Category Definition in Markets

principle

Supply and scarcity belong to precisely defined categories, not broad labels. A market can have too many credentials and too little demonstrated capability at the same time.

There can be too many qualified programmers and too few people who can program. The apparent contradiction disappears only when “people with degrees” and “people who can write working programs” stop being counted as the same supply.

The denominator decides the diagnosis

A supply-and-demand claim quietly contains a classification decision: what counts as one unit of supply? Broad proxies such as degrees may be easy to count, while the capability buyers need is harder to observe. Treating the proxy as the product creates category reification: a convenient administrative label begins to stand in for a messier reality.

Demand, meanwhile, may be aimed at a narrower outcome—here, working programs. Supply can therefore accumulate in the visible category while the outcome-producing subset remains scarce. Value and bargaining power migrate toward that constrained layer, much as they do under platform commoditization.

Where it shows up

Degrees abundant, working code scarce

The episode distinguishes the supply of degree-holders from the supply of people able to produce working programs. Counting the first answers a credential question; it does not settle the capability question.

Do not discard the proxy too quickly

This principle shows that a broad category can conceal a mismatch; it does not prove that every credential is meaningless or that every apparent shortage is merely definitional. A narrower category is useful only if it tracks the outcome actually demanded, rather than becoming another convenient fiction.

Rewrite the market claim

Tomorrow, take one claim that “there are too many” or “not enough” of something and complete two sentences: “We are counting ___” and “The buyer actually needs ___.” Then choose evidence that tests the second category directly—for programming talent, ask for working code rather than inferring capability from the degree.

Episodes that teach this

The Invisible Supply & Demand in Our Everyday Lives · explained at 10:31 1,470 views
"there is oversupply of people with degrees but under supply of people who can actually write working programs"