Valentine’s Day is a somewhat despised “holiday”. It’s built around excess. It’s a manufactured, fleeting celebration of a profound emotion we spend our whole lives exploring.
But Valentine’s Day is great in at least one way. It shows why capitalism works so well. I’m thinking specifically of the flower tent outside of my grocery store.
With increased demand comes increased supply
In the parking lot outside of the supermarket near me, they set up a big tent. (You can see it in the image at the top of this post.) It has fresh cut roses, some in vases, some wrapped in paper. It has balloons, stuffed animals, and chocolates. It even had rose petals by the box in a refrigerator. It was a one stop shop for Valentine’s Day. And it was loaded with inventory at 5pm, when I stopped by after work.
That’s capitalism at its finest.
Sure, it would have been smart for me to order flowers in advance. I could have saved a few bucks. I could have avoided the Valentine’s Day crowd. But I didn’t do that.
I waited until the last minute. I relied on urgency for motivation. And capitalism is the perfect system for this kind of behavior. I’m not the only dude that waits until Valentine’s Day to make my purchases. Fortunately there’s enough of us that the market responds.
The market caters to us. New supply emerges to meet the excess demand. In this case, the demand spike is easy to predict. So supermarkets, flower shops, all the other usual suspects…they can all respond in a timely, efficient way. It’s fantastic.
Supermarkets on Valentine’s Day are the opposite of the DMV every day
Compare the supermarket’s response to Valentine’s Day with the DMV’s response to its every day demand. Want to stop by the DMV after work? Tough shit. Want extended holiday hours? Take a hike. You’re going to get the availability you get, whether it’s convenient for you or not.
Supermarkets and flower shops respond to market forces. They’re competing on who can deliver the most value to customers. The DMV competes with no one. They have a bureaucratic mandate. They’re simply fulfilling a regulatory obligation. The bureaucratic model doesn’t work the wonders that capitalism does.
I understand it’s easy to take shots at the DMV. No one likes getting their driver license renewed. And I also understand that we need regulation. There are tasks that bureaucratic entities alone can manage. Capitalism isn’t a solution for everything.
Still, think of public/private partnerships that try to blend the best of the two worlds. We can stay with motor vehicles. You can have your car inspected at a private car repair shop. Those shops do compete for customers. Granted, car inspections aren’t their primary market. They’re probably not dedicating a ton of resources to meet that demand. But at least they play by the rules of the market.
These private shops know that if you have a crappy inspection experience, you’re much less likely to visit the shop for other services. They have a brand and reputation to protect. So they serve you well, even if you’re only getting a piddling inspection.
It’s easy to complain about economic realities. But don’t unfairly dump on capitalism
We’re living amongst a resurgence of protectionist sentiment. As the rich get richer, the rich become more despised. Banks fight chronic distrust. Student loan debt is becoming unmanageable.
It’s perfectly reasonable to diagnose our existing economic ills. But let’s not get carried away with “solutions”. Let’s not assume capitalism is fundamentally broken. Sure, it has some rough spots. We need to supplement it in the right way, with a useful regulatory framework. But we don’t need to throw it away.
It works in some very boring, very effective ways. Like on Valentine’s Day at the supermarket. As these boring, effective mechanisms accumulate, we build an incredibly impressive economy.
We can certainly improve our economic system. As we do the work, let’s keep in mind all the magical things we already have. We need to be careful not to take two less visible steps backward to capture one visible step of progress.