Showing posts sorted by relevance for query Demand. Sort by date Show all posts
Showing posts sorted by relevance for query Demand. Sort by date Show all posts

Thursday, December 7, 2023

Veblen

Veblen (pronounced vebluhn)

A product (a good) for which demand increases as the price increases, an anomaly in the classical laws of demand in the science of economics.

1899: The name is from the author, US economist and sociologist Thorstein Veblen (1857–1929); his observation was first mentioned in his book The Theory of the Leisure Class (1899).

Hermes Pink Ostrich Handbag.

The Veblen effect is one aspect of conspicuous consumption; it describes individual or corporate spending of money on goods and services for the purpose of displaying their financial resources, usually as a means to manifest social power and prestige.  It's related to the dealer's saying in the antique business: "If something doesn't sell, keep putting up the price until it does".  As a phenomenon the behavior obviously pre-dates social media but TikTok, Instagram and such have proved the ideal platform for both the flaunting of wealth and faking it.  Veblen goods are those which (at least to a certain point), behave differently from the classic demand curve of orthodox economics in that demand for them rises as the price increases.  They are usually luxury products (a thing something inherently a product of their price) but there are cases where transitory shortages not always directly related to cost can create scarcity and thus a desirably; the diabetes drug Ozempic which is used by those attracted to its appetite-suppressing side effect is an example.  The retail price at which most luxury goods are sold can contradict classic economic theory as demand, instead of increasing with a decrease in price, follows the opposite curve although the demand curve does not increase indefinitely with the price.  Once a certain threshold has been reached, demand will drop or fall away completely but the propensity to purchase goods and services on account of the higher rather than lower price differential compared to average prices in a generic category is one of the principal characteristics of the luxury domain.  

Lindsay Lohan with Hermes Pink Ostrich Birkin, London, 2017.

One interesting reaction by manufacturers or retailers to a price threshold being reached (at which point demand begins to fall), is artificially to create an impression of a supply-side shortage.  When it appears a price-point is exceeding what even conspicuous consumers will pay for a certain handbag, manufacturers sometimes claim they’re limited-production items available only to selected clients.  This is rarely true, the handbag being just another part-number, manufacturers producing as many as required to meet demand.  Economists provide some nuance to the Veblen effect by noting the influence of what they call “income and substitution effects”.  The income effect suggests that as the price of a Veblen good rises, individuals with higher incomes may actually experience an increase in real income (since they can still afford the more expensive item) and therefore demand more of the luxury item; the substitution effect is overridden by the desire for the specific status or prestige associated with the higher-priced item.  The professionals also caution the Veblen effect is not universal and both between and within cultures it can’t be relied upon always to appear as some manufacturers and retailers has discovered.

Tuesday, May 26, 2020

Fiscal

Fiscal (pronounced fis-kuhl)

(1) Off or relating to the public treasury or revenues.

(2) In casual use, of or relating to financial matters in general.

(3) A prosecuting attorney in Scotland, a contraction of procurator fiscal.

(4) In philately, a revenue stamp (a postage or other stamp signifying payment of a tax

(5) In some countries, a public official having control of public revenue.

(6) In some civil law or common-civil hybrids (including Spain, Portugal, the Netherlands, and former colonies of these countries and certain British colonies), the solicitor or attorney-general

1560s: From the Middle French fscal, from the Classical Latin fiscus (public money) and fiscālis (of the state treasury).  The Latin is of unknown etymology and suggestions are speculative: a connection with findō (I cleave) or a link to the rhyme with rarer riscus, a likely Celtic borrowing into Latin and Ancient Greek.  Most convincing is fidēlia (earthen pot, sometime translated as a purse or basket made of twigs in which money was kept).  The general sense of "financial" entered US English in 1865 and was abstracted from phrases like fiscal calendar and fiscal year.  Fiscal is a noun & adjective and fiscalization, fiscalizm & fiscalist are nouns; the noun plural is fiscals.  The nouns fiscalization, fiscalizm & fiscalist are used in the battles (waged for reasons both ideological & theoritical by culture warriors and activist economists) between those advocating the centrality either of monetary or fiscal as the central dynamic in public finances.

Fiscal Drag

Also known as "bracket creep", fiscal drag is the tendency of revenue from taxation to rise as a share of GDP in a growing economy.  Tax allowances, progressive tax rates and the threshold above which a particular rate of tax applies usually remain constant or are changed only gradually.  By contrast, as an economy grows, income, spending and corporate profits should rise, the tax-take therefore increasing without any need for government action.  This helps slow the rate of increase in demand, reducing the pace of growth, making less likely higher inflation; fiscal drag is thus an automatic stabilizer as it acts "naturally" to keep demand stable.  Economists did much work to adjust their models to reflect the post-GFC (Global Financial Crisis, 2008-2012) economy in which, while aggregate growth continued, the gains have tended to be concentrated in the hands of the rich with the incomes of most falling or stagnating in real-terms.  The historically peculiar effect the COVID-19 pandemic seems to have exacerbated these trends in fiscal outcomes, the most interesting of which has been the behavior of inflation now the allocation of the money supply is so distorted.

Salvator Mundi (Savior of the World, circa 1507), attributed in whole or in part to Leonardo da Vinci (1452–1519) sold at auction in 2017 US$450.3 million.  A 1967 Ferrari 275 GTB/4 Spider (NART) (bottom) by Scaglietti sold at auction in 2013 for US$27,500,000.  It may yet prove a bargain.  In 2018, a 1962 Ferrari 250 GTO (top) sold for $US48.4 million, a handy increase on the previous auction record of US$38.1 million paid for a 1963 250 GTO a year earlier and an even more impressive jump from its US$7 million sale in 2000.  Setting the record for the most expensive car ever sold was a privately-traded 250 GTO which in 2018 brought US$70 million.

Although it’s misleading to compare inflationary numbers with those of the 1970s & 1980s because the math of the calculation is now so different (and some of the changes did make sense), there’s no doubt the novel phenomenon of low inflation in the low-end of the economy and high inflation in the more rarefied air, is a product of very unusual circumstances, a succession of jolts and shocks, from the "Greenspan put" of the early 2000s, through the GFC, to the pandemic.  For two decades, the jolts and shocks have been buffered by seemingly limitless free money, now able to be distributed in a way which avoids general inflationary pressures while simultaneously driving up asset prices in objects as diverse as old masters and vintage Ferraris.  Economists are divided, both on whether this model can indefinitely continue and whether it’s a good idea, either in concept or its current specifics although all seem to concur it shouldn’t suddenly be stopped.  It’s not just the US Federal Reserve’s discount window which has been wide-open, the quantitatively-eased largess has been popular with many central banks so when adjustments to policy are made, there will be consequences.

Fiscal Neutrality

Fiscal neutrality is a term to describe the net effect of taxation and public spending being neutral, neither stimulating nor dampening demand. The term can be used to describe the overall stance of fiscal policy: a balanced budget is neutral, as total tax revenue equals total public spending.  It can also refer more narrowly to the combined impact of new measures introduced in an annual budget: the budget can be fiscally neutral if any new taxes equal any new spending, even if the overall stance of the budget either boosts or slows demand.

Fiscal policy

A nation’s fiscal policy is one of the two instruments of macroeconomic policy, the other being monetary policy. It comprises public spending and taxation, and any other government income or assistance to the private sector (such as tax breaks). It can be used to influence the level of demand in the economy, historically with the twin goals of maintaining low unemployment without triggering excessive inflation.  It can be deployed to manage short-term demand through fine tuning, although, since the beginning of the neo-liberal era in the 1980s, it has more often been targeted on long-term goals, with monetary policy preferred for shorter-term adjustments.  Disputes do exist, among both economists and politicians.  Some argue for a balanced budget as a structural end in itself while others suggest persistent deficits (public spending exceeding revenue) are acceptable provided, the deficit is used for investment in infrastructure or something useful rather than consumption.  However, even most deficit hawks concede fiscal policy should be counter-cyclical, aiming to automatically stabilize demand by increasing public spending relative to revenue when the economy is struggling and increasing taxes relative to spending towards the top of the cycle.

Thursday, October 16, 2025

Demand

Demand (pronounced dih-mand (U) or dee–mahnd (non-U))

(1) To ask for with proper authority; claim as a right.

(2) To ask for peremptorily or urgently.

(3) To call for or require as just, proper, or necessary.

(4) In law, to lay formal claim to.

(5) In law, to summon, as to court.

(6) An urgent or pressing requirement.

(7) In economics, the desire to purchase, coupled (hopefully) with the power to do so.

(8) In economics, the quantity of goods that buyers will take at a particular price.

(9) A requisition; a legal claim.

(10) A question or inquiry (archaic).

1250-1300: From Middle English demaunden and Anglo-French demaunder, derived from the Medieval Latin dēmandāre (to demand, later to entrust) equivalent to  + mandāre (to commission, order).  The Old French was demander and, like the English, meant “to request” whereas "to ask for as a right" emerged in the early fifteenth century from Anglo-French legal use.  As used in economic theory and political economy (correlating to supply), first attested from 1776 in the writings of Adam Smith.  The word demand as used by economists is a neutral term which references only the conjunction of (1) a consumer's desire to purchase goods or services and (2) hopefully the power to do so.  However, in general use, to say that someone is "demanding" something does carry a connotation of anger, aggression or impatience.  For this reason, during the 1970s, the language of those advocating the rights of women to secure safe, lawful abortion services changed from "abortion on demand" (ie the word used as an economist might) to "pro choice".  Technical fields (notably economics) coin derived forms as they're required (counterdemand, overdemand, predemand etc).  Demand is a noun & verb, demanding is a verb & adjective, demandable is an adjective, demanded is a verb and demander is a noun; the noun plural is demands.

Video on Demand (VoD)

Directed by Tiago Mesquita with a screenplay by Mark Morgan, Among the Shadows is a thriller which straddles the genres, elements of horror and the supernatural spliced in as required.  Although in production since 2015, with the shooting in London and Rome not completed until the next year, it wasn’t until 2018 when, at the European Film Market, held in conjunction with the Internationale Filmfestspiele Berli (Berlin International Film Festival), that Tombstone Distribution listed it, the distribution rights acquired by VMI, Momentum and Entertainment One, and VMI Worldwide.  In 2019, it was released progressively on DVD and video on demand (VoD), firstly in European markets, the UK release delayed until mid-2020.  In some markets, for reasons unknown, it was released with the title The Shadow Within.

Video on Demand (VoD) and streaming services are similar concepts in video content distribution but there are differences.  VoD is a system which permits users to view content at any time, these days mostly through a device connected to the internet across IP (Internet Protocol), the selection made from a catalog or library of available titles and despite some occasionally ambiguous messaging in the advertising, the content is held on centralized servers and users can choose directly to stream or download.  The VoD services is now often a sub-set of what a platform offers which includes content which may be rented, purchased or accessed through a subscription.

Streaming is a method of delivering media content in a continuous flow over IP and is very much the product of the fast connections of the twenty-first century.  Packets are transmitted in real-time which enables users to start watching or listening without waiting for an entire file (or file set) to download, the attraction actually being it obviates the need for local storage.  There’s obviously definitional and functional overlap and while VoD can involve streaming, not all streaming services are technically VoD and streaming can also be used for live events, real-time broadcasts, or continuous playback of media without specific on-demand access. By contrast, the core purpose of VoD is to provide access at any time and streaming is a delivery mechanism, VoD a broad concept and streaming a specific method of real-time delivery as suited to live events as stored content.

The Mercedes-Benz SSKL and the Demand Supercharger

Modern rendition of Mercedes-Benz SSLK in schematic, illustrating the drilled-out chassis rails.  The title is misleading because the four or five SSKLs built were all commissioned in 1931 (although it's possible one or more used a modified chassis which had been constructed in 1929).  All SSK chassis were built between 1928-1932 although the model remained in the factory's catalogue until 1933. 

The Mercedes-Benz SSKL was one of the last of the road cars which could win top-line grand prix races.  An evolution of the earlier S, SS and SSK, the SSKL (Super Sports Kurz (short) Leicht (light)) was notable for the extensive drilling of its chassis frame to the point where it was compared to Swiss cheese; reducing weight with no loss of strength.  The SSKs and SSKLs were famous also for the banshee howl from the engine when the supercharger was running; nothing like it would be heard until the wail of the BRM V16s twenty years later.  It was called a demand supercharger because, unlike some constantly-engaged forms of forced-induction, it ran only on-demand, in the upper gears, high in the rev-range, when the throttle was pushed wide-open.  Although it could safely be used for barely a minute at a time, when running, engine power jumped from 240-odd horsepower (HP) to over 300.  The number of SSKLs built has been debated and the factory's records are incomplete because (1) like many competition departments, it produced and modified machines "as required" and wasn't much concerned about documenting the changes and (2) many archives were lost as a result of bomb damage during World War II (1939-1945); most historians suggest there were four or five SSKLs, all completed (or modified from earlier builds) in 1931.  The SSK had enjoyed great success in competition but even in its heyday was in some ways antiquated and although powerful, was very heavy, thus the expedient of the chassis-drilling intended to make it competitive for another season.  Lighter (which didn't solve but at least to a degree ameliorated the brake & tyre wear) and easier to handle than the SSK (although the higher speed brought its own problems, notably in braking), the SSKL enjoyed a long Indian summer and even on tighter circuits where its bulk meant it could be out-manoeuvred, sometimes it still prevailed by virtue of durability and sheer power.

Rudolf Caracciola (1901–1959) and SSKL in the wet, German Grand Prix, Nürburgring, 19 July, 1931.  Alfred Neubauer (1891–1980; racing manager of the Mercedes-Benz competition department 1926-1955) maintained Caracciola "...never really learned to drive but just felt it, the talent coming to him instinctively.   

Sometimes too it got lucky.  When the field assembled in 1931 for the Fünfter Großer Preis von Deutschland (fifth German Grand Prix) at the Nürburgring, even the factory acknowledged that at 1600 kg (3525 lb), the SSKLs, whatever their advantage in horsepower, stood little chance against the nimble Italian and French machines which weighed-in at some 200 KG (440 lb) less.  However, on the day there was heavy rain with most of race conducted on a soaked track and the twitchy Alfa Romeos, Maseratis and the especially skittery Bugattis proved less suited to the slippery surface than the truck-like but stable SSKL, the lead built up in the rain enough to secure victory even though the margin narrowed as the surface dried and a visible racing-line emerged.  Time and the competition had definitely caught up by 1932 however and it was no longer possible further to lighten the chassis or increase power so aerodynamics specialist Baron Reinhard von Koenig-Fachsenfeld (1899-1992) was called upon to design a streamlined body, the lines influenced both by his World War I (1914-1918 and then usually called the "World War") aeronautical experience and the "streamlined" racing cars which had been seen in the previous decade.  At the time, the country greatly was affected by economic depression which spread around the world after the 1929 Wall Street crash, compelling Mercedes-Benz to suspend the operations of its competitions department so the one-off "streamliner" was a private effort (though with some tacit factory assistance) financed by the driver (who borrowed some of the money from his mechanic!).

The streamlined SSKL crosses the finish line, Avus, 1932.

The driver was Manfred von Brauchitsch (1905-2003), nephew of Major General (later Generalfeldmarschall (Field Marshal)) Walther von Brauchitsch (1881–1948; Oberbefehlshaber (Commander-in-Chief) of OKH (Oberkommando des Heeres (the German army's high command) 1938-1941).  An imposing but ineffectual head of the army, Uncle Walther also borrowed money although rather more than loaned by his nephew's mechanic, the field marshal's funds coming from the state exchequer, "advanced" to him by Adolf Hitler (1889-1945; Führer (leader) and German head of government 1933-1945 & head of state 1934-1945).  Quickly Hitler learned the easy way of keeping his mostly aristocratic generals compliant was to loan them money, give them promotions, adorn them with medals and grant them estates in the lands he'd stolen during his many invasions.  His "loans" proved good investments.  Beyond his exploits on the circuits, Manfred von Brauchitsch's other footnote in the history of the Third Reich (1933-1945) is the letter sent on April Fools' Day 1936 to Uncle Walther (apparently as a courtesy between gentlemen) by Baldur von Schirach (1907-1974; head of the Hitlerjugend (Hitler Youth) 1931-1940 & Gauleiter (district party leader) and Reichsstatthalter (Governor) of Vienna 1940-1945) claiming he given a "horse whipping" to the general's nephew because a remark the racing driver was alleged to have made about Frau von Schirach (the daughter of Hitler's court photographer!).  It does seem von Schirach did just that though it wasn't quite the honorable combat he'd claimed: in the usual Nazi manner he'd arrived at von Brauchitsch's apartment in the company of several thugs and, thus assisted, swung his leather whip.  Von Brauchitsch denied ever making the remarks.  Unlike the German treasury, the mechanic got his money back and that loan proved a good investment, coaxing from the SSKL a victory in its final fling.  Crafted in aluminum by Vetter in Cannstatt, the body was mounted on von Brauchitsch's race-car and proved its worth at the at the Avusrennen (Avus race) in May 1932; with drag reduced by a quarter, the top speed increased by some 12 mph (20 km/h) and the SSKL won its last major trophy on the unique circuit which rewarded straight-line speed like no other.  It was the last of the breed; subsequent grand prix cars would be pure racing machines with none of the compromises demanded for road-use.

Evolution of the front-engined Mercedes-Benz grand prix car, 1928-1954

1928 Mercedes-Benz SS.

As road cars, the Mercedes-Benz W06  S (1927-1928) & SS (1928-1930) borrowed unchanged what had long been the the standard German approach in many fields (foreign policy, military strategy, diplomacy, philosophy etc): robust engineering and brute force; sometimes this combination worked well, sometimes not.  Eschewing refinements in chassis engineering or body construction as practiced by the Italians or French, what the S & SS did was achieved mostly with power and the reliability for which German machinery was already renowned.  Although in tighter conditions often out-manoeuvred, on the faster circuits both were competitive and the toughness of their construction meant, especially on the rough surfaces then found on many road courses, they would outlast the nimble but fragile opposition.

1929 Mercedes-Benz SSK.

By the late 1920s it was obvious an easier path to higher performance than increasing power was to reduce the SS's (Super Sport) size and weight.  The former easily was achieved by reducing the wheelbase, creating a two-seat sports car still suitable for road and track, tighter dimensions and less bulk also reducing fuel consumption and tyre wear, both of which had plagued the big, supercharged cars.  Some engine tuning and the use of lighter body components achieved the objectives and the SSK was in its era a trophy winner in sports car events and on the grand prix circuits.  Confusingly, the "K" element in the name stood for kurz (short) and not kompressor (supercharger) as was applied to some other models although all SSKs used a supercharged, 7.1 litre (433 cubic inch) straight-six. 

1931 Mercedes-Benz SSKL.

The French, British and Italian competition however also were improving their machinery and by late 1930, on the racetracks,  the SSK was becoming something of a relic although it remained most desirable as a road car, demand quelled only by a very high price in what suddenly was a challenging economic climate.  Without the funds to create anything new and with the big engine having reached the end of its development potential, physics made obvious to the engineers more speed could be attained only through a reduction in mass so not only were body components removed or lightened where possible but the chassis and sub-frames were drilled to the point where the whole apparatus was said to resemble "a Swiss cheese".  The process was time consuming but effective because, cutting the SSK's 1600 KG heft to the SSKL's more svelte 1445 (3185), combined with the 300-odd HP which could be enjoyed for about a minute with the supercharger engaged, produced a Grand Prix winner which was competitive for a season longer than any had expected and one also took victory in the 1931 Mille Miglia.  Although it appeared in the press as early a 1932, the "SSKL" designation is retrospective, the factory's extant records listing the machines either as "SSK" or "SSK, model 1931".  No more than five were built and none survive (rumors of a frame "somewhere in Argentina" apparently an urban myth) although some SSK's were at various times "drilled out" to emulate the look and the appeal remains, a replica cobbled together from real and fabricated parts sold at auction in 2007 for over US$2 million; this was when a million dollars was still a lot of money.  

1932 Mercedes-Benz SSKL (die Gurke).

The one-off bodywork (hand beaten from aircraft-grade sheet aluminum) was fabricated for a race held at Berlin's unique Automobil-Verkehrs- und Übungsstraße (Avus; the "Automobile traffic and training road") which featured two straights each some 6 miles (10 km) in length, thus the interest in increasing top speed and while never given an official designation by the factory, the crowds dubbed it die Gurke (the cucumber).  The streamlined SSKL won the race and was the first Mercedes-Benz grand prix car to be called a Silberpfeil (silver arrow), the name coined by radio commentator Paul Laven (1902-1979) who was broadcasting trackside for Südwestdeutsche Rundfunkdienst AG (Southwest German Broadcasting Service); he was struck by the unusual appearance although the designer had been inspired by an aircraft fuselage rather than arrows or the vegetable of popular imagination.  The moniker was more flattering than the nickname Weiße Elefanten (white elephant) applied to S & SS which was a reference to their bulk and not a use of the phrase in its usual figurative sense.  The figurative sense came from the Kingdom of Siam (modern-day Thailand) where elephants were beasts of burden, put to work hauling logs in forests or carting other heavy roads but the rare white (albino) elephant was a sacred animal which could not be put to work.  However, the owner was compelled to feed and care for the unproductive creature and the upkeep of an elephant was not cheap; they have large appetites.  According to legend, if some courtier displeased the king, he could expect the present of a white elephant.  A “white elephant” is thus an unwanted possession that though a financial burden, one is “stuck with” and the term is applied the many expensive projects governments around the world seem unable to resist commissioning.

Avus circuit.  Unique in the world, it was the two long straights which determined die Gurke's emphasis on top speed.  Even the gearing was raised (ie a numerically lower differential ratio) because lower engine speeds were valued more than low-speed acceleration which was needed only once a lap.

The size of the S & SS was exaggerated by the unrelieved expanses of white paint (Germany's designated racing color) although despite what is sometimes claimed, Ettore Bugatti’s (1881–1947) famous quip “fastest trucks in the world” was his back-handed compliment not to the German cars but to W. O. Bentley’s (1888–1971) eponymous racers which he judged brutish compared to his svelte machines.  Die Gurke ended up silver only because such had been the rush to complete the build in time for the race, there was time to apply the white paint so it raced in a raw aluminum skin.  Remarkably, in full-race configuration, die Gurke was driven to Avus on public roads, a practice which in many places was tolerated as late as the 1960s.  Its job at Avus done, die Gurke was re-purposed for high-speed tyre testing (its attributes (robust, heavy and fast) ideal for the purpose) before "disappearing" during World War II.  Whether it was broken up for parts or metal re-cycling, spirted away somewhere or destroyed in a bombing raid, nobody knows although it's not impossible conventional bodywork at some point replaced the streamlined panels.  In 2019, Mercedes-Benz unveiled what it described as an "exact replica" of die Gurke, built on an original (1931) chassis.    

1934 Mercedes-Benz W25.

After building the replica Gurke, Mercedes-Benz for the first time subjected it to a wind-tunnel test, finding (broadly in line with expectations) its c(coefficient of drag) improved by about a third, recording 0.616 against a standard SSK's 0.914.  By comparison, the purpose-built W25 from 1934 delivered a 0.614 showing how effective Baron Koenig-Fachsenfeld's design had been although by today's standards, the numbers are not of shapes truly "slippery".  Although "pure" racing cars had for years existed, the W25 (Werknummer (works number) 25) was the one which set many elements is what would for a quarter-century in competition be the default template for most grand prix cars and its basic shape and configuration remains recognizable in the last front-engined car to win a Word Championship grand prix in 1960.  The W25 was made possible by generous funding from the new Nazi Party, "prestige projects" always of interest to the propaganda-minded party.  With budgets which dwarfed the competition, immediately the Mercedes-Benz and Auto Unions enjoyed success and the W25 won the newly inaugurated 1935 European Championship.  Ironically, the W25's most famous race was the 1935 German Grand Prix at the Nürburgring, won by the inspired Italian Tazio Nuvolari (1892–1953) in an out-dated and under-powered Alfa-Romeo P3, von Brauchitsch's powerful W25 shredding a rear tyre on the final lap.  However, the Auto Union's chassis design fundamentally was more farsighted; outstanding though the engine was, the W25's platform was, in many ways, eine bessere Gurke (a better cucumber) and because its limitations were inherent, the factory "sat out" most of the 1936 season to develop the W125.

1937 Mercedes-Benz W125.

Along with the dramatic, mid-engined,  V16 Auto Union Type C, the W125 was the most charismatic race car of the "golden age" of 1930s European circuit racing.  When tuned for use on the fastest circuits, the 5.7 litre (346 cubic inch) straight-eight generated over 640 HP and in grand prix racing that number would not be exceeded until the turbocharged engines (first seen in 1977) of the 1980s.  The W125 used a developed version of the W25's 3.4 (205) & 4.3 (262) straight-eights and the factory had assumed this soon would be out-performed by Auto Union's V16s but so successful did the big-bore eight prove the the Mercedes-Benz V16 project was aborted, meaning resources didn't need to be devoted to the body and chassis engineering which would have been required to accommodate the bigger, wider and heavier unit (something which is subsequent decades would doom a Maserati V12 and Porsche's Flat-16.  The W125 was the classic machine of the pre-war "big horsepower" era and if a car travelling at 100 mph (160 km/h) passed a W125 at standstill, the latter could accelerate and pass that car within a mile (1.6 km).


A W125 on the banked Nordschleife (northern ribbon (curve)) at Avus, 1937.  At Avus, the streamlined bodywork was fitted because a track which is 20 km (12 miles) in length but has only four curves puts an untypical premium on top-speed.  The banked turn was demolished in 1967 because increased traffic volumes meant an intersection was needed under the Funkturm (radio tower), tower and today only fragments of the original circuit remain although the lovely art deco race control tower still exists and was for a time used as restaurant.  Atop now sits a Mercedes-Benz three-pointed star rather than the swastika which flew in 1937. 

1938 Mercedes-Benz W154.

On the fastest circuits the streamlined versions of the W125s were geared to attain 330 km/h (205 mph) and 306 km/h (190 mph) often was attained in racing trim.  With streamlined bodywork, there was also the Rekordwagen built for straight-line speed record attempts and one set a mark of 432.7 km/h (268.9 mph), a public-road world speed record that stood until 2017.  Noting the speeds and aware the cars were already too fast for circuits which had been designed for, at most, velocities sometimes 100 km/h (50 mph) less, the governing body changed the rules, limiting the displacement for supercharged machines to 3.0 litres (183 cubic inch), imagining that would slow the pace.  Fast though the rule-makers were, the engineers were quicker still and it wasn't long before the V12 W154 was posting lap-times on a par with the W125 although they did knock a few km/h off the top speeds.  The rule change proved as ineffective in limiting speed as the earlier 750 KG formula which had spawned the W25 & W125.

1939 Mercedes-Benz W165.

An exquisite one-off, the factory built three W165s for the single purpose of contesting the 1939 Tripoli Grand Prix.  Remarkable as it may now sound, there used to be grand prix events in Libya, then a part of Italy's colonial empire.  Anguished at having for years watched the once dominant Alfa Romeos enjoy only the odd (though famous) victory as the German steamroller flattened all competition (something of a harbinger of the Wehrmacht's military successes in 1939-1940), the Italian authorities waited until the last moment before publishing the event's rules, stipulating the use of a voiturette (small car) with a maximum displacement of 1.5 litres  (92 cubic inch).  The rules were designed to suit the Alfa Romeo 158 (Alfetta) and Rome was confident the Germans would have no time to assemble such a machine.  However, knowing Adolf Hitler (1889-1945; Führer (leader) and German head of government 1933-1945 & head of state 1934-1945), still resenting what happened at the Nürburgring in 1935, would not be best pleased were his Axis partner (and vassal) Benito Mussolini (1883-1945; Duce (leader) & Prime-Minister of Italy 1922-1943) to enjoy even this small victory, the factory scrambled and conjured up the V8-powered (a first for Mercedes-Benz) W165, the trio delivering a "trademark 1-2-3" finish in Tripoli.  As a consolation, with Mercedes-Benz busy building inverted V12s for the Luftwaffe's Messerschmitts, Heinkels and such, an Alfa Romeo won the 1940 Tripoli Grand Prix which would prove the city's last.      
 
1954 Mercedes Benz W196R Strómlinienwagen (literally "streamlined car" but translated usually as "Streamliner".

A curious mix of old (drum brakes, straight-eight engine and swing axles) and new (a desmodromic valve train, fuel injection and aerodynamics developed in a wind-tunnel with the help of engineers then banned from being involved in aviation), the intricacies beneath the skin variously bemused or delighted those who later would come to be called nerds but it was the sensuous curves which attracted most publicity.  Strange though it appeared, it was within the rules and clearly helped deliver stunning speed although the pace did expose some early frailty in road-holding (engineers have since concluded the thing was a generation ahead of tyre technology).  It was one of the prettiest grand prix cars of the post war years and the shape (sometimes called "type Monza", a reference to the Italian circuit with long straights so suited to it) would later much appeal to pop-artist Andy Warhol (1928–1987) who used it in a number of prints.

1954 Mercedes-Benz W196R.  In an indication of how progress accelerated after 1960, compare this W196R with (1) the W25 of 20 years earlier and (2) any grand prix car from 1974, 20 years later. 

However, although pleasing to the eye, the W196R Strómlinienwagen was challenging even for expert drivers and it really was a machine which deserved a de Dion rear suspension rather than the swing axles (on road cars the factory was still building a handful with these as late as 1981 and their fudge of semi-trailing rear arms (the "swing axle when you're not having a swing axle") lasted even longer).  Of more immediate concern to the drivers than any sudden transition to oversteer was that the aluminium skin meant they couldn't see the front wheels so, from their location in the cockpit, it was difficult to judge the position of the extremities, vital in a sport where margins can be fractions of a inch.  After the cars in 1954 returned to Stuttgart having clouted empty oil drums (those and bails of hay was how circuity safety was then done) during an unsuccessful outing to the British Grand Prix at Silverstone, a conventional body quickly was crafted and although visually unremarkable, the drivers found it easier to manage and henceforth, the Strómlinienwagen appeared only at Monza.  There was in 1954-1955 no constructor's championship but had there been the W196R would in both years have won and it delivered two successive world driver's championships for Juan Manuel Fangio (1911–1995).  Because of rule changes, the three victories by the W196R Strómlinienwagen remain the only ones in the Formula One World Championship (since 1950) by a car with enveloping bodywork.

Wednesday, July 10, 2024

Customer

Customer (pronounced kuhs-tuhm-ah)

(1) A habitual patron, regular purchaser, returning client; one who has a custom of buying from a particular business (obsolete in its technical sense).

(2) A patron, a client; one who purchases or receives a product or service from a business or merchant, or intends to do so.

(3) In various slang forms (cool customer, tough customer, ugly customer, customer from hell, dream customer etc), a person, especially one engaging in some sort of interaction with others.

(4) Under the Raj, a native official who exacted customs duties (historic use from British colonial India).

Late 1300s: From the Middle English customere & custommere (one who purchases goods or supplies, one who customarily buys from the same tradesman or guild), from custumer (customs official, toll-gatherer), from the Anglo-French custumer, from the Old French coustumier & costumier (from which modern French gained coutumier (customary, custumal)), from the Medieval Latin noun custumarius (a toll-gatherer, tax-collector), a back-formation from the adjective custumarius (pertaining to custom or customs) from custuma (custom, tax).  The literal translation of the Medieval Latin custumarius was “pertaining to a custom or customs”, a contraction of the Latin consuetudinarius, from consuetudo (habit, usage, practice, tradition).  The generalized sens of “a person with whom one has dealings” emerged in the 1540s while that of “a person to deal with” (then as now usually with some defining adjective: “tough customer”, difficult customer” etc) was in use by the 1580s.  Derived terms are common including customer account, customer base, customer care, customer experience, customer-oriented, customer research, customer resistance, customer service, customer success, customer support, direct-to-customer, customer layer, customer-to-customer, ugly customer, tough customer, difficult customer etc.  Customer is a noun; the noun plural is customers.

William Shakespeare (1564–1616) used the word sometimes to mean “prostitute” and in his work was the clear implication that a buyer was as guilty as the seller, the law both unjust and hypocritical, something which in the twentieth century would be rectified in Swedish legislation.

Shakespeare: All's Well That Ends Well (circa 1602), Act 5, scene 3

LAFEW:  This woman’s an easy glove, my lord; she goes off and on at pleasure.

KING: This ring was mine. I gave it his first wife.

DIANA: It might be yours or hers for aught I know.

KING (to attendants) Take her away. I do not like her now.  To prison with her, and away with him. Unless thou tell’st me where thou hadst this ring, Thou diest within this hour.

DIANA: I’ll never tell you.

KING: Take her away.

DIANA: I’ll put in bail, my liege.

KING: I think thee now some common customer.

DIANA (to Bertram): By Jove, if ever I knew man, ’twas you.

In Sweden, the law was amended in a way of which Shakespeare might have approved, Chapter 6, Section 11 of the Swedish Penal Code making it an offence to pay for sex, the act of “purchasing sexual services” criminalized, the aim being to reduce the demand for prostitution.  The law provides for fines or a maximum term of imprisonment for one year, depending on the circumstances of the case.  So selling sexual services is not unlawful in Sweden but being a customer is, an inversion of the model for centuries applied in the West.  Individuals who engage in prostitution are not criminalized under Swedish law, which is intended to protect sex workers from legal penalties while targeting the customers, now defined as those who “exploit them”.  The Swedish model aims to reduce prostitution by focusing on the demand side and providing support for those who wish to exit prostitution and as a statement of public policy, the law reform reflected the government’s view prostitution was a form of gender inequality and exploitation.  The effectiveness of the measure has over the years been debated and the customer-focused model of enforcement has not widely been emulated.

The customer is always right

Reliable return customer: Lindsay Lohan in the Chanel Shop, New York City, May 2013.

The much quoted phrase (which in some areas of commerce is treated as a proverb): “the customer is always right” has its origins in retail commerce and is used to encapsulate the value: “service staff should give high priority to customer satisfaction”.  It is of course not always literally true, the point being that even when patently wrong about something, it is the customer who is paying for stuff so they should always be treated as if they are right.  Money being the planet’s true lingua franca, variations exist in many languages, the best known of which is the French le client n'a jamais tort (the customer is never wrong), the slogan of Swiss hotelier César Ritz (1850-1918) whose name lived on in the Hôtel Ritz in Paris, the Ritz and Carlton Hotels in London and the Ritz-Carlton properties dotted around the world.  While not always helpful for staff on the shop floor, it’s an indispensible tool for those basing product manufacturing or distribution decisions on aggregate demand.  To these bean counters, what is means is that if there is great demand for red widgets and very little for yellow widgets, the solution is probably not to commission an advertising campaign for yellow widgets but to increase production of the red, while reducing or even ceasing runs of the yellow.  The customer is “right” in what they want, not in the sense of “right & wrong” but in the sense of their demand being the way to work out what is the “right” thing to produce because it will sell.

Available at Gullwing Motor Cars: Your choice at US$129,500 apiece.

The notion of “the customer is always right” manifests in the market for pre-modern Ferraris (a pre-1974 introduction the accepted cut-off).  While there nothing unusual about differential demand in just about any market sector, dramatically is it illustrated among pre-modern Ferraris with some models commanding prices in multiples of others which may be rarer, faster, more credentialed or have a notionally more inviting specification.  That can happen when two different models are of much the same age and in similar condition but a recent listing by New York-based Gullwing Motor Cars juxtaposed two listings which left no doubt where demand exists.  The two were both from 1972: a 365 GTC/4 and a Dino 246 GT.

Some reconditioning required: 1972 Ferrari 356 GTC/4

The 365 GTC/4 was produced for two years between 1971-1972 during which 505 were built.  Although now regarded as a classic of the era, the 365 GTC/4 lives still in the shadow of the illustrious 365 GTB/4 with which, mechanically, it shares much.  The GTB/4 picked up the nickname “Daytona”, an opportunistic association given 1-2-3 finish in the 1967 24 Hours of Daytona involved three entirely different models while the GTC/4 enjoyed only the less complementary recognition of being labeled by some il gobbone (the hunchback) or quello alla banana (the banana one).  It was an unfair slight and under the anyway elegant skin, the GTB/4 & GTC/4 shared much, the engine of the latter differing mainly in lacking the dry-sump lubrication and the use of six twin-choke side-draft Weber carburetors rather than the downdrafts, this permitting a lower bonnet (hood) line.  Revisions to the cylinder heads allowed the V12 to be tuned to deliver torque across a broad rev-range rather than the focus on top-end power which was one of the things which made the GTB/4 so intoxicating.

Criticizing the GTC/4 because it doesn’t quite have the visceral appeal of the GTB/4 seems rather like casually dismissing the model who managed only to be runner-up to Miss Universe.  The two cars anyway, despite sharing a platform, were intended for different purposes, the GTB/4 an outright high performance road car which could, with relatively few modifications, be competitive in racing whereas the GTC/4 was a grand tourer, even offering occasional rear seating for two (short) people.  One footnote in the history of the marque is the GTC/4 was the last Ferrari offered with the lovely Borrani triple-laced wire wheels; some GTB/4s had them fitted by the factory and a few more were added by dealers but the factory advised that with increasing weight, tyres with much superior grip and higher speeds, they were no longer strong enough in extreme conditions and the cast aluminum units should be used if the car was to be run in environments without speed restrictions such as race tracks or certain de-restricted public roads (then seen mostly in the FRG (Federal Republic of Germany, the old West Germany, Montana & Nevada in the US and Australia's Northern Territory & outback New South Wales (NSW)).  The still stunning GTB/4 was the evolutionary apex of its species; it can't be improved upon but the GTC/4 is no ugly sister and when contemplating quello alla banana, one might reflect on the sexiness of the fruit.

Gullwing’s offering was described as “a highly original unrestored example in Marrone Colorado (Metallic Brown) with a tan leather interior, factory air conditioning, and power windows; showing 48K miles (77K kilometres) on the odometer.  It has been sitting off the road for several years and is not currently running. It was certainly highly original and seemed complete but properly should be regarded as a “project” because of the uncertainty about the extent (and thus the cost) of the recommissioning.  At an asking price of US$129,500, it would represent good value only if it was mechanically sound and no unpleasant surprises were found under the body’s shapely curves although, given the market for 365 GTC/4s in good condition, it was a project best taken on by a specialist.

Some assembly required: 1972 Dino 246 GT by Ferrari

The days are gone when the Dino 246 was dismissed as “more of a Fiat than a Ferrari” and even if the factory never put their badge on the things (although plenty subsequently have added one), they are now an accepted part of the range.  The 246 replaced the visually almost similar but slightly smaller and even more jewel-like Dino 206, 152 of which (with an all-aluminium 2.0 litre (122 cubic inch) V6 rather than the V12s which had for some years been de rigueur in Ferrari’s road cars) were built between 1967-1969, all with berlinetta (coupé) bodywork.  Mass-produced by comparison, there were 3569 Dino 246s produced between 1969-1974, split between 2,295 246 GTs (coupés) & 1,274 246 GTSs (spyders (targa)).  Fitted with an iron-block 2.4 litre (147 cubic inch) V6, the Dinos were designed deliberately to be cheaper to produce and thus enjoy a wider market appeal, the target those who bought the more expensive Porsche 911s, a car the Dino (mostly) out-performed.  In recent decades, the Dino 246 has been a stellar performer in the collector market, selling typically for three times the price of something like a 365 GTC/4; people drawn to the seductive lines rather than the significantly better fuel consumption.

Most coveted of the 246s are those described with the rhyming colloquialism “chairs and flares” (C&F to the Ferrari cognoscenti), a reference to a pair of (separately available) options available on later production Dino 246s.  The options were (1) seats with inserts (sometimes in a contrasting color) in the style used on the Daytona & (2) wider Campagnolo Elektron wheels (which the factory only ever referred to by size) which necessitated flared wheel-arches.  At a combined US$795.00 (in 1974), the C&F combination has proved a good investment, now adding significantly to the price of the anyway highly collectable Dino.  Although it's hard to estimate the added value because so many other factors influence calculation, all else being equal, the premium is usually between US$100-200,000 but these things are always relative; in 1974 the C&F option added 5.2% to a Dino GTS's list price and was just under a third the cost of a new small car such as the Chevrolet Vega.  It was a C&F Dino 246 GTS which in 1978 was found buried in a Los Angeles where it had sat for some four years after being secreted away in what turned out to be an unplanned twist to a piece of insurance fraud.  In remarkably good condition (something attributed to its incarceration being during one of California’s many long droughts), it was fully restored.

Not in such good condition is the post-incineration Dino 246 GT (not a C&F) being offered by Gullwing Motor Cars, the asking price the same US$129,500 as the 365 GTC/4.  Also built in 1972, Gullwing helpfully describe this as “project”, probably one of history’s less necessary announcements.  The company couldn’t resist running the title “Too Hot to Handle” and described the remains as “…an original car that has been completely burnt.  Originally born in Marrone Colorado with beige leather.  It comes with its clear matching title and this car clearly needs complete restoration, but the good news is that it's certainly the cheapest one you will ever find.  The Dino market is hot and shows no signs of cooling. An exciting opportunity to own an iconic 246GT Dino. This deal is on fire!  It’s still (technically) metal and boasts the prized “matching numbers” (ie the body, engine & gearbox are all stamped with the serial numbers which match the factory records) so there’s that but whether, even at the stratospheric prices Dinos often achieve, the economics of a restoration (that may be the wrong word) can be rationalized would need to be calculated by experts.  As with the 365 GTC/4, Gullwing may be amenable to offers but rather that the customer always being right, this one needs "the right customer".

Aggregate demand: The highly regarded auction site Bring-a-Trailer (BAT, their origin being a clearing house for “projects” although most were less challenging than Gullwing’s Dino) publishes auction results (including “reserve not met” no-sales) and the outcomes demonstrate how much the market lusts for Dinos.  BAT also has a lively comments section for each auction and more than once a thread had evolved to discuss the incongruity of the prices achieved by Dinos compared with the rarer Boxer 365 & 512 BB (1973-1984) which was when new much more expensive, much faster and, of course, a genuine twelve cylinder Ferrari.  In such markets however, objective breakdowns of specifications and specific performance are not what decide outcomes: The customer is always right.