"A positive externality exists when an individual or firm making a decision does not receive the full benefit of the decision. The benefit to the individual or firm is less than the benefit to society. Thus when a positive externality exists in an unregulated market, the marginal benefit curve (the demand curve) of the individual making the decision is less than the marginal benefit curve to society. With positive externalities, less is produced and consumed than the socially optimal level."
Basically, the SOCIALLY OPTIMAL level is when the outlay of a business is equal to the returns it gets OR what a consumer pays for a product is at the same rate at which they consume it - therefore meaning that the marginal COST of a product is equal to the marginal benefit to society.
Examples of the Problem of social gain!
"There are many Common examples of a positive externality. Immunization prevents an individual from getting a disease, but has the positive effect of the individual not being able to spread the disease to others. Keeping your yard well maintained helps your house's value and also helps the value of your neighbors' homes. Beekeepers can collect honey from their hives, but the bees will also pollinate surrounding fields and thus aid farmers."
Apparently this is a problem - so lets see how we can solve it, before all this social gain nonsense gets out of control!
Solving the Positive Externality Problem
"In order to get consumers to consume more of a good that has a positive externality, a subsidy can be given to them. The subsidy will increase the marginal benefit they receive when they consume the good. The subsidy can be payed for by all those who receive the external benefits."
So, there you have it - the Problem of positive social gain is solved by simply giving discounts and bulk-buy incentives to encourage the consumer to buy more. Isn't that what they tried to do recently by suspending VAT in Britain, til they realised that people were more interested in saving than spending? Why not just drive down the cost of living? I think the idea is to increase the demand for a product so as to ensure it maintains a high price and more items get sold. But that just creates more waste when a product, like the one's I've attained from Freecycle don't serve a purpose anymore, for one reason or another. Maybe that reason is because the previous owner needed something new, maybe they actually need it, maybe the item is damaged and they can't/don't want to fix it or they simply have too much stuff because they find it hard to get rid of even the most arbitrary of items. Whatever the reason one thing seems to tie them all together - the item itself represents a need.
The problem of Retail Therapy is that, like any other addiction, it is perhaps a replacement for some other need. If your goal in life is to collect as many items as possible that's fine but I seriously doubt that is the case for most people.
But anyway, now I've almost finished my rant, I think I'll round this entry off buy suggesting that the consumption philosophy doesn't help business - instead perhaps it just creates a world of emotionally malnourished, self-orientated confusionoids who don't understand what they really need. I personally believe that true satisfaction in life comes through achievement. Not the secondary achievement of having earned enough money selling insurance so you can buy a new sofa to match the new curtains; but in the primary achievement of expression and interaction with world through the process of creativity. In short, Art can create positive eventualities without the experience of loss. Art is the antithesis to the banality of consumption.