Gresham's law: why bad marketing drives out good

March 31, 2023

Gresham’s law in economics is: “bad money drives out good.”

Back when "money" meant gold and silver coins, if the king could mint, say, 90% pure coins and keep the 10% of the gold for themselves. But in that case, people would stop using old coins. Nobody wants to trade the pure thing for an impure thing.

In 1970, George Akerlof came up with a modernized, similar concept: "the market for lemons". He showed that if the quality of a good was highly variable and difficult to measure (used cars, at the time), the market would collapse.

Akerlof went on to win the Nobel Prize for his work. Also to marry Janet Yellen, now the US Treasury Secretary.

Don't fight over well-tread ground.

The average US software engineer's time is worth $200/hr. The time of an underemployed college grad trying their hand at SEO is worth $20 / hr. The time of a content farm worker in Eastern Europe or India is worth $2/hr.

So unless you have an incredibly compelling angle (programmatic content generation, say, or a product you created) it's foolish to compete at marketing with any topic that is legible (travel, hotels, flights, clothing, etc).

Stick to topics that aren't legible, or that you are an expert on. Like software.