(reblogged from my livejournal)
In the summer of 2001, after I was in eighth grade, I went to the National Boy Scout Jamboree. For those of you who don’t know what the Jamboree is, it’s a Boy Scout event that happens every four years or so where around 40,000 promising young men get sent by their parents to the East Coast for three weeks to swelter in the July heat while learning about our nation’s history, seeing our nation’s monuments, drinking our nation’s military Kool-Aid, and becoming evermore sexually frustrated because they’re surrounded almost exclusively with dudes for the better part of a month. The journey culminates in a week in Fort A.P. Hill, Virginia, a makeshift tent city where you do scouty things like earn merit badges, play with guns, look at smuggled porn, and get struck by lightning (that last part is optional – but did actually happen to four people).
One of the most popular activities at the Jamboree was trading council patches. Councils were small organizational units based on geography, and each council designed and wore a unique patch. These patches could be purchased in bulk previous to the trip and then traded with members of other councils, like collectables. My council was the Pacific Skyline Council (Santa Clara and San Mateo Counties) and our patch featured the Napster cat emblem. It was in this context that I learned my first lesson in economics: Bullshit Mind Control.
Perhaps it was because music file-sharing was coincidentally outlawed a week previous to the trip, or maybe because everyone just liked Napster, but our patch was quickly deemed the most valuable patch in the entire country (except for maybe the Star Wars patches; I think they were from Marin… damn them). When we got a sense of how valuable our patch might be to the rest of the country, the scouts of the council got together and determined that everyone was to trade the Napster patches for no less than five of another patch. Preferably ten. In short, because we were collectively driving a hard bargain, the value of the patch rose even more because it was not only deemed cool, but deemed impossible to get. And people want what they can’t have.
After a while, we were selling Napster patches for up to fifteen other patches for our gold-rimmed ones, ten for our silver-rimmed. I don’t know why the gold was more, they were the same damn material. But that’s not the point; the prices we demanded is what made it worth the price. Ultimately, the value was determined by whatever we wanted the value to be. And people bought into it. In short, we were buying the entire patch market.
But then a couple days in, disaster struck. I really wanted the duck patches from Suffolk County Council of New York. I took the shuttle over to their part of Fort A.P. Hill and tracked down an unsuspecting scout. It was here that I learned my second lesson in economics: How to Expose Fraud and Destroy Everyone. I ran up to him and said, “Hey, I’ll give you a Napster patch for one of your duck patches.” “Really?! I’ll give you two duck patches for one of yours!” Then I made the ultimate mistake: “I’ll give you four Napster patches for your set of four duck patches.” The deal was made, and the damage was done. But that wasn’t enough. Fed up with the exploitive prices my colleagues had set, I made at least three more 1:1 deals on my way back to camp, and then traded my cousin for a Boulder patch.
Almost overnight, the value of the Napster patch crashed. Literally horror struck camp as one of my fellow Napsterers tried to make a deal, and the buyer responded, “5 of mine for 1 of yours?! Are you kidding? My friend told me that this guy told him that someone got your patch in a 1:1 trade. No deal!” Coupled with the fact that our patch wasn’t actually as rare as we had claimed (every single person in the council bought at least 15) and we had already sold most of our stock, suddenly we were struggling to get rid of our patches. Eventually we were going for two Napsters for one of anything else, and even that was a difficult exchange. The patch was worthless.
Then came the witch-hunt. This is when I learned my third lesson in economics: Intimidation and Coercion as a Viable Answer in the Preservation of Capitalism. Needless to say, when it came out that I had singlehandedly obliterated the market, I wasn’t very popular.
The moral of the story is this: diamonds suck. While my free-market capitalist friends are technically right when they tell me that diamonds aren’t overpriced (they’re priced just right because that’s the price people will buy them), in a way, they are wrong. Oh so morally wrong.