I remember hearing about the “Guns versus Butter” model when I first started learning about macroeconomics back in the Cold War era.
It’s a simple enough concept, really. Assume that a country can either spend its resources to make military hardware or consumer goods. Can’t maximize one without minimizing the other because resources and production capability are finite. Back in those days we assumed that the Soviets had a “Guns” economy whereas the US had a “Butter” economy. I suppose it never was that simple but you can learn a lot about macroeconomics from the little 2-D picture of choices between 2 items.
I believe in these rather dire economic times you can scale down to the household level and the model still applies. There are lots of cash-strapped households out there right now deciding whether to buy food or pay the rent. Can’t have it all.
We are most fortunate not to be in that sort of position, and I am grateful every day that we are OK financially. That said, our “Butter” item (a nice cruise vacation) was taken away from us without any warning by the COVID pandemic. Without a corresponding “Gun” item to spend our cash on, we just had lower expenses and a bit higher bank balance. No Jeff Bezos here, but we were keeping the wolf away from the door.
Well, the other day the “Gun” went off. Our 15-year-old dishwasher suddenly failed in the middle of a cycle – no lights, no power, zippo.
I suppose we could have switched off the breaker, closed the shut-off valve and just made do – but that doesn’t make a lot of sense when we are stuck at home and doing all the food prep here. So today we headed off to a little local appliance store and (wait for it) butcher shop in Pakenham. They had just what we needed. It’s a Frigidaire – for those of you who care about branding.
They’ll deliver next week and we should be good to go for a few more years. We even got a couple of T-bone steaks thrown into the deal.
The lady at the store was friendly and helpful, and it was quite a satisfactory experience. We had to wear those dam’ cloth masks but at least there was no lineup outside the shop.
Given the choice, I’d rather be out on the Atlantic, but at least we are able to fill up the dishwasher again.