Monday, January 28, 2013

Free Markets, or Are You Serious?

    Faustino Ballve wrote this nifty little book Essentials of Economics in the mid 50's. Ballve, saw the coming problem that plagues us today:  Privatizing reward while assigning risk to the taxpayer.   An excellent example of the principle can be read here As Stadiums Vanish, Their Debts Live On.  It sums up the problem nicely.
     Consequently, I could not help but get excited when I saw the sign pictured above.  "Fresh Sushi" at Walgreens (it was snowing the morning I took the picture FYI).  My poor wife; married to someone that gets excited by a sign.
      Nonetheless.  If you love free markets you have got to love this.  First, let me state emphatically, I would never buy Sushi, fresh or stale, at Walgreens.  Are they serious, Sushi at Walgreens?
     But the fact that I find it nonsensical means nothing, other than I will not be spending my money there for fresh fish.  However, there maybe those that will.  It is entirely possible that there will be individuals that find the idea, for whatever reason, fits their personal need.  There is no way to tell if an idea will work, until it tried.  Who should take the risk?
     Somebody, in some department at Walgreens came up with this idea and convinced enough people within the corporation to give it a go.  Who benefits if the idea is successful?  Two groups:  those who consume the product and those who provide it.  Markets always work.
     Now contrast this with:  Mr. Politician, if you build me a sports arena by issuing special use bonds backed by a 1% sales tax, hotel tax, tourism tax blah blah blah....., under our current models, which in no way can account for tastes, trends, consumer patterns, economic conditions, civil unrest, foreign military coups......  blah blah blah my sports team will generate enough economic activity blah blah blah to pay back the bond holders blah blah blah..... the value of my franchise will go up, I will employ lots of people blah blah blah and you Mr. Politician can say how you saved the city from eminent collapse because I will move my franchise if you don't blah blah blah.  I think you get the picture.
     The ultimate business arrangement.  I gamble with your money and I keep the winnings you take the loss. You know you are screwed when business spends more time lobbying politicians to create a market by political fiat, than convincing consumers to consume the product. 
     Who knows, I might try the Sushi at Walgreens just support the free market principle. 
     

     

      
     

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