A local bakery of a village is happily baking 100 breads every night for his 100 customers. The breads cost 1 euro a piece and the daily turnover is 100 euro. All 100 families in the village are loyal customers. It has been like this for many years and everyone is happy.
One day the wheat salesman came by to say that there is a growing shortage. The price of the key resource has to go up. The baker can still get the usual supply but the situation is critical. The salesman said that everything was done to bring the situation back to what it was before. The baker had no choice and raised the price of his bread with 10 cent. The loyal customers understood and paid the difference gladly, knowing that is was only temporary. The turnover of the bakery raised by to 110 euro per day.
The situation did not change. The wheat salesman returned to say that the prices did not only go up further, he would also have to half the supply. The baker was desperate and went to the local politicians. They promised that everything would be better if they were re-elected but meanwhile he would have to cope with the dip. The baker raised his bread price to 2 euro but could not make more than half the usual amount. He decided to sell the bread in halves. The loyal customers were furious but had little choice. They bought the half’s for 1,50 euro. The turnover of the bakery had risen to 150 euro even though he had produced only half his usual amount. The local newspaper was talking about an economy of growth and certain local business people taking good benefit.
The resource problem continued and got worse, despite the promises of the suppliers and the politicians. In the end the half’s would cost 3 euros and the baker even sold bread by the slice. His turnover went further up, his productivity down and his customers became less and less loyal. They could not afford it anymore. Newspapers report that “the market was grimm”.
One day certain wealthy local citizens decided to make the bakery the deal of a lifetime. They were fed up with the half’s and slices of bread. They wanted their entire loaf of bread every day and were willing to pay 10 euros per piece. The bakery accepted, of course. He had been tought about market working in business workshops. His turnover shot up to record sales. The baker even became entrepreneur of the year and was invited to membership of the local Rotary to discuss “common interests” among the “powerful” every week. His status had grown but in his shop many people could not buy slices anymore, not even breadcrumbs. There were people now living in poverty and hunger in the village. And they are angry…….but the economy was growing.
Now you can think of your own happy ending of the story. What will happen?
Moral of the story: When you hear powerful people say that the economy needs to grow and that it is going to solve all the problems, please think twice, unless you are this baker of course and you have not thought yet of a happy ending 😉