The Locust Economy

Once locusts acquire an informed kind of market mobility through better discovery mechanisms, they can range over a much larger area of wheat fields or restaurants. You can continuously derive savings at the expense of other economic actors wheat farmers or restaurant owners.

via The Locust Economy.

To take coffee shops as an example, an unending supply of idealistic wannabe cafe owners enters the sector every year, operates at a loss for a few years, and exits. The result is that even under normal business conditions, without swarming locust consumers, this is a loss-making business with an extinction rate of around 90% at the 5 year point in the US. Starbucks has the scale to be profitable and resilient. Locust coffee drinkers happily drink the excellent, loss-making coffee from small, local Jeffersonian coffee shops and callously retreat to Starbucks or DIY homebrew if the prices go up.

Starbucks survives, coffee drinking grasshoppers survive, small coffee shops go in and out of business.