Capitalism is amazing. And by capitalism I mean free people associating with other free people in order to produce and consume goods and services. The other day I bought a ceiling fan from Home Depot. I love Home Depot.
As I walked into the store with my very specific purchase in mind, I noticed a pallet of various bags of mulch and soil. The whole pallet was reduced to a few dollars. I noticed the products were imperfect. The bags had holes torn in them, some product had spilled out, or had they had some other deficiency. This is one of the amazing parts of capitalism: imperfect products are either completely thrown out (like rotten or imperfect food in a grocery store) or sold at extremely reduced prices. Why does this happen? It happens because you, the consumer, want and demand a perfect product. And because you, the individual making your own decisions influencing the decisions of the capitalist, get to be in charge.
So I pass on the great bargain because my decisions are influenced, in (large) part, by my beautiful wife. I am to buy a ceiling fan, not a pallet of dirt. So I continue on to the lighting and ceiling fan section where I am greeted by a Home Depot employee (trying to force me to buy stuff I might not want, some may think). He asks me what I am looking for and how he can help. We talk for a bit and after reviewing a few products, I choose a nice fan, thank the employee, and purchase the item at the checkout. As I leave the store, I notice someone complaining at the front desk and watch as the service counter employee tries to make the customer happy. Everything in the store is geared to you and me, the consumers. We are in charge and Home Depot is trying to keep up.
To no one’s surprise (especially my beautiful wife), I ended up breaking the glass globe that came with the ceiling fan. I am very upset because it was my fault but also because it was an expensive fan. So I did want any dishonest consumer would do: I went back to Home Depot and told them I had opened up the box and found the globe already broken. Can you believe the Home Depot employees pretended to believe my lie and replaced the globe for free? Now I know that I, the consumer, is in charge and I will have to do five hail Mary’s (for my lie).
This is the amazing part of capitalism: It is mass production for the masses, as Ludwig von Mises said, and the consumers are in charge. At retailers around the country, people are demanding near perfect service and perfect products while at the same time admonishing the greedy retail owners and their dirty tricks to get you to buy stuff. It is ironic that the very people who provide the services and products demanded are chastised for their efforts. And to pile it on, only those who are good at providing the perfect goods and services have stores that are still open – so the best people at giving the consumer what they want are so easily and readily criticized for their efforts.
Now, let us imagine a similar situation. Imagine there is a counter, much like the returns counter at Home Depot, but this counter is at the Department of Motor Vehicles. When you went in, no one greeted you at the door trying to push their wares upon you. In fact, the only thing that greeted you was a red ticket machine which had a little piece of paper sticking out that had the number “82” on it. As you pull the number out of the machine, you hear over the intercom, “Number 5”.
So what do you do? Do you storm up to the front desk and demand to see the manager? Can you go to the local DMV competitor? Do you expect to be compensated for the poor service you are FORCED to endure or the substantial amount of time lost? Most people do not because I have been to the DMV. Most people, including myself, try not to make those “civil servants” any more irritated than they already seem lest we get delayed even longer. Why do we feel justified in our public outrage at the local store but we hesitate and refrain from doing the same to the DMV or even the TSA? The irony to all this is that the DMV is supposed to work for you, the taxpaying citizen, and Home Depot is supposed to be just a profit seeking corporation that does not care about you, only your money, but a comparison of the two feels quite the opposite.
So what causes these differences in service? The institutions and the driving factors behind them, I submit, are what cause the differences. On the one hand you have the Home Depot Corporation driven by market forces and on the other you have the State which is driven by politics and force. Capitalism is controlled by free market economic forces and the consumer is boss. The State controls through force or threat of force and the State is boss. So why is Capitalism so amazing? Because everyone who participates in the buying and selling of goods becomes the bosses of their own societies through voluntary interactions where both producer and consumer benefit. The further we stray from Capitalism the closer we get to placing the State above ourselves as our economy’s boss, and the consumer becomes secondary to bureaucratic machinery.