If you are new here from Akira’s tweet— Welcome to Woody’s World! It was great that he was able to read and share the post about his musical masterpiece.
If you haven’t already, you can read that post here:
without further ado,
On Supply and Demand
On my way home Saturday, I saw a group of Germans playing beer pong in Herosé Park next to the Rhine River. Seeing the piece of American culture gave me feelings of nostalgia, so I walked up and asked, "Kann ich Vielleicht mitmachen?" (Can I maybe join in?) and played a couple rounds with them. Ironically, they didn't realize I was American until they asked about my job. They were speechless.
An American who speaks German is a rarity. However, as we touched on in our last post, the opposite, a German who speaks English, is commonplace. As such, I am treated much differently by Germans than the average German is by Americans. This got me thinking about good ol' supply and demand from Econ 101
Supply and Demand
Let's use the example of online language teachers to recap this foundational concept.
Online English Teachers
The supply of people willing and able to give English lessons online is high because there are over a billion total speakers of English. However, the demand for English lessons is also extraordinarily high because it is the lingua franca. Therefore, Italki, an online teacher marketplace, recommends professional English teachers charge 15-19 USD per hour for conversational lessons.
Online German Teachers
The supply of online German teachers is considerably lower. This is because there are only about 130 million German speakers in the world. Also, the demand for German lessons is substantially lower than for English. However, the severely restricted supply of German teachers creates a situation where German teachers can charge between 24-28 USD for a conversational lesson, according to Italki.
Online Chinese Lessons
Lastly, the supply of online Chinese teachers is massive. However, the demand is undoubtedly smaller than English and maybe just a bit higher than for German. As such, Italki recommends professional Chinese teachers charge between 16-20 USD—however, in my experience, I have usually paid around 10 dollars per hour.
Summary
These three examples show us the typical effects of supply and demand. It follows that if we want to be rewarded by society, we should be doing something that society wants(high demand) and few people can do well(low supply).
Forging your Own Path
When I learned German, I simultaneously increased the demand and lowered the supply of replacements for me. This effect was greatly compounded by learning Chinese and even further by deeply studying stoicism and persuasion. You can do the exact same thing. If we build our character in a certain way— ideally by following our own interests, the set of replacements for us disappears.
Decreasing Supply Shown Graphically
Set of English speakers:
Set English speakers who speak German:
Set of English speakers speak German and Chinese:
Set of English speakers who speak German, Chinese and have a stoic/persuasion foundation:
“Escape Competition through Authenticity” - Naval
This specific path towards “escaping competition through authenticity” is unique to me and not finished. You can do the same thing by learning new skills or moving to a geographic location where your specific traits are more highly valued.
A Note on Starting Points
We all start with different advantages and disadvantages. For example, I was born a natural extrovert, but you were certainly born a natural something too. Additionally, where we are born and who our parents are also significantly impact our opportunities, but those things are externals, out of our control.
Of course, we should take advantage of the opportunities presented to us, even those outside our control. Still, it is more productive and noble to focus on building out the parts of our character that we can control, rather than focusing on that beyond our control, such as our nationality, parents, height, etc. Undoubtedly I benefit from being an American in Germany, but I benefit much more from having learned German.
Where to start?
First say to yourself what you would be; and then do what you have to do. - Epictetus
“What are my inclinations?”
“What was I interested in as a child?”
“What can I work on where the time slips away and I enjoy myself?”
You are likely to find your greatest competitive edge by following your own inclinations. It is in those areas that you will have the most effort and enthusiasm.