Monday, January 14, 2013

Free Markets and the Individual

Last year I told my wife that I wanted a new piece of furniture.

I wanted something two people could recline on at the same time, but that wasn't a giant 'recliner'. My wife suggested a 'chair and a half' with an ottoman. After some shopping and careful sale timing we purchased just such a set up at Haverty's; a reputable furniture retailer in our area.

We tend to be rather frugal in most cases, but we've also learned through experience that you get what you pay for, so in this instance we allowed ourselves a bit of a reasonable splurge. I won't get into exact figures for the set, but the ottoman alone was more than I'd expect to pay for a love seat, or even many couches of decent quality.

But this was us not compromising. This was us getting what we wanted.

So the handsome dark leather chair and a half, with matching ottoman, came home with us.

Fast forward a year and I come home to a disappointing development. It seems that someone stood upon the ottoman while decorating the Christmas tree and broke the frame beneath the foam padding on it's corner. The smart, dark leather was sunken and depressed above the obvious structural compromise below. Naturally I found this highly annoying. None of us are morbidly obese, so I would think that a piece of furniture designed to be kicked about and sat on could support the weight of a standard human while placing ornaments on a tree.

Perhaps something had just slipped out of place? A support of some type fallen out of a joint maybe?

So I turned the ottoman over and removed the thin felt on it's underside, which exposed it's wooden structure. What I saw made me shake my head is disgust.

Yes, the support was cracked in half, but worse was the fact that this rather expensive ottoman from a reputable retailer, was framed almost entirely out of cheap, pressed, oriented strand board. Not solid wood. Not even high quality plywood. The break, which ran right across one of the supports, resembled a broken cookie.

So I went down to Lowe's, bought some 1x4 pine board, some wood glue and some screws, and set about rebuilding my ottoman to the spec it should've been built to in the first place.

After-market, solid pine support. First of four. Screwed and glued.

As I drove the last screw I started contemplating the situation and thinking about the free market.

Champions of the free market expound upon it's virtue as an institution that empowers and benefits the individual. 

"Damn the intrusive, meddling hand of regulation!" they say. 

"Let the individual human spirit soar unhindered by oppressive chains of bureaucracy!" they say. 

"We're all individuals, therefore we all benefit from a system that emphasizes the will of the individual. The only ones who think otherwise are the LAZY PARASITES OF SOCIETY!!!" they say.

The theory is, that a free market regulates itself.

Competition motivates suppliers to minimize cost and be efficient, which in turn minimizes consumer price. The suppliers who produce their product most efficiently can get that product to the market for less, charge less to the consumer than their less efficient competitor and win the battle for market share.

The best business person wins and the consumer wins. The only loser is the business who couldn't compete because they weren't efficient enough, and nobody's crying over them. The strong survive in the free market and the consumer wins as a result.

But what happens when the supplier decides to cut corners and shave a little off the bottom line?

"One of two things will happen," say the free market champions. "If the changes they make do not compromise quality, then they get higher profits. If the changes do compromise quality, the consumer will stop buying their product and opt for their competitor's product instead. That business will be forced to change or it will fail. See? The market corrects itself!"

It all sounds very tidy, and for the most part it is, but how does this scenario apply to me and my broken ottoman?

Remember, I am the individual in this scenario. The free market is supposed to benefit me.

I purchased a branded item from a reputable retailer. All of the information readily available to me indicated that the item was well built. 

I suppose I could have pulled out my box cutter on the furniture store showroom and inspected the frame prior to purchase, but I doubt the retailer would have permitted that. 

I could have called the manufacturer and asked for detailed information about their manufacturing process, but how would they differentiate me from their competition? How likely is it that they would send me blueprints and specs, or discuss the qualifications of their staff? Can you think of any corporations that share that information routinely?

So this product is in my home at a very early stage of it's useful life, and it fails. Upon closer inspection I see that the failure was due to substandard materials and workmanship. If I am beyond the warranty period, if any, what can I do?

I can go public. 

I can write a blog entry about my ottoman that indicts Haverty's and in doing so, warns my fellow consumers to reconsider any purchases they make from that retailer or it's suppliers. That will put the pressure on Haverty's to change and in doing so demonstrate the efficacy of the self regulated market. 

Hooray, right?

But wait!

The free market is supposed to be all about the individual. All of the measures I can take at this point may potentially serve other consumers, and may potentially compel the supplier to change, but how does that help the individual, who in this instance is ME?

The individual is screwed (and glued . . . so to speak, sorry).

It seems to me that the free market, which is supposed to serve the individual at the expense of every other overblown social ideal, actually casts the individual aside in the name of the free market itself. The real person who suffers real loss within this free market construct is not even afforded any remedy for their real time issue. Instead, their loss becomes 'information' that informs and compels people and decisions that follow, but otherwise does nothing for that individual in that moment.

(I can hear the eyes rolling)

"Okay so what would you suggest?" the free market champions shout in disgust. "Bigger government? That's alllllllways the answer right? Why don't we just become a society full of babies that can't do anything without a big government 'Mommy' getting involved in everything we do!?!"

Oh settle down . . .

I am not going to die because of a busted support in an ottoman. I managed to get out of Lowe's for about $13 in supplies, so I do not consider myself downtrodden by any means.

In fact, there simply is not enough vital gravity connected to most products and services out there, to justify governmental interference with their free exchange. I don't want government bureaucrats complicating the process of me hiring someone to mow my lawn, nor do I think it makes sense to have stacks of laws constraining the parameters by which picture frames are manufactured. It's annoying when you pay someone that winds up doing crappy work, and it's annoying when you buy something that turns out to be junk, but in the vast majority of cases, it's not the end of the world.  I'm not writing my congressman about the ottoman, believe me. I'm gonna be okay.

It is not my aim to decry the usefulness of the free market in theory. Rather, my experience with the ottoman demonstrates the fact that the free market, despite it's billing as a boon to the cause of the individual, often works to his or her disadvantage.

While most products and services have no patent connection to life and death, or equal protection under the law, some do.

Healthcare, defense, fire protection and law enforcement are industries that come to mind right away as examples of services that absolutely do have a patent connection to life, death, and equal protection under the law. 

It stands to reason therefore, that those industries should not be left to the indiscriminate forces that push and pull toward market equilibrium, all the while producing countless, hapless, individual victims in the wake of every statistical 'correction'. 

We must insist on the society that we deserve. If we shrug off the suffering of individuals victimized by a market that does not think or care, then we do not care. If we feel obliged to tolerate an economic system that harms us, then we are enslaving ourselves for it's sake.

Why would people who champion the cause of the individual, so completely embrace a system that requires individual sacrifice in the name of a broad, societal economic construct? Sounds downright egalitarian if you ask me.

It also sounds wrong.

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