The Magic Of Efficient Markets
This weekend, I sold my ChromeCast on OLX, to a really nice guy called Jacques. I only got R300 for it (because I am bad at bargaining), but it was quick and pleasant. Afterwards, I realised that there was something bigger happening there. Something as significant as Jacques’ happiness at getting a good deal.
South Africa operated at a trade deficit of R25 billion in January 2015. With 50 million people in SA, that means my personal contribution to the deficit was about R500.
It should not surprise you that one of our biggest trade deficits is with China. The smartphone will benefit Africa in many ways, but getting it here is going to leave us with a hell of a debt to pay off.
Now, there are two ways in which we can fix our trade deficit. We can either export more things or import less. Increasing exports is a complex problem, so I’ll leave that one up to the captains of industry.
If we want to reduce our imports, we either have to reduce demand or make our consumption of imported goods more efficient. Reducing demand ultimately means telling people they can’t have nice things. That tends to end badly.
That leaves us with efficiency as a factor we could actually work on.
I bought the ChromeCast last year. It cost R700, of which R500 ended up contributing to South Africa’s trade deficit with China. When I sold the ChromeCast to Jacques, all the money from that sale stayed inside SA.
Take that, China.
In the past, I have (shamefully) consigned huge amounts of similar, shiny toys to landfill space or simply the back of a drawer. And it seems I’m not alone.
But recently, online classifieds have provided us with a new kind of marketplace. One with both efficiency and reach. The power of the medium is really mind-boggling. Especially if you remember the tedious process of finding cars and rental property in newspaper classifieds.
All this new efficiency means that (perhaps for the first time in history) it’s worthwhile for the average person to trade in low-value items. And the benefit of that trade far outweighs the extra money in your pocket or the reduced clutter in your house. That trade saves natural resources, reduces waste and helps to free us from foreign debt.