Jun 26 2007

Artisanal economics: alive and well in Bali

One of the joys of summer for teachers is that we get to forget about stacks of student work and read whatever we want. One of the books I read during my Bali trip was one about food called The Omnivore’s Dilemma, by Michael Pollan (the other was the classic and utterly cheesy mystery in which a Harvard professor uses economic theory to solve crimes, Murder at the Margins).

While The Omnivore’s Dilemma warrants several blog posts itself, one section stood out to me as relevant to what I was seeing in Bali firsthand. In discussing the different food chains humans participate in, Pollan discusses a concept called “artisinal economics”, which he describes as a system in which “the competitive strategy is based on selling something special rather than being the least-cost producer of a commodity.” Pollan goes on to point out that “this artisinal model works only so long as it doesn’t attempt to imitate the industrial model in any respect. It must not try to replace
skilled labor with capital; it shouldn’t invest capital to reach national markets but rather should focus on local markets, relying on reputation and word of mouth rather than on advertising…”Wood carving

Touring around Bali, one cannot help but be awed by the seemingly endless selection of arts and crafts available not only to tourists but to Balinese for their houses, businesses and temples. Around the town of Ubud (famous as a center of artisanship),wood and stone carving workshops and painters studios stretch for kilometers in which truly talented artists can be observed creating unique (and some not so unique) pieces of traditional art (and some not so traditional, such as the Thai Buddhist monk paintings I’ve seen on sale in places like Bangkok and Phuket). It would seem that a large percentage of the island’s population is involved in the art business, and although I did see some African patterns such as giraffes and of course the Thai monk paintings, the majority of the art appeared to be in traditional Balinese styles and for the local market.

The market for art and crafts seems to fit Pollan’s description of an “artisanal economy” where quality and individuality are the goal of the economy’s output, as opposed to maximizing output and minimizing costs. To see young men and women working with their own hands and tools that haven’t changed in centuries was refreshing, representing a hope that I and I would guess many of you share regarding the desire to hold on to something from our society’s past even as the modern economy pushes us ever forward into a world of homogenization, increased output, increased mechanization and inevitably less and less beauty and quality defining and differentiating unique cultures from one another.

Discussion Questions:

  1. Why do firms in developed and developing countries tend to replace workers with machines as their economies grow?
  2. If the craftsmanship and artisanship of Bali belongs to an “artisanal economy”, what kind of economy do the factories, superhighways and giant container ships of the rich world belong to?
  3. Do you think the artistic, labor intensive industries that employ so many Balinese will survive in the modern economy, or can artists be replaced by machines as easily as seamstresses and auto workers were in
    the 20th century?
  4. Based on Pollan’s description of “artisinal economics” quoted above, what chances do you think exist that such an economy will reemerge and thrive sometime in the 21st century? What would it take for such an economy to thrive today?

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About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author

10 responses so far

10 Responses to “Artisanal economics: alive and well in Bali”

  1. Marco Garofaloon 12 Jul 2007 at 11:28 pm

    <abbr title="Why do firms in developed and developing countries tend to replace their workers with machines as their economies grow?">

    Although this blog posting describes the ‘artisanal economy’ in Bali, it also points out that the “artisanal model works only so long as it doesn’t attempt to imitate the industrial model in any respect”. In this respect, such an economy is rare. All developed countries already have an industrial economy, and the developing countries are attempting to attain one.

    The purpose of an industrial economy is generally to “maximise output and minimise costs”. Since human labour is the most expensive cost, anything that can be done to eliminate it is considered good because it increases profits. This was fluently illustrated by E.F. Schumacher in his book Small Is Beautiful in which he points out that “In an advanced industrial society, such work [of human hands] has become increasingly rare, and to make a decent living by doing such work has become virtually impossible.” In other words, firms replace workers with machines as their economies grow because humans cannot achieve the output that a machine can.

  2. manonon 22 Jul 2007 at 8:39 pm

    1. Firms in developed countries tend to replace workers with machines as their economics grow due to the fact that machines do not have working hours, do not have workers' rights, etc, and can therefore be used much more effectively than workers, who require vacations, weekends, and a certain amount of respect. Working with machines rather than workers is therefore less costly (which therefore provides the firms with higher profits) and more effective.

    2. If the craftsmanship and artisanship of Bali belong to an "artisanal economy", factories, superhighways, and giant container ships of the rich world belong to the mechanical, robotic economy; an economy in which there is no uniqueness or originality.

    3.In no way can artists be replaced by machines, unless machines somehow become creative and can miraculously manufacture brilliant works of art. However, in the world's growing industry, it isn't a matter of conserving traditions or art, but rather a matter of making profits and remaining competitive in the market. Therefore, artists will not be replaced by machines that make their art, but rather by machines that make machines and computers and highways. Byebye cultures and traditions.

    4. I think that the chances of such an economy to reemerge and thrive sometime in the 21st century are extremely slim. There are, of course, people who will try to start such an economy, but they will immediately be overpowered by the larger, machine-powered industries and will not be able to thrive in the economy. It would take the disappearance of profits and losses for such an industry to thrive today. Maybe a group of millionares who don't need any more money can try to conserve traditions. It's ridiculous, but it's true.

  3. Yun Qi Mokon 24 Jul 2007 at 12:07 pm

    1. Firms in developing or developed nations tend to replace workers with machines because machines are so much cheaper and so much more efficient. Furthermore, each item produced by a machine is exactly the same as the item before it; manufacturers would then not have to deal with faulty goods that result from human mistakes. Machines also require little management, and can be kept running continually for hours on end.

    2. The rich world has a “status quo” economy in which everything that people own is standard and the same as what everyone else owns. With machines creating most of the products, people buy the same exact things off the shelves. Everything is robotic, lacking the luster and originality of the works of artists, because machines are much better at maximizing profits and minimizing costs.

    3. The artistic economy as seen in Bali can survive on a limited scale in the modern economy, but they have to make sure to create goods that cannot be manufactured by a machine. They must expand on the creative aspect and ensure that their goods are unique, therefore having a high demand and higher prices. Seamstresses and autoworkers were easily replaced by machines because they worked like machines, methodically without thought. These artists are human, which cannot be replaced by machines.

    4. Although the artisinal economy may survive, they will certainly never flourish and expand in the 21st century. Modern people are always looking to buy things cheap and then change them often. Pieces created by artists are expensive, so people will buy only one or two pieces to show off. Fast fashion demonstrates this point. There are fewer and fewer designer shops that sell one-of-a kind clothes. Fast fashion chains like Zara and the Topshop sells hundreds of pieces of one design. This keeps the price low, but because of the continual demand, those shops profit greatly. For an artisinal economy to reemerge would take a miracle.

  4. Elaine Lungon 30 Jul 2007 at 5:13 pm

    1. It's simply more cost-effective for firms in developed/developing countries to maintain machines than it is to maintain human workers. The key word here is "human" — machines have no rights, no families to support, and no real needs beyond basic maintenance costs, while on the other hand, human labor is costly and sensitive. Disregard basic human worker needs – respect, healthcare, reasonable lunch hours, etc. – and you might just find yourself with a lawsuit on your hands. Machines can't really serve you papers, and on the whole, work much more consistently and quickly than humans do

    2. Considering the notable dearth in craftsmanship and artisanship in places like the US in comparison to that of Bali, I think it's safe to say, although rather crudely, that the rich world stands in the "Dear-God-it's-the-attack-of-the-clones!" economy. Almost everything we own is mass-produced, identical, rather lacking in quality, and quite soulless; it's what the machines do best, and people aren't really complaining since it brings in the big bucks. It does make things a bit boring, though.

    3. Go to any crafts festival or DIY convention and you'll find something akin to Bali's artisinal economy, albeit on a much smaller scale and nowhere near employing as many as the industries in Bali do. Many of their products hold their value because of their uniqueness, for lack of a better word, and the inability to produce them in mass quantities with machines or modern day equivalents of seamstresses. Artists are around to create art – unique art – that contains a certain human element that machines don't possess and that mass production destroys. Such an artistic industries can exist in a modern economy, but only to a certain extent.

    4. I'm not optimistic about a reemergence of the artisinal economy; the emphasis nowadays is on mass production, money, convenience, and owning the same things that your neighbors do – which means being a slave to the fads that change so quickly in society. People care little for owning expensive, timeless pieces; at most, they'll keep a few around, but for practical purposes, people will buy whatever's cheapest and easiest to find or replace. There isn't much of a demand for anything really special or unique, and really, industries aren't likely to deviate from the formula that's gotten them so rich: creating boatloads of identical wares for a low price and selling them for a similarly low price to the conformist masses that slaver for the affordable and the cheap. The reemergence of an artisinal economy would require us to put profits second to art, and I really cannot see that happening.

  5. Lucas Tophamon 05 Aug 2007 at 5:02 am

    1. Firms replace workers with machines because machines can work constantly, require little maintenance, and most importantly, don't have wages. In short, they're simply more efficient and the rational choice for companies that wish to decrease costs as much as possible.

    2. The economies of today in the developed countries are the efficient economies, where the more you can get done for cheaper the better. This form of economy usually forgets the human element, preferring the most efficient choice over the moral choice.

    3. Only the truly artistic industries in Bali will survive by employing humans because machines can't produce works of art. Everything else that is simply human labour probably will get replaced by machines as soon as a firm in Bali decides to become more profit oriented and then the other firms in Bali will have to switch to machines in order to avoid going out of buisness.

    4. For such an economy to exist nowadays, it would have to produce a good that had a high demand but wasn't able to be produced by a machine. However, this would probably create a huge price which would definitly stop the economy from thriving because it would be restricted to the millionaires. For it to exist and thrive would probably involve everyone changing their minds overnight and deciding that they don't care about money and choose art instead.

  6. Ennoon 08 Aug 2007 at 7:34 pm

    1. Firms in developed and developing countries tend to replace workers with machines as their economies grow because machines usually ensure a much greater productive efficiency than workers do. Machines do not have requirements such as maximum working hours or vacation requests. Therefore, machines have a lower cost and usually have the ability to mass produce. In developing countries such as China, one can see that the lower-class labor force is still the major resource of the economy. This is because in a developing country, the cost of labor is still relatively low. This is especially true in China, since China has a huge population as well. In the future, as China is moving towards becoming a developed country, the lower-class labor force will decrease and become replaced by machines because the wages and treatment for workers will ameliorate and exceed the cost of using machines by an increasing amount. In addition, as technology becomes better, the building of machines will be a decreasing cost industry because machines will become cheaper as technology advances. All of these reasons make machines more productively efficient than labor.

    2. They belong to a mass produce, industrialized economy where quality and aestheticism becomes lost. The goal of an industrialized economy is to minimize costs and maximize economic profit. Thus, as long as the good brings profit, it’s good.

    3. Art and craftsmanship can definitely not be put in the same category as auto workers for a number of reasons. Art is only valuable when it’s unique, when it is prudently constructed by the hands of an artist, whereas automobiles serve a specific purpose- transportation, and this purpose is very different from aestheticism, thus, Balinese art is completely different from automobile factories. This is also the reason why I think Balinese art can survive in today’s modern economy just like the art of Picasso has survived in today’s modern economy because I’m sure humans will always have a sensible side which desires beauty.

    4. I think such an economy can coexist with the modern economy in the 21st century because they are both needed. For example, if I wanted a shirt to wear just because I was cold, I would definitely ignore the design of the shirt. In this case, I would buy a t-shirt that has been mass produced by machines. However, if I wanted a shirt to wear on my wedding day, I would want a quality, Taylor hand made shirt. In the second case, price would not matter to me anymore. Thus, I think that as the modern economy in advanced countries becomes even more advanced, people will desire Artisanal Economy even more because they are not only concerned with their car being able to drop them off some place, they are also concerned with the design and craftsmanship of the car.

  7. Carloson 10 Aug 2007 at 1:52 pm

    1. Firms replace workers with machines because machines work more efficiently than workers. As technology improve, the costs of machines goes down and their efficiency increases. However, the costs of hiring workers constantly increase, as a society develops and the people demand higher living standards. Using machines therefore brings more profit to the firm.

    2. These belong to the "developed" economy, which is more efficient, but less uniqueness is in each individual product.

    3. It depends on what strategy the workers in bali take. If they try to keep doing what machines can do more efficient than them, they would not survive. If they acquire and use skills that machines can never replace them in, such as creativity in creating art, they would survive.

    4. I think if this economy is not preserved now, it would not reemerge easily in the future, since the skills that needs to be passed on for this economy to sustain would be lost.

  8. Cassy Changon 10 Aug 2007 at 10:53 pm

    -companies replace workers with machines because machines cost less in the long run, but of courses there are really poor places where machines cost more than employing workers…so it all depends which one will save the companies more money.

    -highways and factories belong to a "mechanical economy"

    -yes artisinal economy can survive in the modern world because handmade items are considered exotic and unique—that's a selling point!

    -Pollan did point out restrictions to the model. like it should focus on local consumers rather than national or international, and that artisinal economy should relie on reputation rather than on ads. So yes I think it can thrive locally. For example there's a restaurant in taiwan that sells beef cooked in a kind of herb, it's not that the herb is rare, but it's the original idea to combine the two foods that make it special. The restaurant started out with one branch and then in the past decade opened three branches. But of course this type of economy cannot compete with international companies like macdonalds.

  9. kajon 14 Aug 2007 at 3:52 pm

    1. In developed countries workers are often replaced with factory machines. The machines are cheaper, more efficient, can do much more dangerous work, and are overall more efficient. Workers need insurance and other benefits which humans require but machines do not. This makes the machines cheaper, therefore it decreases the cost of production and so firms earn more profits.

    2. If the craftsmanship and artisanship of Bali belong to an “artisanal economy”, then factories, superhighways, and giant container ships of the rich world belong to the mechanical/ robotic economy; an economy in which things are produced in great quantities off of the assembly line.

    3. Artists can not be replaced by the computers that we now have. Because, so far at least, we have not created any computers that can be creative and original, only ones that can follow orders given by humans, therefore the human element would still be needed in order for art to be created. But art might become less common because the most important thing in the modern economy is making profits. Therefore if the artist are replaced by machines, these machines will either be very different from the modern day computers or they will have another purpose which can make more profit.

    4. The chances of such an economy re-emerging and actually thrive are next to none. Profits and losses control today’s market and economies of scale create much lower production costs and higher profits, therefore an artist can never keep up with the low prices of machine produced products. Art in western countries is mostly limited to rich people already, and as the world grows richer this will continue, therefore once economies such as the economy in Bali reach the level of a robotic economy art will only be limited to the rich because the prices can’t compete with the prices of products produced on a large scale.

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