The Re-Emergence of a Craft-Based Economy

In an article in the *New York Times*, Adam Davidson synthesizes a number of recent events into a larger phenomenon that he calls a “craft-based economy.” He points to Sam Adams beer, Starbucks, Apple, and the various products offered on Etsy as facets of what is apparently called “happiness economics”, which argues that “once people reach some level of comfort, they are willing ā€” even eager ā€” to trade in potential earnings at a lucrative but uninspiring job for less (but comfortable) pay at more satisfying work.” Another dimension of this view is that other individuals within this economy, and presumably enough of the middle class to matter, are willing to be price insensitive on certain consumables.

That is, even in these tight economic times, some individuals are leaving good jobs for jobs that pay them less well, and often require more work, but make them happier, and some consumers are choosing not the commodity version of an item but the one that satisfies some other dimension. Davidson, and I guess happiness economists too, ignores the fact that there are other quantifiable dimensions of a product than its price: e.g., organic produce.

But the larger point is an interesting one, and I like that Davidson included in his examples a micro-manufacturer who saw a niche for precisely-milled metal alloy parts and now has contracts with Boeing and General Electric. There is, as Davidson points out, always the danger that a bigger player will decide that the niche is large enough to be profitable and to displace the smaller player, but this is something of which smaller players, like the fabricators that I study, have long been aware.