Why Would People Vote for Empty Supermarket Shelves?
"If a nation expects to be ignorant & free, in a state of civilisation, it expects what never was & never will be.”
If elected, Kamala Harris will order "the first-ever federal ban on price gouging on food and groceries—setting clear rules of the road to make clear that big corporations can't unfairly exploit consumers to run up excessive corporate profits on food and groceries." Federal Trade Commission bureaucrats will be the enforcers.
One can speculate whether Harris lacks economic literacy or cynically uses this as a political strategy. We should be deeply troubled that both possibilities can be true.
In the past few years, I have listened to some family members, and neighbors rail against prices in supermarkets. Most of those who have expressed these bitter complaints look at me blankly when I explain that inflation is a monetary phenomenon. They do not know that supermarkets profits are an astonishingly low 1.2%. They want to be angry at the stores, and Harris cynically taps into their ignorance.
Even though I live in a rural area, two major supermarkets, located on opposite sides of a highway, are engaged in intense price competition. Yet, prices have risen significantly due to reckless government spending and expansionary monetary policy under Biden and Harris.
Michigan’s Governor Gretchen Whitmer defended Harris saying, “Any effort we make to keep more money in American’s pockets is worth walking the path.” Of course, cutting reckless government spending is not one of the “efforts” Harris is considering. Any policy that disrupts the food supply chain will increase—not lower—prices. Whitmer and Harris are counting economically illiterate voters.
If price controls on food are implemented, there will be shortages. Even amid empty supermarket shelves and other economic consequences, angry voters who already distrust businesses will continue to believe the politicians. The public will demand action, and Harris will exploit any food crisis she causes to increase her power.
Visualize a legion of bureaucrats evaluating the dynamic pricing in supermarkets. When Harris made her policy announcement, she called it “price gauging.” She had it right; no food provider is gouging. Trying to do the impossible, bureaucrats will be “gauging” what price is right.
Intellectual apologists are necessary for politicians. A generation ago, finding an academic economist supporting price controls would have been nearly impossible. Not so today.
Weber is an economics professor at the University of Massachusetts. Politicians like Senator Elizabeth Warren, who played a role in causing inflation, have naturally embraced her nonsensical ideas about greedflation.
In the former Soviet Union, apologists like Weber had access to special stores while the rest of the population waited in long food lines.
Imagine what will happen as more students progress through an educational system that teaches ideas counter to humanity's flourishing. The mistaken beliefs of supporters of socialism must be exposed and debunked.
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It's alarming how much our understanding has declined. The experiences of those who suffered under communism in the Soviet Union must not be forgotten. We must examine foundational ideas, grounded in theory and historical evidence, that can aid in avoiding the worst outcomes. Jefferson was right when he wrote, “if a nation expects to be ignorant & free, in a state of civilisation, it expects what never was & never will be.”
In the 1980s, a wave of expatriates fled the Soviet Union for the United States. Many of them had host families to help them acclimate to American life. I heard about these first encounters with America’s commercial abundance from some hosts.
When they first saw the bounty displayed in our supermarkets, the émigrés either froze at the endless array of choices in front of them or wildly loaded their carts because they assumed the shelves would be empty the next day.
These émigrés could only understand what they saw within the context of their current belief system in central planning. Many may have initially thought that the United States had unbelievably effective five-year plans. What else could explain so much plenty? They were dumbfounded when told that no government official directed where a supermarket should open, what it should stock, from whom it should buy goods, or the hours it should be open.
In the Soviet Union, when food ended up on the kitchen table, it resulted from command and control. Given their experience, the idea that order could emerge without central planning seemed unfathomable.
Consider this thought experiment. It is 1980 in Moscow. Someone says at a planning bureau meeting, “Comrades, we need less planning, not more. If we give up controls and establish property rights, the free market will stock our markets with plenty at prices cheaper than we could imagine. We just have to get out of the way.”
Imagine the replies if others engaged him in thoughtful discourse: “Comrade, you propose a fantasy. Who would order the farmers what to plant and how much to plant? Who would arrange for food pickers?” (Food often rotted in Soviet fields for lack of pickers.) “Who would arrange for transportation? And then our problems are just beginning. Who would arrange for distribution? How would we know how much bread and sausage to make?”
The only possible response would have been this: “We don’t need to answer those questions. The free-market system will generate answers to all those questions without our input. Further, in a free market, decisions will be updated continuously, according to what our country needs at the moment.”
Of course, this is a fantasy. In the Soviet Union, the stubborn problem of food shortages was created by a belief that control was needed; they had no ability to look at food scarcity from outside the belief system that was creating the problem. If effort produced little results, more effort, more planning, control, manipulation, and coercion seemed to be needed. They may have reasoned that better data, better interpretations of the data, better transmission of orders, and more compliance with orders would improve food distribution.
Do we want to experience this in the United States? Do we want to experience the nightmare of empty food shelves and nonsensical explanations for our suffering from the media and politicians?
Einstein pointedly described the impossibility of trying to solve intractable problems within our current belief system: “The world we have made, as a result of the level of thinking we have done so far, creates problems we cannot solve at the same level at which we created them.”
Of course, in the United States, we have not escaped the all-too-human error that Einstein described. For example, much has been written about problems in our public school system. Proposed solutions remain firmly within the realm of commonly accepted beliefs, taking familiar forms of spending more money or ensuring the delivery of a common-core curriculum.
Inside the current belief system, proposals to break the monopoly by increasing choices are met with the same resistance as a proposal to break state-sponsored food distribution in the former Soviet Union.
What beliefs do we have about the source of order that causes us to rely so heavily on planning and controlling?
In his essay “Cosmos and Taxis” in volume 1 of Law Legislation and Liberty, F.A. Hayek points us in a direction we may not have considered. Order, Hayek explains, can be a spontaneous phenomenon beyond the control of anyone or any group of people.
Order, generated in a marketplace that no one controls, produces abundance. Looking into our own market baskets, we cannot know and do not need to know all of the farmers and food specialists whose cooperation contributes to our meals. Spontaneous order has a “degree of complexity,” Hayek instructs, that “is not limited to what the human mind can master.”
Just as importantly, spontaneous orders do not emerge to serve any one purpose. In Hayek’s words, spontaneous order supports “our successful pursuit of a great variety of different purposes.” Each of us is free to enjoy our favorite entree, paleo to vegan, and the marketplace will provide us with the ingredients needed to make those choices.
Believing in the possibility of spontaneous order provides an essential lens if we are going to interpret that which is beyond the power of our mind to fully comprehend. Einstein famously said, “Whether you can observe a thing or not depends on the theory which you use. It is the theory which decides what can be observed.”
Do we believe in something bigger than the limits of our mind and thinking?
Most of us are comfortable with the tangible — that which we can see and manipulate. To be comfortable with economic freedom, we need to understand that solutions to our problems emerge from the spontaneous cooperation of many individuals making their independent decisions but having no knowledge of the network of exchanges of which they are a small part.
Those with no understanding of spontaneous order often become what Hayek in “Cosmos and Taxis” called “indignant reformers” who complain about “the chaos of economic affairs.”
What best guides human cooperation to best satisfy human needs? In the Soviet Union, no mechanism was available other than the heavy hand of the state. Progressives in our country are marching us down that same path. Believing in spontaneous order is the other path. All the evidence you need to make the best choice is on your kitchen table.
Portions of this essay initially appeared at the Foundation for Economic Education.
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As Aldous Huxley observed in Brave New World Revisited: “Non-stop distractions of the most fascinating nature are deliberately used as instruments of policy, for the purpose of preventing people from paying too much attention to the realities of the social and political situation… Only the vigilant can maintain their liberties, and only those who are constantly and intellectually ‘on-point’ can hope to govern themselves effectively by democratic procedures.” AND:
As Murray N. Rothbard wrote in Anatomy of the State: “The greatest danger to the State is independent intellectual criticism; there is no better way to stifle that criticism than to attack any isolated voice, any raiser of new doubts, as a profane violator of the wisdom of his ancestors. Another potent ideological force is to deprecate the individual and exalt the collectivity of society. For since any given rule implies majority acceptance, any ideological danger to that rule can only start from one or a few independently thinking individuals. The new idea, much less the new critical idea, must begin as a small minority opinion; therefore, the State must nip the view in the bud by ridiculing any view that defies the opinions of the mass. “Listen only to your brothers” or “adjust to society” thus become ideological weapons for crushing individual dissent. By such measures, the masses will never learn of the nonexistence of the Emperor’s clothes.” AND:
“When you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors—when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed.”
Ayn Rand; Atlas Shrugged, 1957
Professor Brownstein, this is excellent content. FYI: I will be forwarding this Substack to others forthwith. Warmest regards Professor Brownstein.