Would Magrathea have to shut down today?
20/11/2011 § Leave a comment
We watched the 2005 film The Hitchhiker’s Guide to the Galaxy over the weekend. IIRC, it had mixed reviews when it was released. It missed out a few classic lines from the book (and radio show and TV show — it’s a sad life, I know). Still, it was very entertaining and the cast was great.
The explanation for the suspension of business in Magrathea caught my attention. Magrathea’s chief industry is custom planet building. When the galactic economy hit a down-turn, they suspended operations. The explanation was that, custom planet building being somewhat of a luxury good, demand had fallen off.
What’s interesting is that Douglas Adams expected his readers to agree that a recession affects the kind of people who can afford custom-made planets. If the galactic downturn had looked more like the current global conditions, would Magrathea have had to suspend operations?
- The Center on Budget and Policy Priorities suggests that the last economic expansion was different from earlier ones. More of the income gains went to the top 1%, relative to gains to the bottom 90%, than in earlier expansions.
- A bit of poking around suggests that demand for luxury goods has, indeed, been buoyant. LVMH, Saks, Burberry have all been doing well in the last year.
This doesn’t tell us whether the top income earners are weathering this global downturn better than prior ones. It says they did better in the good times, and they are still spending. Still, it provides an indication. These days, Adams might write that Magrathea risked staying open.