The Parable of the Bread Aisle
posted at 1:46 pm on March 16, 2010 by Doctor Zero
What does the bread aisle of your local grocery store look like? Chances are it’s quite large, featuring shelves filled with many different types of bread. Each type of bread is also offered by different companies – you’ll have several brands of wheat or rye bread to choose from. One of these options will probably be the “house brand” of the grocery store itself, and it will likely be cheaper than any of the other brands, particularly for staples such as white and wheat bread.
What purpose is served by having so many types of bread to choose from? We could all survive nicely on wheat bread. Even if we make allowances for taste, and indulge those who prefer other flavors, what’s the point of having all those different brands on the shelf? And why would anyone buy a marquee brand like Wonder Bread or Pepperidge Farms, when the grocery store house brand is cheaper?
And why do we have to pay for bread at all? We need basic foods to survive, far more urgently than we need health insurance. Maybe it would be better if the government took over the bread industry. Think of all the money wasted on packaging and advertising, which could be saved if the State distributed Obama Bread in plain white wrappers that said RYE or WHEAT in simple block lettering. Our wise politicians could then decide if all those different varieties of bread are truly necessary.
If you have studied the history of socialism and communism around the world, you know what the inevitable results of a nationalized bread industry would be: hungry people staring at dusty shelves containing a few expensive loaves of low-quality bread. Humanity has invented few weapons that kill people more efficiently than collectivist agriculture.
Why is this always the tragic outcome of collectivism? After all, government control of goods and services is presented as a way to control costs. The bribes and shady backroom deals perpetrated in the service of ObamaCare are supposed to produce a system that increases “access to health insurance” and make it more “affordable.” The inevitable result will be a system that reduces the quality of care, makes it harder to come by, and increases its overall cost to American citizens.
The same thing has happened across decades and around the world, every single time the State has taken control of a private industry. There’s some grim amusement in watching a supposedly educated man like Paul Krugman make an utter fool of himself trying to pretend otherwise. (“In Britain, the government itself runs the hospitals and employs the doctors. We’ve all heard scare stories about how that works in practice; these stories are false.“)
The reason for the failure of collectivism is revealed in the parable of the bread aisle. Why are there many different flavors of bread? Because people demand them. Why are those flavors provided by different companies, at various price points? Because there is competition to satisfy demand. These factors produce reductions in price, and increases in quality… and the burning truth every statist desperately needs you to forget is that political commandments cannot produce either of these things.
Why couldn’t a nationalized bread industry produce higher quality bread at lower prices? A politician would simply declare bread must be healthy, delicious, and provided to Americans for fifty cents per loaf, paid by a loving government interested in the welfare of its people!
The problem is that politicians cannot redefine value, or repeal the laws of supply and demand. Ironically, given the endless invocation of the term by American liberals, the first thing sacrificed in a state-run industry is diversity. Political allocation of bread would see no logic in offering different brands of bread, or even different flavors… at least, not to the politically powerless average citizen, who would have no way to express his desires by spending money on the bread he prefers. The sole input available to the subjects of a state-run industry is power. If you don’t have any, you take the bread government sees fit to provide, at the time of its choosing.
This doesn’t happen because the masters of a politicized economy are heartless and cruel. One of the most dangerous, enduring illusions of the post-industrial era is the belief that collectivism has only failed in the past because nasty people were in charge of it. The elimination of diversity and choice is an inescapable requirement of command economics. Control cannot be dispersed among millions of consumers, imposing their individual preferences on the system. That’s what capitalism does. When Pepperidge Farms tries to win your business, it caters to your demands, and it can find opportunities for profit in satisfying very specific tastes. If the State provided bread, you would need to adapt your tastes to the requirements of the State.
Reducing costs and increasing quality, to earn profits in a competitive economy, is very difficult. Statists think it’s easy, which is why they believe an enlightened President and Congress can simply command it. Relieved of competitive pressure, the State’s bread-making decisions would be guided by political considerations, at the expense of variety and efficiency. Chances would not be taken on experimental flavors that could result in wasted production, if they don’t catch on with the public. The unhealthy decadence of white bread would likely be sacrificed in the name of reducing health-care costs.
Grain harvests, and the location of bakeries, would be shaped by the political power of local senators and representatives, rather than the painful demands of cost control. This is one of the reasons why government programs always cost more than the original estimates. Those estimates quickly become arbitrary limits, easily discarded when they become difficult to meet. This also makes it easy for politicians to obscure the true costs of their plans, by providing ridiculously low estimates of cost. They know they will not be held to account for those projections later, the way a private business would.
The bread aisle of your grocery store overflows with a variety of fresh, affordable options because that bread is baked in the fires of competition… where a fortune can be made by learning your tastes, and finding an inexpensive way to satisfy them. If you relied upon the government for your bread, you would accept what you were given, and you would be given what politicians think you were willing to accept. They would conceal the massive cost of its inefficient production by telling you it was free. Because this is a lie, you would soon find yourself staring at an empty shelf, remembering the days when you could choose between six different brands of honey wheat bread, while politicians explained why your nostalgia reflects a greedy and selfish desire to return to an impossible age.
Cross-posted at www.doczero.org.