Monday, January 28, 2013

Milking It

Sometimes an example of bizarre and belligerent statism comes along that's just so pristine, it almost makes you feel like you're being set up.

Such is the case when a state government brings the hammer down on a grocery store for selling a product too cheaply:
Louisiana state regulators recently cracked down on a supermarket chain’s weekly promotional deal because it was selling milk too cheaply — which violates state law.

The upscale Fresh Markets was selling gallons of milk for $2.99 as part of a weekly promotional deal. Louisiana requires that retailer price markups be at least six percent above the invoice and shipping costs of the product...
If pressed, I'm not sure I could come up with a more potent illustration of it all. A market economy benefits the consumer with lower prices, greater abundance and variety of choices, and greater convenience. What do you think government does? Who do you think government benefits?

Low prices such as these even help consumers who do not want to buy the product. For instance, I get my milk from grass-fed cows on a farm outside of Richmond. It's unpasteurized and it is excellent. It also costs almost $9 per gallon, which seems fairly expensive but is indicative of its superior quality. When I walk into Fresh Market and see milk for $2.99 a gallon, I know that such a product is undoubtedly far below my (admittedly high) standards for milk, and thus I do not purchase it. Yet government's artificially raising the price of such milk leads consumers, however slightly, to believe the milk is of a different quality than the true market price would reflect.

That's not to say I'm now going to waltz into Fresh Market and buy a gallon of whatever watery chalk-like substance they're selling in there, only that the government's action has the potential to distort the values and worth that people place in a product.

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