You And Arabian Horse Economics: The Socioeconomic Short Course
by Dick Adams
To most of us, the word “economics” has a very compelling intimidation to it. It suggests a host of bureaucratic and political equations and accounting situations, all directly affecting our well-being, yet out of our control. While on a daily basis, we deal personally with the economics of life in our communal society, Arabian Horse “economics” are actually much more complex. Complex, but no magic or special scoping science to it, just pragmatic reality; the reality of making the right choices.
Arabian Horse economics are controlled by both broadly generalized and clearly specific socioeconomic segmentations. To understand how both the general and specific segmentations interact and relate to your program’s personal goals and positive development is the key. All this will take is an appropriate and logical approach based on certain understandable social and economic principles: socioeconomics.
So, What Is Socioeconomics?
While economics is the study and analysis of the processes governing the production, distribution and consumption of goods and services, socioeconomics is a disciplined “science” that studies and explains how economic activity affects and is affected and formed by social influences and processes. Simply put, socioeconomics analyzes how societies fluctuate (progress, stagnate and regress) because of the expression of local, regional and/or global influences. The effects and affects of social interaction; cause and causation.
And excellent examples of socioeconomic patterns are clearly displayed within the international Arabian horse community. Few “products” are so influenced in such a diverse global behavior of emotionally influenced economics. To understand this is to prosper.
Functional Arabian horse socioeconomics is the pragmatic reality of understanding and dealing with the challenges, issues and problems that exist in our integrated national and international associations with the Arabian horse. Understanding and dealing in a thoughtful, reasonable and logically analytical way. It is a process of understanding the interaction between the product within (and the product of) an established and superseding socioeconomic environment. It is the understanding of the product that has internal marketability within its domain, and credible potential outside of its domain. Therefore, it can be analyzed diligently to develop intrinsic product value and product potentials.
So, Arabian horse socioeconomics must be understood as the concept of interaction between an inclusively established society (such as the international Arabian horse community) and how a specific colloquial entity or event within that society can influence an economic fluctuation affecting that society. Results from the Scottsdale, Las Vegas, U.S. Egyptian Event, U.S. Nationals and Paris shows, would be examples of event results both positively and negatively influencing the global Arabian horse community and its social balance.
Also, within Arabian horse socioeconomics, we find that relative to the global breeding in-hand (Halter) “community”, the distribution of discretionary spending has become much more unequal. The Arabian horse patrons’ income inequality has become a strong deterrent to competition and breeding involvement. Just how does the breeder and/or competitor with limited means compete with the unrestricted assets and developable politics of many global breeders? The answer is clear, produce the best!
From The Broadest Approach
The year 2015 marks the sixth anniversary of the announcement of the end of the recent recession (2009) and the beginning of the “economic recovery.” While the U.S. Government declares a progressive recovery, the adjusted median household income (MHI) as indicated by the February 2015 MHI of $54,510 was 0.9 percent lower than the median of $54,992 in June 2009, the end of the recent recession and beginning of this “economic recovery” period. The U.S. Census Bureau published report (February 2015) stated that the inflation adjusted median household income was $54,510; as compared to $53,093 in February of 2014. Statistically, not much of a notable improvement ($1417/2.6%), but when we look at the 2015 median income, compared to the 2007 numbers of $56,436 (the year prior to the entrance of the latest recession), we see a 3.5 percent decline. This being significant as it indicates a sluggish and almost stagnant exit from recessionary conditions. The real median household income averaged $50,781 from 1964 to $54,510 in early 2015, ranging from a low of $43,558 in 1967 to a high of $56,895 in 1999.
Unfortunately, to make things more difficult, since the recession ended, consumer prices have increased by 9.5 percent, indicating a significant financial “headwind” relative to any changes in median annual household income. So, while the costs of producing the solvent Arabian horse product continues to rise, neither the general economics of the producer nor the general value of the product have. The cost-of-living index has shown a continued rise in the amount that consumers need to spend to reach a certain level or standard of functional quality. The cost-of-living index would reflect changes in the prices of specific horse related goods and services, such as feed, bedding and vender services that are directly purchased in the marketplace. But, a complete cost-of-living index would go beyond this to, also take into account changes in other governmental, regulatory or environmental factors that affect the horse owner’s well-being.
This is a socioeconomic dilemma for the Arabian horse “business!”
So, while the general economy was thriving to a prosperous peak in the fifteen year span of prime developmental years (1986 through 1999), the Arabian Horse “economy” was tanking.
Yet, contrary to their Arabian horse involvements, during the period between the late 1980s and through the 1990s, we saw many investors show a sharp contrast within their individual/personal economic mobility (ability to raise or lower their economic status). While their “real” professions were thriving, their horse “businesses” were deteriorating. The problem this created was that many horse “businesses” were provided false socioeconomic status in the form of a self-subsidized life support that only prolonged an often negative existence. While, in the “real” business world, the duration from start-up to failure of the majority of small business was two to three years, the average small Arabian horse “business” refused to throw in the towel. For many, this went on for a decade or more. Some Arabian Horse Domain analysts would argue that many of the “die-hards” were more recreational hobbyist than businesses. My argument with this approach would be the fact that many incorporated and declared their horse entities as a tax advantaged business with the Internal Revenue Service (IRS), with the clear intent to profit and prosper.
Another aspect of socioeconomics is “socioeconomic status (SES).” A socioeconomic status is the measure of the economic and sociological combined total of a person’s or entity’s work experience and of an individual’s or entity’s economic and social position in relation to others. And, yes, “politics” could be described as both a positive and negative component affecter.
To Begin With
The Arabian horse “community” covers the complete spectrum of status. Most members of the Arabian horse community would rather (simply) deal with fitting into their personal and individual relationship with the Arabian horse. They are not interested in the arduous task of aggressively attaining and maintaining a higher level of economic success. They simply love their Arabian horse(s)!
Unfortunately, for many, the primary reason for this self regard is the overriding effect that the general economy has on the average Arabian horse “lover’s” ability to sustain an economic “lifestyle” that will allow them to finance a more desirable ownership involvement. Take my word for it, less than desirable economics is the prime reason for the decline in breeding and showing. It even has a clear effect on the most simplistic ability of just owning an Arabian horse. So, while the desire to own, breed and show an Arabian horse might be strong, often it is not strong enough to over-ride the good judgment to not over extend your finances. That is the premier dilemma affecting Arabian horse “economics” in a nutshell!
Therefore, we must understand the socioeconomic status (SES) of the aspect of the Arabian horse community that we, as individuals, want to be involved with.
But, Let’s Go Further Than That
Let’s look at “economics” and how it relates to the future of the Arabian horse, and how it will affect your program.
Economics simply defined, is a quantitative social science designed to analyze the production, distribution and consumption of products and vendor services.
One of the practical focuses relative to Arabian horse economics is developing a clear understanding on how economic agents perform. An economic agent can be a specific person (industry expert or faux-expert), company (both positive and negative breeding/training entities), or organization (progressive or dysfunctional breed associations/societies) that has an influence on the Arabian horse economy by producing, promoting, buying or selling product or service. It is necessary to understand how economic agents interact with the domain, and how they affect the qualitative performance of that domain. This is the actual analysis of the statistical/quantitative research product and how understanding actual data/facts will create successful qualitative strategy.
Let’s Start Here
You can NOT save your way to prosperity!
Usually, when a business begins to feel economic pressure, its first reaction is, naturally, to cut expenses. Sure, this can accomplish an almost immediate form of financial relief in the form of less expenditure. The problem with this is that this method does not provide any relative infrastructural improvement. The entity’s underlying framework does not improve. What it actually does is restrict improvements; many that could have increased revenue producing capabilities and potential. So, while you feel the relief of less “out of pocket” expenses, you will, also, feel much less “into pocket” revenues. Nothing gets better to the noticeable point of improving your future. In fact, as the benefits of reduced promotion and/or quality production decline, so will your ability to sustain even your disappointing former quality.
Therefore, while “You can NOT save your way to prosperity,” you CAN wisely RESTRUCTURE!
This can be done by aggressively and quickly eliminating or down-sizing your liabilities. Even the best managed programs have liabilities. The difference is that the better the program, the stronger the economics; allowing for the liability to be carried. Stop your economic nonsense!
So, how do you identify your liabilities? Everything, has qualities and, therefore, everything has an analytical and diagnostic capability. Understanding the methods of evaluation (to their most definable logic) will both identify positive/valuable qualities that might be hidden to your subjective eye, and negative/valueless characters that support a liability.
I use the serious process of “triage” to determine the priority of value the evaluated has to the entity. This analytical approach will categorize and prioritize each horse, each employee, each product and each expenditure, creating a “programmed” approach with much more effectiveness and efficiency.
So, put more thought into your personal Arabian Horse Economics and start thinking socioeconomics! The payoff will be both positive and motivating.