In my latest column for AIER I use the supermarket to celebrate the super market. A slice:
Like the typical American, I go to the supermarket a lot. But probably unlike the typical American, every time I go to the supermarket I silently rejoice at my good fortune to be able to frequent this beautiful testimony to the immense productivity of the market economy. Literally, in the past 40-plus years, I’ve never gone into a supermarket without at least once consciously marveling at the economic processes that reliably, yet without ostentation, keep that emporium of affordable material wonders constantly stocked.
Indispensable to the seemingly commonplace modern supermarket is the system of market prices. How do prices work to stock supermarkets? The analogy that I’m about to offer isn’t perfect, but it’s nevertheless instructive.
Think of a supermarket as an anthill. And think of yourself — a customer of that supermarket — as a queen ant. Everyday countless worker ants scurry around the surface of the earth in search of food and other goods to bring to you for your sustenance and convenience.
How do the workers know what to bring? Market prices! Each of the hundreds of millions of individuals who exerted some effort to make possible the bounty that now resides in your favorite supermarket had to be accurately informed about what to do to make his or her contribution, and sufficiently motivated to do it. Just as actual ants follow pheromones to lead them to sources of food to bring back to the colony, entrepreneurs and workers follow market prices to direct their efforts that result in food and other goods being brought to supermarkets. Like each individual ant, no entrepreneur or worker does what he or she does as a self-sacrifice to the group. The ant is programmed by nature to follow pheromones in a way that causes that little creature’s efforts to be coordinated with those of his fellow ants to support a thriving colony that no ant designed and is of such complexity that no ant could possibly comprehend it.
We humans aren’t programmed by nature to do what we do in our roles as producers. But we are programmed by nature to be able, rather reliably, to distinguish courses of action that promote our individual interests from courses of action that don’t.
