By Orji Obinna
I would like to call this economics for dummies or for people in the streets. I don’t know what space or time means to you? But for me, within the context of this article, space means location, and time means season. Many like me may have observed what happens to commodities as they move across these two quantities. Yes something happens to them depending on the kind of item in question.
Paul A Samuelson, former economic adviser to Ronald Reagan and winner of the Nobel Prize for economics 1970, wrote extensively about that in his book ‘Economics ‘.But to be honest, this isn’t about what’s being taught in Ivy League schools or principles left exclusively for MBA grads from Harvard Business school, this is something that is so fundamental that practically everyone can understand why it works.
There is a commodity in Aba whose value would be higher in Abuja for example even without any upgrade in quality. What’s the price of yam in Nasarawa? And what’s the price of the same size and quality of yam in Port Harcourt? Of course, the difference in price could be explained by considering say, the cost of transportation, and maybe the relative differential in demand and supply across those spaces. But that aside, it doesn’t account for all the additional value that the item may have in its new location.
This is one of the oldest and arguably the most successful ways of becoming a businessman or entrepreneur.
This same spirit led early Europeans into expeditions to unknown territories. In one scenario, the explorers gave local Indians mirror which considering the location had more value to them, in exchange for gold. In another instance, valuable human resources were traded for dane guns and mirrors. As unethical as it may seem or may actually be, it was a business deal based upon the basic principles of offer and acceptance. This may on the surface look like a variation to comparative advantage but it isn’t. (Yes, I do acknowledge that they could be elements where full values were not realized by natives because of the power of colonialism).
I know a fellow who made a fortune just by transporting a particular type of grass (vegetable) which cattle grazed on in the north down to the south where it was eaten as a local dish. He did this repeatedly on many occasions before the locals discovered what it was used for.
This is simple but it works.
What’s the price of clothing accessories in January, and what’s the price in late March or April or even mid to late December? Irrespective of the commodity in question, the value of all items changes with time. How much was a plot of land in Lekki (in Lagos) 10 years ago? And how much is it now? Inflation? Well, maybe; maybe not. Years ago I met a friend who would buy practically anything you want to sell so long as he got the better you in the deal and then wait patiently for a time when he would sell it for its real value. He always did. This is like the stock market apart from the fact that you can hardly lose. This is how it works. Buy or sell a commodity, wait for the value to increase or decrease, then buy or sell.
Finally, this article has been written purely to reemphasize some basic economic principles that have led many without formal education to economic prosperity even though they did so instinctively. You see them everywhere from Alaba to Aba to Sabon Gari or Onitsha (all in Nigeria). It has also been written for anybody out there who is interested in making a few more bucks just by playing around space and time, even though you aren’t an economic genius or an entrepreneur with a killer idea. You want to make a few more? I mean who doesn’t want to?