The Speculist: The Coupon Queen, the Safety Net, and the Future of Free

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The Coupon Queen, the Safety Net, and the Future of Free

A couple of weeks ago I went grocery shopping at a small international market in an area of town that is home to a number of Indian and middle eastern shops. I was accompanied by my Malaysian father-in-law who had come to town to visit the new baby. As we were checking out, he pointed out a sign next to the register:

THIS LANE ACCEPTS FOOD STAMPS

He asked me what that meant.

Great question. Food stamps, I explained, are coupons, redeemable for food, issued by the government to people with a low income (or no income.) I went on to tell him that they are a key part of the economic "safety net" that the US provides to its citizens and non-citizen residents, with public housing being another part. I added that the current health care debate has to do with whether we will add universal health care insurance coverage to the safety net and, if so, how that will be implemented.

It turns out that my description of the Food Stamps program was wrong on one not terribly important, but still interesting, point. It seems the actual "stamps" or coupons were replaced quite a few years ago with a much handier debit card.

I was reminded of this conversation earlier this week when I came upon the story of the Coupon Queen. The Coupon Queen has an amazing skill:

A Boxford mother has earned the title of "queen of coupons" by learning to feed her family of six for less than $10 a week.

Kathy Spencer told WCVB-TV the trick is buying in bulk when items are on sale and using coupons to bring down the cost.

The station accompanied Spencer on a shopping trip to a Shaws grocery store. Spencer bought $279 in groceries for 39 cents.

Spencer spends about one hour a week collecting online coupons and scanning circulars and then four hours a week in grocery stores.

It's a lot of planning, but Spencer said it certainly pays off.

I have been hearing about the Coupon Queen for years now. She shows up in the media when economic times are tough, and then seems to fade into obscurity during good times. But she's always there. And she isn't any one particular person. There are apparently any number of pretenders to that particular crown. (You can see video of one of the other claimants to the title here.)

Now here's the interesting thing about the Coupon Queen. She and her sisters (as well as any would-be Coupon Kings out there) have implemented their own do-it-yourself food stamp program. Now they would probably argue that what they do is nothing like going on food stamps, but I'm not so sure.

The big differences:

1) There is no government involvement in being a Coupon Queen.

2) Being on Food Stamps is relatively passive compared to living the Coupon lifestyle. Once you're approved for the Food Stamps program, the government starts charging up your card. All you have to do is go spend the money. Whereas it looks like the Coupon Queen has to put in something approaching a 40-hour work week to maximize the benefits of her homemade program.

The big similarities:

1) A family on Food Stamps can get up to 100% of its grocery bill covered by the program. Most probably don't get everything covered, though. Let's just say that for most families on the program, Food Stamps account for about 75% of their grocery bill. In the stories we see, the Coupon Queen generally gets somewhere north of 90% of her family's groceries covered. However, that might not take into account all the extraneous expenses such as buying multiple newspapers, fuel costs, postage used to write manufacturers for additional coupons, etc. So let's say the typical Coupon Queen also gets about 75% of her family's grocery bill covered.

2) Both Food Stamps participants and the Coupon Queen are subsidized by the rest of us. Every time we pay full price (or even a lesser discount) for the products that the Coupon Queen is getting at 90% off, we help fund her lifestyle.

Both the Coupon Queen and her Food Stamps counterparts are enabled by the fact that we live in an age of relative abundance. But there is a major difference between these two manifestations of abundance: one is a carefully implemented and managed government program; the other is spontaneous, wholly unintended phenomenon wherein significant economic power (for a limited a number of individuals) emerges from the froth of retail marketing efforts.

And here's the most interesting difference between the two. My conservative and libertarian friends have major philosophical issues with welfare programs in general and the Food Stamps program in particular, but I doubt many of them would object to what the Coupon Queen does. Nor do I think most of my friends on the left would have a problem with it. Everybody admires the Coupon Queen for her economy and resourcefulness.

Okay, not everybody. In the comments thread of this Boing Boing story about yet another coupon queen, several of the readers take her to task. Even so, at best a typical Food Stamps recipient can expect to be told by the rest of the population that it's "okay" to use food stamps, that "there's nothing wrong," with doing so, that there's "nothing to be ashamed about." Contrast that with the Coupon Queen who is widely celebrated as an economic heroine.

I am convinced that we are rapidly approaching an era in which new technologies will eliminate all forms of material scarcity and want. (More on that here.) It's not clear what stepping stones will get us from today's scarcity-driven economy to one in which unlimited availability of...everything...is the fundamental economic assumption. And while I don't think that the coupon lifestyle (per se) can be scaled to become one of those stepping stones, I think the Coupon Queen is a harbinger of things to come.

The question we need to ask is this: what other models of abundance -- more robust and scalable than clipping coupons and yet just as widely approved of -- might we tease out of today's marketplace as well as the marketplace of the near future? One thing is for sure, as those stepping stones to post-scarcity begin to emerge, we will be dealing with something very different both from Food Stamps and from coupon-clipping. The time to start imagining that reality is now.

Comments

"...what other models of abundance -- more robust and scalable than clipping coupons and yet just as widely approved of -- might we tease out of today's marketplace as well as the marketplace of the near future? One thing is for sure, as those stepping stones to post-scarcity begin to emerge, we will be dealing with something very different both from Food Stamps and from coupon-clipping."

If my belief that mature nanotechnology will inaugurate the first official Abundance Society is correct, there is one ubiquitous American phenomenon that has been going on since Colonial times that may play a crucial role in the rapid widespread distribution and utilization of that technology: the Do It Yourself movement.

Anyone who watches shows on HGTV is familiar with what I'm talking about. People fixing up homes, adding on, redecorating back yards, engaging in crafts, etc.

Now what I have in mind is a widespread practice of the newest replicators being replicated and handed out to friends and family by their more technologically astute relatives.

These gadget, perhaps the size of a Star Trek replicator, would then be jerryrigged by the do it yourselfers as they are soldering them to pipes and then soldering those to vats filled with compost, garbage, effluent, junk. All of the stuff that would normally wind up in America's landfills--but which would, in the nanotechnology society, serve as extremely useful sources of nanotech construction molecules.

No need to worry about poisons and hazardous wastes, just have your "disassemblers" break those nasty molecules down into smaller, safe, inert molecules to be used as raw material by the nanobots in the replicators.

Watch them (on screen) swim into the high tech compost muck, break the mess down, fetch the requisite molecules for the next project, haul them into the replicator, and snick them together into the configurations needed for the item desired.

To me the Do It Yourself movement would be far more in keeping with the decentralizing character of mature nanotechnology than many of the scenarios pictured by a number of science fiction writers in their nanotech stories. You know the kind: massive corporate or government run programs being run by PhDs with the resulting (for some strange reason expensive) food and consumer items being distributed to consumers much as they are now, while poor people receive their weekly dole of comparatively poor quality stuff.

But, once you consider the logic of the technology--that production of practically anything (except really big things) can take place in the home, with raw materials found in the home and can be made to exactly the same quality standards as anyone else's--the characteristically decentralized nature of DIY fits very nicely in that logic. Remember, the recipes directing the process could be and would be as detailed as needed to make EXACTLY what the user wants. This process would make a hash out of our concept of economic classes, and our concept of economics as a whole.

I don't know anyone of any ideological persuasion who disapproves of the hammering, sawing, painting, soldering, gluing activities of the do it yourselfers. This makes them the ideal non-political activists to ring in the new Abundance Society.

"I added that the current health care debate has to do with whether we will add universal health care insurance coverage to the safety net and, if so, how that will be implemented."

A safety net implies a devise that catches you when you fall. The other programs you mention (food stamps, public housing) are only for the poor, the disabled, or the elderly, groups we can roughly say have "fallen". We already have universal health coverage for these groups via Medicare and Medicaid. I wouldn't classify the average young, healthy, non-poor individual in the U.S. as having "fallen" from anything.

There's an additional impact of coupons vs stamps. A Cupon Queen, as you said, spends all her time economizing. That's time she doesn't have to go out and get a job, any job. Maybe times are tough and there are few jobs, but she never gets the chance. The stamp-getter can at least try for work.

My wife is a kindergarten teacher, and says her students are most interested in what is "fair". They bring it up constantly when they should be focusing on the school work. There are sharing issues too. Seems it's not such a natural concept, and is more difficult for some to learn than others. At public school they go to a lot of trouble (and every one's money) to prove everybody can work and be productive (some people have to overcome tremendous challenges to be productive). There is so much work to do in the USA and it goes undone, because the market won't support it (or the government). So, everybody needs to work, or have something productive to do, and everyone deserves a living wage for what they do. All the Maslow basics have got to be taken out of the market equation. It's not human to make a game of the basic necessities of life. I hope the Singularity Machine doesn't make a game of survival for us to play.

Remember how Dr. McCoy thought we were barbarians because of the way we do surgery? We are coupon and food stamp barbarians.

This is interesting, because it is part of a debate we have in my husband's business. He has a custom cabinetry woodshop/contractor business, which means he has lots of tools. Our friends frequently have DIY projects and ask if they can borrow the tools. So, they are undermining my husband's business AND taking advantage of "subsidized" equipment that the typical homeowner does not require, but sure makes those jobs a LOT easier.

"It's not human to make a game of the basic necessities of life."

Yes it is. Unless you consider the 99.99 % of our ancestors who were hunter-gatherers non-human.

Interesting that no one commented on my DIY comment. I think a lot of Singulatarians are still stuck in the zero-sum society mindset.

Sorry Robin, I didn't notice your comment on DIY until I made mine.

Let's say we achieve mature nanotech. No more paid jobs. No more jobs, per se. What will people do with themselves?

A lot of the DIYs who really do love building and fixing up will still do so with the very coolest power tools...built in their replicators.

Eadwacer has it all wrong. I work as a middle manager in an industry that employs many single moms - the archetypal coupon shopper. As the story noted, they spend (weekly) about an hour - sometimes two - clipping and organizing, and about 4 hours on shopping trips. For a single mom with a high school education, there is no other legal activity where they can gain $300 worth of goods for 4-6 hours of work. And every "Coupon Queen" I know is employed. If you're too lazy to work, you are too lazy to organize and discipline yourself to perform this task on a regular basis.

It would be sweet if, like the food stamps debit card, a centralized coupon debit card were available. You get coupons electronically, they're placed in the system, and then when you check out, you swipe your coupon card. If you're buying anything with an available coupon, your bill is reduced.

Harvey writes:

"It's not human..." etc.

Sally replies:

"Yes it is.." etc.

Actually, I think you both make a good point. It is indeed human to face a risky game of survival, but it's also the very definition of human to work on mitigating that risk. All of human history has been about managing risk, essentially changing the rules of the game. Being a hunter-gatherer was great (as we discussed on the podcast a few weeks ago)in terms of free time, but we were constantly up against this whole starve / freeze / drown / get eaten thing that kept spoiling the fun. So we settled down with a permanent food supply so we could start working or way up the Maslow Hierarchy. Industrialization was anther step in the same direction; the computer revolution was yet another.

Sally --

Interesting thoughts on DIY. Consider the role that the Home Brew Computer Club played in completely reshaping our world. Here's hoping we see a Home Brew Replicator Club very soon.

Harvey --

You're right. Our descendants will be appalled at how unfeeling and cruel we are, both for our treatment of each other and our treatment of animals. They will probably even see the Maslow hierarchy as crude and wrong-headed.

Robin --

Here's a thought. Maybe your husband should buy a whole new set of tools. He could pay for them by creating a sideline business renting his old tools!

Coupons can be great, but the coupon queen probably isn't eating very healthy. There aren't too many coupons for fresh produce, bread, milk. Mostly just dessert and pre-packaged (branded) items.

I question the existence of such coupon queens. Of course there are people who are thrifty and save money whenever they can, but the amounts some claim to save are ridiculous.

"Consider the role that the Home Brew Computer Club played in completely reshaping our world. Here's hoping we see a Home Brew Replicator Club very soon."

Yummy! Over the years, chocolate lovers have turned their love into small businesses, some of which have grown into big businesses.

Other people have done the same, customizing and turning their inventiveness into businesses.

Imagine, replicating any and all your favorite chocolate treats. :)

Question: How long will big businesses last as everyone is using their replicators and their DIY skills to customize?

Answer: About as long as big government.

The "Coupon Queen" is indulging in old-fashioned deal-scrounging. It *used* to be frowned upon by haughty WASP types as a Jewish sort of cunning, but it is pure petty capitalism.

She's taking advantage of every offered incentive. This strategy *ISN'T* funded by confiscated wealth known euphemistically as "tax dollars", but rather by the private investments of various retail and brand entities, made as part of their marketing strategies. These offers are contingent, timed, voluntary, and highly transient. If the retail and brand entities offering said incentives find that they are inadvantageous to their bottom-lines, they will pay off to the letter of the contract (the fine print on those coupons & the various retail outlets' then-current doubling policies, etc.), and then *change their terms*. There is no 'Forgotten Man' in the coupon-clipping contract, but rather voluntary contracted parties each with the ability to opt out of the relationship after stated period of obligation defined by the coupon itself.

In short, sir, your analogy is utterly incorrect. Your offer of it suggests that you have little understanding of the difference between aggressive trade practices and the act of rent-seeking. Here's a hint: it is definitionally impossible to seek rent absent a coercive authority, namely, governmental or criminal fiat.

Mitch --

Ah, I love the old appositive "sir."

That's some nice windy prose, and perhaps my analogy -- or, excuse me -- the offer of my analogy fails to meet the definition of Rent Seeking established by the Universal Authority on such things (who- or whatever that may be) but it appears that you don't quite grasp that we're all subsidizing the Coupon Queen's groceries, same as a Food Stamp participants'. Those companies issuing coupons get the money from somewhere, my friend. That's the basis of my analogy.

Granted, that doesn't sort well with some ideological templates. Oh well.

I'm amazed that some of you are seriously talking about the end of scarcity. But I suppose anyone can be inclined to believe any hypothetical, provided you're given infinity time and infinity opportunity.

It's easy to be optimistic, because there is a strong power in science and achievement.. but you're forgetting about the also-big power of humanity.

Humanity revelas that there will always be scarcity. Science moves us forward, but human nature will always demand more. And the second law of thermo says that there will always be limits on what a given system can provide.

Historically, the condition of humans has gone up. But 'scarcity,' such as it is, still exists. An ancient cave man would not believe that even the poorest modern citydweller is poor... but our standards of living have increased.

Which brings us to different ways of dealing with scarcity. Coupon Queen succeeds because she gleans off of the inefficiencies of and uneven distributions in the system. She's effectively creating wealth by taking advantage of existing opportunity, and using it to feed her family. These discount opportunities exist because they also produce an advertizing benefit for the company that offers them. This is different than a handout, which is money that the government could spend elsewhere. Wellfare fulifills no other benefit to society, other than a touchy-good feeling that we're doing what we 'have' to do. But that 'moral imperitive' blinds us from the reality that there ARE other ways. Coupon Queen proves it.

Mitch--You're right on. Rent-seeking absolutely requires state coercion.

Stephen--your comment regarding coupon-credit-cards: Retailers refer to "shrinkage" or "slippage", meaning they're really hoping someone will buy something but never get around to mailing in their rebate voucher, or will impulse-buy even if they forgot to bring their coupon. It's a marketing strategy, but not one they hope every consumer will follow-through on.

'...we're all subsidizing the Coupon Queen's groceries, same as a Food Stamp participants'. Those companies issuing coupons get the money from somewhere...'

Maybe the money for the coupons comes from the advertising budget of the companies such that the company that issues the coupons is spending less on radio/TV advertising than they would if they did not issue the coupons. If this is the case than the price paid by full pricers is the same with and without coupons.

Those companies issuing coupons get the money from somewhere, my friend.
--Phil Bowermaster

I'm just glad "somewhere" (whoever she may be) is supplying "those companies" the gazillions of dollars necessary to lower their prices from whatever astronomical arbitrary level might have been picked down to the posted retail price.

Or maybe reasoning-by-analogy has kinks still to be worked out, eh?

To the micro-economist, supermarket coupons are efforts by sellers to achieve price discrimination. Coupon issuers are attempting to assign different prices to customers with different sensitivities to price. The coupon clipper signals sensitivity to price to the seller by going through the trouble of hunting for, clipping, then carrying the coupons to the supermarket.

The question we need to ask is this: what other models of abundance -- more robust and scalable than clipping coupons and yet just as widely approved of -- might we tease out of today's marketplace as well as the marketplace of the near future?

Perhaps early-morning farmers' markets are similar to coupon-clipping. There's also gleaning in its various forms. Not as "widely approved of" yet still one of the "models of abundance" are second-hand stores. Much of Ebay is variations of second-hand store, flea-market table, and garage sale transactions.

And, I'm surprised that no one has yet mentioned the FOSS business model, in which payment is made by end users not in cash but in respect for the skills demonstrated.

The lady who wrote the Penny Pincher's Gazette said that she went to a feed store (like for farm animals) and bought a bag of oats which she cooked up in batches day by day for her family's breakfast. She also washed and reused plastic bags. She has the coupon clippers all beat.

...but it appears that you don't quite grasp that we're all subsidizing the Coupon Queen's groceries, same as a Food Stamp participants'...

Not quite the same; our subsidies of the Food Stamp recipient is not voluntary - one has no choice but to pay taxes. My subsidy to the Coupon Queen is voluntary - if I feel that a business is being too profligate with it's coupons, I can always take my business elsewhere.

As for the future, everything you postulate is driven by one thing - energy. The fact that here in the US a Corporation seeking to build an energy producing plant will be stymied for years with irrational lawsuits, and that we presently have an Administration that is on record as seeking to massively raise the cost of energy to consumers, suggests that it would be unwise to hold your breath in anticipation of the bright future you describe.

Mitch,

What's the matter with seeking rent? If you offer a service, in this case an apartment or office space, you should be able to collect rent from whoever is interested in using the space.

Do you believe everyone should give away what they built or hired others to build?

Would you have the same 'subsidized by others' complaint about an excellent corporate purchasing agent? Such a person buying large quantites of materials at bargain prices when suppliers are willing to sell low could be construed as being 'subsidized' by others under this line of argument.

However, companies offering discounts to third parties whether through coupons or face-to-face negotiations are simply recognizing that:

a. different customers have different price points and

b. sometimes a seller is willing to cut price for marginal revenues (or in times of tight cash flow) any revenues.

At least in the case of the coupon queen, the other party to the transaction is an arm's length transaction.

CCT --

"Would you have the same 'subsidized by others' complaint about an excellent corporate purchasing agent?"

I'm not complaining.

Also, for any others who want to argue about it, I never used the term "rent-seeking" (except for in response to Mitch.)

I'm not making a moral or ideological argument. I'm saying that, as an at-best limited coupon clipper, I'm picking up the tab for the Coupon Queen as surely as I am for her cousin on Food Stamps.

Thomas --

"My subsidy to the Coupon Queen is voluntary - if I feel that a business is being too profligate with it's coupons, I can always take my business elsewhere."

Yeah,I guess the bar is ever being raised for consumer due diligence, isn't it? :-)

rc

"Humanity revelas that there will always be scarcity. Science moves us forward, but human nature will always demand more. And the second law of thermo says that there will always be limits on what a given system can provide."

The difference between human desire and the ability to satisfy desire is at the core of the concept of scarcity.

If you require other human beings to do your making for you so you can satisfy your desire, you will always suffer from scarcity.

But.

If you are largely no longer dependent on the work of other human beings to satisfy your desire, then you have the opportunity to escape from scarcity.

This is what the nanotechnology revolution will lead to (IMHO), the breaking of that ancient link between human desire and human work to supply it.

The coupons make me think of alternative forms of currency, and that may be the best idea, for getting wealth moving downward through the economy again. I'll need plenty of help fleshing that idea out a bit. That seems to be the spirit of the article to me; how to get wealth raining downward. It's a lot of fun to blame the poor, but that is not the direction the money is going. What goes that way doesn't stay there long. We could maybe squeeze the poor some more, but prisons are so expensive, and we are already setting records in that arena. The middle class is shrinking and it isn't because of taxation.

Seems to me "scarcity" is just the term we use for anything less than average at the time when it's measured and abundance is just the upper range of the sum of the choices at a given time.

Is "scarcity" not having enough shelter? What is "enough?" A hovel or an apartment or a mansion or many mansions?

Would not having a full range of new worker-bee robots apply, or what if I only had one old beat-up robot?

Is it lack of food? Or lack of enough food to get fat? Or lack of anything I want whenever I want? Or is it defined as "less than the human average on the planet?"

And who pays for all this abundance? Even with my trusty nano-factory I still have to acquire raw materials. Who owns that? If common goods are easy to make I imagine raw materials would become astronomical in price by whoever owns them.

Even if those materials are made from dirt in your backyard, what happens when I run out of dirt?

Does someone who has access to modern medicine but still cant afford artificial organs or nano treatments suffer from scarcity? What if he can't afford the latest physical augments? Even if he lives to be 150, if rich people live to be 250 is he suffering from "scarcity" because he cant have anything and everything he wants?

"And who pays for all this abundance? Even with my trusty nano-factory I still have to acquire raw materials. Who owns that? If common goods are easy to make I imagine raw materials would become astronomical in price by whoever owns them."

Does your town pay you for the right to take away your garbage and sewage? Of course not. Right now, this stuff is considered undesirable "pollution."

The nanotechnology revolution will mean, among many other things, a revolution in the valuation of such material.

All that stuff, old socks, dead leaves, effluent, curdled milk, etc., we pay others to get rid of will all of a sudden be golden, will become very useful resources.

The answer to your question is "no one."

>> All that stuff, old socks, dead leaves, effluent, curdled milk, etc., we pay others to get rid of will all of a sudden be golden, will become very useful resources.

That seems way too Utopian to me. I think even if that were possible technologically some day, it would be be regulated and controlled by companies and governments so that things don't really change much in the end.

Governments around the world will probably declare that all physical matter within their jurisdiction is subject to regulation and rationing due to safety concerns and commerce laws. Back to square one.

Bicker, Bicker, Bicker...

I'd tell you about barter, but Im too busy fixing something for a guy in exchange for some nice
rib eyes.

Papa Ray
West Texas

Oh no! Poop sandwiches!

Actually, we do eat "poop sandwiches" all the time. The recycling of atoms and molecules just takes longer on the farm than it will in the closed-loop nanotech-run home.

Ewwwwwah!



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