Cans of corn

In the comments to this post, we had what I thought was a good discussion regarding fairness and how government interference usually causes unfairness rather than fixes it.

Wally asked if unfair processes exist outside government. I responded that they do but that there are better feedbacks and choice outside of government to help with that.

Don Boudreaux just wrote a fantastic column, Competitive regulation, in the Pittsburgh Tribune addressing how much better feedbacks and choices, which derive from competition, work in a free market work than the regulations from government.

I particularly love this part:

No one asserts that competitive regulation works perfectly. But perfection isn’t the appropriate standard. The claim, rather, is that competitive regulation works pretty darn well.

Want evidence? Go to the supermarket and then to the mall. You’ll find astonishingly wide offerings of high-quality and affordable goods: food and drink products, detergents, kitchenware, clothing, furniture, consumer electronics and on and on and on. You’ll also find stores manned by clerks and managers who generally would be distraught to lose their jobs.

Nearly none of what you see is the result of government regulation. No regulator ordered Safeway into business. And no regulator tells it what to offer for sale. If Safeway wished, it could — as far as the government is concerned — stock only cans of corn and nothing else. It could refuse to pay any of its workers wages higher than the legislated minimum. It could open for only 15 minutes daily. It could use pencils and paper, rather than electronic scanners or cash registers, to tally its customers’ grocery bills.

But it does none of these things. Competing with Kroger, Wal-Mart and other supermarkets, Safeway voluntarily chooses — for its shareholders’ own good — to spend tens of millions of dollars annually to keep its shelves stocked with a vast assortment of items, to pay most of its employees wages well above the legislated minimum, and to undertake all the other countless activities that it must undertake to turn a profit.

I continually find it amazing how much a part of life these feedbacks and choices are and how little people recognize it.

People simply don’t recognize that free market and competition provides them with so many choices. How often do we complain about not getting what we want with stuff that comes to us by way of generally free markets like restaurants, shoes or deodorants? How often do we complain about things from government?

Sure, there are complaints about products. As Boudreaux says, no one says the market is perfect. But, there are entire TV and radio channels dedicated to complaining about government.

The same people go to Target and to the DMV. I can’t figure out why they never seem to think “I want more of what brought me Target and less of what brought me the DMV”.

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8 thoughts on “Cans of corn

  1. “…in the long run the aggregate of decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is less likely to do harm than the centralized decisions of a government; and certainly the harm is likely to be counteracted faster.”
    — John Cowperthwaite, Hong Kong financial secretary, 1961-1971

    • Good quote! Engineers try to avoid designing systems with a single point of failure. Some of the guys who wrote the Constitution tried to avoid that in government, too. It’s a good lesson. All humanity is fallible, that includes politicians. Good intentions do not make for perfection. Best to always assume that someone can be wrong and have some backups.

  2. What other feedback mechanisms (if any) besides profit/loss and the electoral process are present and valuable in our society?

    • Good question, Wally. There are many, more than I can identify.

      Within our closer units — families, friends, work mates, organizations — the feedbacks are generally non-monetary. Shame and reciprocation are important feedbacks in these units. As in, when you do something that is unacceptable within your group, like violate someone’s trust, you might be shamed by the other members of the group. If you do something nice for someone else, like help them move, they may return the favor someday.

      These types of feedbacks play roles in larger society as well. One important feedback in society is shame and it has been distorted. I wrote about that here:
      http://ourdinnertable.wordpress.com/2012/08/31/shameless-society/
      http://ourdinnertable.wordpress.com/2012/09/12/shameless-society-part-2/

      It use to be shameful for the able-bodied to accept, let alone expect, help from others. You were expected to carry your own weight so that the help could be directed to the truly needed.

      Now, it’s more shameful to hold a politically incorrect, but truthful or logical, view than it is to get help because you didn’t save for a rainy day.

      Admiration is the flip-side to shame. Do you have any other feedbacks in mind?

      • Shame and admiration… those are good ones.

        Do you think fame/infamy are fundamentally different from shame and admiration or are they simply bigger scale versions that get used in the public square?

        • I’m not sure those effect society as a whole, as much — except for noise and entertainment. I’m not sure I’d say they’re the same thing.

          But, certainly, the old saying that different rules apply to famous folks, I believe is correct. Those rules are the social norms and consequences of feedbacks.

          I always thought Michael Jackson’s death was a feedback problem. Nobody wanted to tell the King that he was crazy. Or maybe he shut those people out. Lots of famous and infamous folks have similar issues.

          The ones that stay grounded seem to have a) a good self awareness that doesn’t shut out feedback and b) seem to want to have people in their lives that call out their bs.

          If I were on the Board of Directors, when I hired a manager, I’d ask about the applicants court jesters.

    • Prices are also important feedbacks. While they feed into the profit and loss feedback, they effortlessly convey a lot information that helps us decide how to spend our time and with what. They also encourage people who do not know us or care about us — and may not even like us if they were to meet us — to do amazing things for us.

    • The size clothes you have to buy also provides some feedback, but many folks seem proud of the their double X L status.

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