction is a warped aspect of capitalist culture.
>
> mbs
>



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