If Supermarkets Were Like Public Schools

A great analogy by economist Don Boudreaux:

Suppose that groceries were supplied in the same way as K-12 education. Residents of each county would pay taxes on their properties. Nearly half of those tax revenues would then be spent by government officials to build and operate supermarkets. Each family would be assigned to a particular supermarket according to its home address. And each family would get its weekly allotment of groceries—”for free”—from its neighborhood public supermarket.

No family would be permitted to get groceries from a public supermarket outside of its district. Fortunately, though, thanks to a Supreme Court decision, families would be free to shop at private supermarkets that charge directly for the groceries they offer. Private-supermarket families, however, would receive no reductions in their property taxes.

Of course, the quality of public supermarkets would play a major role in families’ choices about where to live. Real-estate agents and chambers of commerce in prosperous neighborhoods would brag about the high quality of public supermarkets to which families in their cities and towns are assigned.

Being largely protected from consumer choice, almost all public supermarkets would be worse than private ones. In poor counties the quality of public supermarkets would be downright abysmal. Poor people—entitled in principle to excellent supermarkets—would in fact suffer unusually poor supermarket quality.

How could it be otherwise? Public supermarkets would have captive customers and revenues supplied not by customers but by the government. Of course they wouldn’t organize themselves efficiently to meet customers’ demands.

Responding to these failures, thoughtful souls would call for “supermarket choice” fueled by vouchers or tax credits. Those calls would be vigorously opposed by public-supermarket administrators and workers.

Opponents of supermarket choice would accuse its proponents of demonizing supermarket workers (who, after all, have no control over their customers’ poor eating habits at home). Advocates of choice would also be accused of trying to deny ordinary families the food needed for survival. Such choice, it would be alleged, would drain precious resources from public supermarkets whose poor performance testifies to their overwhelming need for more public funds.

As for the handful of radicals who call for total separation of supermarket and state—well, they would be criticized by almost everyone as antisocial devils indifferent to the starvation that would haunt the land if the provision of groceries were governed exclusively by private market forces.

32 Responses to “If Supermarkets Were Like Public Schools”

  • Supermarket choice means that the supermarket can refuse to serve the disabled. Since they don’t have to cater to the disabled they can save money on handicap access. So their prices can be lower. So they attract the most fortunate. Nobody wants to cater to the disabled because designing a supermarket that allows access for them is more costly. So now since nobody wants to cater to that market everyone refuses them entry. So they starve.

    Not saying school choice is terrible, but one thing you can say about the public schools is that they do in fact educate everybody, even the hard cases. They don’t refuse the hard cases. School choicers say “Look at the performance of the charter schools. So much better than public schools.” But charter schools don’t have to provide handicap access or they can refuse to educate a child with dead beat parents that doesn’t perform as well, which would affect the performance appearance. If mom is single and a drug user the charter school just shuffles that child out the door. The public school spends the extra resources to give that child a chance. Might be less efficient. Might be more efficient to just tell that kid that he gets nothing. But is that what we want to do?

  • Hey Jon,

    But the same can be said of government schools: they can treat the poor and disabled as shitty as they want. The poor in any political system have little to no power. And because of such, they get shitty services. Look at government funded medicare vs medicaid. In an ideal world, medicaid should get the preferences, the extra funding, and the priority. After all, they are, by definition the “poor” ones. But instead it’s medicare. It’s the elderly. Rich or poor. In other words, Warren Buffett’s medicare payments will be better than the poor single mother trying to get through life.

    Why? Politics. The elderly vote. The poor much less so. In other words, sure, on paper government is supposed to provide more equality. But reality is far far different. If you want to see the shittiest schools around, go to the ghetto and try walking through the classrooms. You will see what a government monopoly is like.

    So going back to your original point, you write: “Supermarket choice means that the supermarket can refuse to serve the disabled”. You are right, the supermarket can refuse service to the disabled. But that means lost revenue. In other words, atleast in the free market there is an incentive to provide services to those who pay, and if you refuse to do so, you lose money (and market share, which in the long term can bankrupt you)…that incentive may not be as large as you want it to be – but then, compare it to the incentive that government has.

    What happens to public schools that do a shitty job? What is their incentive to do any better?

  • That’s just not true. They can’t treat the poor and disabled as shitty as they want. Why would you say that? Government regulations demand that they treat the disabled well. The difficult kids are the kids that consume the bulk of the resources. The public school doesn’t have the option of shuttling them out the door or treating them badly.

    You’re wrong about the incentive to serve those that pay because a poor or disabled boy probably can’t pay any more than a normal kid. Let’s say they both have $10K to spend on schooling. Schooling the disabled kid will cost $50K and he doesn’t have it, so you just refuse him.

    Sure, if he is a lottery winner he’s looking great in a free market system but the chances of that are not good.

  • Jon,

    I say that based on experience. I have lived in the ghetto. Public schools suck. I can’t see it getting any worse. And I have a child who has a serious disability. I’ve dealt with the public schools on this issue. It’s a nightmare. Most of the time you have to get lawyers to force the public schools to help – something only the rich can do. There are even charity organizations based just on this service (see here – I’ve worked with them, they say nearly half their staff are lawyers of which they meet with on a weekly basis).

    But please answer my question: What happens to public schools that do a shitty job? What is their incentive to do any better? I want a real world answer. A check in the system that you actually find forceful enough to do some damage.

    Now compare that to the private sector, where I wrote: atleast in the free market there is an incentive to provide services to those who pay, and if you refuse to do so, you lose money (and market share, which in the long term can bankrupt you)…that incentive may not be as large as you want it to be – but then, compare it to the incentive that government has.

  • The check on a public school is government regulation. The schools should be subjected to democratic reform. That’s different from a for profit school. The check on the for profit school is profit maximization. That which is more profitable thrives. It’s profitable to kick the disabled to the curb. Just don’t do anything for them.

    It’s not that public oversight always works with schools. There are going to be abuses. But the alternative is that the dollar is the check. Those with the most dollars provide the greatest checks. They check it in a way that serves their interest and leaves others out in the cold.

  • Jon writes, The check on a public school is government regulation. The schools should be subjected to democratic reform.

    Sure, in theory. But do you think this works in practice? Keep in mind the voting rate and political influence of the poor. In the real world, does this work in practice?

    Now contrast that with the private sector incentive: personal interest and an incentive to avoid possible bankruptcy. Which one do you think is stronger?

    Let me ask you another question: Do you think the world would be a better place if the government also ran supermarkets?

  • A for profit school is going to be less responsive to the poor than a democratic school. Democracy has produced handicap access. All the handicap parking spaces? Businesses aren’t doing that because it’s profitable. They do it because the government requires it.

    I’m not actually arguing here that I oppose for profit schools. I suppose I would if I studied it more, but I haven’t looked into it a lot, so I’m open minded. For profit can be better. The point is there’s a down side.

  • Sure, there is a downside in theory. I am asking for a downside in reality.

    Beside: remember, nobody here is arguing for a TOTAL separation of state and education. I am all in favor of the state paying for the education. I am just against the state performing the education. In other words, I am in favor of a “give people food stamps and let the market provide the groceries” type of structure.

    So sure, in my ideal world, the handicap and disabled would get a bigger voucher. Nothing anti-capitalist about that. Shoot, it was Milton Friedman himself who first popularized the idea.

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