Thought experiment

Jon Perlow, over at Jon’s Political Ramblings, has a thought experiment which should give pause to all socialists and interventionists:

Here’s an idea that I think my socialist friends in San Francisco might love.

We’ll have the city of San Francisco open up a chain of restaurants. We’ll make them completely free and the city will pay for them with taxes. We’ll tax wealthy people the most so that the people without much money won’t have to pay any taxes for this service. Since it’s free, it will have the additional benefit of causing most of the profit-seeking restaurants in the city to close down. Even though they may sell better food, it’s hard to compete with something that is free to the customer. But since there’s little competition, the food quality in our public restaurants may suffer or vary too much from neighborhood to neighborhood. The people in the wealthier neighborhoods may try to help their restaurants get better ingredients, but that wouldn’t be fair to people in lower income neighborhoods. To solve this, we’ll create a central bureaucracy that will set food standards across the entire city. Although the overhead of this bureaucracy will cost about 20% of the total cost of the entire operation, it’ll be worth it because we’ll have uniform standards set by professionals who know what is best for us. And it’ll be funded for by taxes from wealthy people who already have too much money.

Some super wealthy people may choose to go to private restaurants, but it will be a tiny minority because few people can afford to pay taxes once for their public restaurants and then pay a second fee to private establishments. Those establishments will be very expensive because they will only cater to the wealthiest and the tiny demand will severely limit competition. Although our leaders will all dine at these elite establishments, they will stand behind the quality and cost of the public restaurants.

Some other people may choose to pay for raw ingredients and eat at home, but we’ll demonize those home-cookers as being anti-social and weird. We’ll wonder why they don’t want to eat with the rest of us? Is our food not good enough for them? It would be too dangerous to let this trend catch on. But it’ll be okay — eventually one of them will screw up and that’s when we’ll pounce. Perhaps, one of them will get food poisoning and we’ll feign outrage. Although the incidence rate of food poisoning is the same at both public and home kitchens, the general population knows that statistics lie. We’ll say we must protect these home-cookers from poisoning themselves and we’ll demand they change their ways and eat like the rest of us.

Hopefully, this model will become so successful that we’ll replicate it to the state level. And then other states will copy it. To ensure that things are fair from state to state, we’ll pass “No eater left behind” legislation to ensure consistent standards. We’ll have to raise more taxes though to fund the Department of Gastronomy.

Of course, no system is perfect. Problems may arise from time to time. For example, the workers at these state-run monopolies may realize they have a lot more leverage than they would in a free marker. Where would people eat if they went on strike? They will negotiate lucrative contracts that guarantee it’s virtually impossible to get fired and everybody will get a fair salary based on seniority instead of based on the quality of their work. After all, how would it be fair to pay Michelle more than David just because Michelle works longer hours.

Some people though may not like the food they are getting. They will demand better from their state government. Some forward-looking free market thinkers may realize that we should give these eaters more choices. We’ll allow a few charter restaurants to be created. They will receive funds from the state and the eaters will get vouchers to dine at these quasi-private establishments. These charter restaurants will be loathed by the public restaurants. The employees of the public restaurants will not like the employment practices at the charter restaurants such as firing waiters who are under-performing or giving some cooks bonuses because their food is better. They will say that these charter restaurants don’t meet the same standards as the public ones and demand that this be fixed to protect eaters. The charter restaurants will be forced to comply with the thousands of pages of regulations created by the public food bureaucracy, but it will be very difficult for them because they don’t have their own giant bureaucracy for ensuring compliance. Some charter restaurants will stay around but only enough to placate the most unhappy eaters and not so many that the overall system is destabilized.

Now, isn’t this so much better than the current model of having those profit-seeking restaurants of varying quality all over the city. Some of them are mom and pop places that go out of business when their customers don’t like their food. How unjust is that!

There are those of you who may think this is a pretty silly idea. But if it works so well for primary and secondary education, why not replicate it to other areas. Hopefully, I’ve convinced the naysayers.