“Supply creates its own demand.”

– Jean-Baptiste Say

Supply and demand

In an ideal market economy, the demand for goods and services induces the supply of them. However, in modern economies, this apt process has been reversed and supply now creates demand. In effect, over-consumption is driven by over-production.

Creating demand

Businesses talk about creating demand as if they are doing us a favour; whereas the opposite is more the case. In modern western economies, people generally have more than they need so in order to keep the economic machine expanding producers need to create demand where none exists. As the economist, G.K. Galbraith said, “One cannot defend production as satisfying wants if that production creates the wants.”

Demand creation is achieved through a variety of marketing strategies including product innovation, advertising, promotions, volume discounts, loyalty cards and value-added.


It is a common business strategy to add value to products and charge a higher price. This so-called ‘value-added’ effectively creates more convenience and ease for consumers by reducing the time and effort required to consume. This scenario is rather counter-productive particularly when it is products we don’t need in the first place. It is production primarily for the sake of profit.


We are conned by convenience and diseased by ease. There is no doubt that labour-saving appliances and processed products has reduced drudgery and improved people’s lives in the past 100 years. However, this has come at a price that may not be worth it. For example, ready-made meals and fast food, are often energy-dense but low in nutrition and a diet like this can lead to chronic lifestyle diseases.

In many cases, it would be better for people to take back the value-added and do-it-yourself because time spent doing things for yourself helps balance and slow down busy lives and adds to self-sufficiency.