No Standing in Lines, Just Amazon Go

By Lydia White

Amazon has introduced its new line of physical stores: Amazon Go. Using a smartphone, consumers can swipe into the store, pick up their desired items, and exit—receiving an electronic receipt for their purchases and avoiding dreaded checkout lines. Many hail this new technology as promising and exciting, while others are concerned about the potential for job losses.

Such concerns overlook a fundamental aspect of free market economies: freedom of choice. While many will choose Amazon’s technology for convenience or cost, others may prefer not to out of regard for traditional retail job opportunities or other business or personal reasons. But regardless of these differences, freedom of choice serves everyone.

This holds true across industries. You can buy a BlackBerry or upgrade to an iPhone. You can hail a taxi or download Uber. The economy is not a zero-sum game.

Consumer decisions aren’t made in an ivory tower or executive board meetings, but by each of us in our daily lives. Businesses must cater to our needs to maintain mutually beneficial, voluntary transactions. No one is forced to shop in an Amazon Go store, and traditional shopping experiences will continue to exist as long as consumer demand for them exists.

So, whether or not you are enthusiastic about capitalism’s creative destruction, the choice remains yours.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Do You Support the Free Market, But…?

I first wrote in 2003 about what I call “The Statement”:

“I support the free market just as much as you do, but….”

I had been hearing versions of The Statement in and around political and business circles for years. It impinged on one of the first issues Cascade Policy Institute tackled in the year of our founding, 1991. The city of Portland was planning to franchise residential garbage service (which it eventually did at the expense of consumers). At the time Portland was the largest city in the country without government garbage service or a private monopoly protected by law.

After I had written and testified before city council about the harmful effects of government intrusion into the garbage business, a local garbage hauler called me. He wanted to explain how protected franchises—that is, government-protected private monopolies—were actually a good thing.

After a few minutes he realized that I wasn’t buying his arguments, so he made what I later labeled The Statement: “I support the free market just as much as you do, but….” The “but” in this case was the exception he felt should be made to protect his business from competition and consumer choice.

Over the years I’ve heard The Statement from business people who argue that the State of Oregon and local jurisdictions should continue protecting them from new competition in all sorts of industries. The Portland taxi cartel successfully protected its position for decades before Cascade and others helped a group of Ethiopian immigrants to enter the market with Green Cab in 1998. Then, in 2015 the expanded taxi cartel tried to rely on The Statement to fight off ridesharing companies like Uber until the new smartphone technology that enabled them gave consumers power to demand that local governments allow the transportation freedom they promised…and delivered.

At the Capitol in Salem, I heard The Statement from business lobbyists who argued that the free market was great…except that their clients should be protected from new competitors in the home moving and natural hair braiding fields. Of course, these lobbyists weren’t simply protecting the interests of their paying clients…no, they always argued that keeping competitors out was for the benefit of the public health and safety. Luckily for the public, these arguments failed; and it is now much easier for aspiring entrepreneurs to enter these fields in Oregon, providing more choices for consumers and more economic opportunities for themselves.

On the national scene we’re now hearing a version of The Statement when presidential candidates say something like, “I’m for free trade too, but….” Flawed economic arguments about foreigners “taking our jobs” and other nations harming America by somehow imposing trade deficits on us are trotted out to justify protecting some businesses against others, and against consumers.

Business people argue for government protection at their peril. If government is justified in controlling who can provide our garbage service, or taxi service, or natural hair braiding, then why shouldn’t it control who can sell us our food, clothing, and shelter—all things we cannot do without?

If government can deny us the right to buy products produced in other countries, or can slap high tariffs on those products so that we have to pay much higher prices, how is this protecting “we the public”? Isn’t it really protecting “they, the special business interests”?

Lest anyone mistakenly believe that Cascade Policy Institute is “pro-business,” we are not. Rather, we are pro-liberty, pro-free-markets, and pro-consumer-choice. We understand that the slippery slope to a government-controlled economy begins when capitalists fail to consistently defend capitalism. The resulting economy harms most consumers and businesses alike at the expense of those who work for and are protected by big government.

There may be a case for government limiting competition in some fields and subsidizing some businesses at the expense of others; it’s just not a free-market case.

This Thanksgiving, Are You Part of the One Percent?

You may not have learned this in school, but prior to the 1623 Thanksgiving celebration in the Plymouth colony it had the equivalent of a modern-day socialist economy. Land and crops were held in common; and food was distributed based on need, not on production. Able young men were often unwilling to work hard for the benefit of other men’s families.

After several disastrous harvests, each household was given its own plot of land. They could keep what they produced, or trade their crops for things they needed. Private property and a free market economy resulted in a truly bountiful harvest in 1623 and beyond.

Today, most Americans are actually rich, thanks in large part to retaining those private property and free market traditions. Perhaps not rich in relation to other Americans, but rich in relation to people around the world.

If your family earns more than $32,400 per year, you are in the top one percent of all income earners worldwide. Recently, half of all American families earned more than $51,939, and the average family earned $72,641. Even the lowest family income group by race, African Americans, had a median income over $33,000. Looked at this way, most Americans are part of the world’s one percent.

Things are far from perfect, but most of us have a lot to be thankful for this Thanksgiving.

Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

Forced Charity Isn’t Charity…It’s Just Force

When Phil and Penny Knight announced last September* that they would offer $500 million to OHSU for cancer research if the public matched their gift, it understandably led to an outpouring of positive comments and support. But then, OHSU wanted state taxpayers to come up with $200 million of the match through a building bond. That resulted in much less positive press and some outright criticism.

Now, OHSU has modified its ask so that a $200 million building bond will be in addition to the $500 million it will try to raise from voluntary donors. That would mean a total of $1.2 billion in cancer research funds stemming from the Knight challenge.

Either way it’s presented, though, asking taxpayers to repay $200 million plus interest to house cancer researchers and clinical trial space is a questionable proposition.

Some proponents are counting on this deal to make Oregon the go-to state for top cancer researchers. But at least 67 other National Cancer Institute designated cancer centers nationwide are already competing for recognition and talent with OSHU. Other states are funding some of these centers already. It would be wonderful if future breakthroughs in cancer research came from Oregon, but this is not within our state government’s control.

Philanthropy is admirable, but forcing taxpayers to help match a private gift is a move in the wrong direction. Forced charity isn’t charity…it’s just force.

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

*Audio recording incorrectly lists date of announcement as last November instead of last September.

The Story Behind Thanksgiving That Every Elected Representative Should Know

The quintessential American holiday, Thanksgiving evolved from the Pilgrims’ celebrations to thank God for the harvests that saved Plymouth Colony. What most people didn’t learn in school is that nearly half the Mayflower Pilgrims died of starvation because many refused to work in the fields.

Plymouth Colony originally had a socialist economy. Land and crops were held in common. In the words of Governor William Bradford, “the young men who were most able objected to being forced to spend their time and strength working for other men’s wives and children without any recompense.” Collectivism incentivized colonists needlessly to rely on the efforts of others. Realizing this, Governor Bradford assigned each household its own plot of land. Families could keep what they produced or trade for things they needed. The result was a bountiful harvest in 1623.

Instituting private property and respecting the autonomy of the family unit caused Plymouth to survive. Collectivism and central planning produce scarcity. Private property, free markets, and personal responsibility lead to prosperity and plenty. And a healthy economy, with strong and independent families, enables a community to help those who genuinely need assistance. All are important lessons for America today from William Bradford’s first Thanksgiving.

Kathryn Hickok is Publications Director at Cascade Policy Institute, Oregon’s free market public policy research organization.

Occupy Portland: Don’t Replace One Set of Thieves With Another

The recent Occupy Wall Street/Occupy Portland movement has focused attention on a number of perceived ills in our society. Fortunately, a new book, written before the movement began but distributed in the middle of it, can shed light on why many of the “occupiers” blame the wrong people for their troubles and risk replacing one set of thieves with another.

The Morality of Capitalism* is a short book of essays written by entrepreneurs, philosophers, and economists. Each brings his own perspective to the subject. The editor, Dr. Tom Palmer, may have anticipated the Occupy movement, because he included in the book’s Introduction a timely discussion of free-market capitalism versus crony capitalism. It’s a discussion that the occupiers would do well to read.

Tom Palmer is on a book tour, which included a forum sponsored by Cascade Policy Institute in Portland on November 3. Just a few blocks from city and federal parks “occupied” by a mix of protesters, homeless, and street youth, he shared his insights on the movement and where it goes wrong.

He thinks the occupiers yearn for a world before modernity. The creative destruction involved in progress and innovation scares them. Here is a summarized example Palmer used that younger audience members may not have related to, because the innovation it involves largely happened before they were born:

Not too many years ago people went to school to become typewriter repairmen. Every town had a typewriter repair shop and you could earn a respectable living repairing them all your life. Then, personal computers were invented and typewriters virtually disappeared, putting the repairmen out of work. What happened to them? They all starved (just kidding). No, they retrained for other, more useful jobs and we all benefitted from the computer revolution. The typewriter repairmen didn’t die — the way things had been done died.

Palmer places blame for the recent economic crisis at the feet of government enterprises, including The Federal Reserve System, mortgage facilitators Fannie Mae and Freddie Mac, and The Bank for International Settlements.

He explains that free-market capitalism involves profit and loss, but cronyism is only about profit. Losses are pushed off onto the taxpayers. Cronies are friends of those with political power. They seek protection from market forces. They urge their political friends to outlaw their competitors and to bail them out with taxpayer funds when their risky schemes go wrong. Those now occupying Wall Street and Portland parks may have identified the cronies, but they mistake them for those who bear the ultimate blame.

One of Palmer’s more colorful descriptions may resonate with the occupiers. He postulated that most nations were established by pirates―stationary pirates who, rather than periodically attacking ships and looting them, now could loot smaller amounts from their subjects all the time.

Another very powerful insight might make the occupiers stop and think about their assumption that the rich got that way by stealing from the rest of us, thus making us poor. Palmer pointed out that poverty has no cause. Wealth has causes. Poverty is the absence of wealth. In the Introduction to The Morality of Capitalism, he states:

In many countries, if someone is rich, there is a very good chance that he (rarely she) holds political power or is a close relative, friend, or supporter—in a word, a “crony”—of those who do hold power, and that that person’s wealth came, not from being a producer of valued goods, but from enjoying the privileges that the state can confer on some at the expense of others.

In a country with a primarily free-market capitalist system, the rich got that way by providing value to others. They created, made, and/or sold goods or services that lots of us value and are willing to pay for. We value those goods or services more than the money we voluntarily give up to acquire them. Both sides of these transactions benefit.

Boiled down, the essential difference between free-market capitalism and every other economic system is that capitalism involves voluntary transactions between willing buyers and willing sellers. It is this voluntary feature that makes capitalism moral.

Occupiers don’t seem to have grasped this important concept. Too many of them seem hell-bent on trying “…to redirect crony capitalism in the protesters’ preferred direction, stealing for them rather than from them.” Theft, whichever direction it goes, is still theft.

*The Morality of Capitalism: What Your Professors Won’t Tell You, edited by Tom G. Palmer. Published by Students For Liberty & Atlas Network
(http://studentsforliberty.org/wp-content/uploads/2011/04/The-Morality-of-Capitalism-PDF.pdf).

Gary Galles, “Protesters’ gripe is with crony capitalism,” October 12, 2011
(www.ocregister.com/articles/capitalism-321676-others-crony.html).

 

A Free Market Approach to Sustainability

Karla Kay EdwardsQuickPoint!

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by Karla Kay Edwards

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Using the free market to drive industry change is foreign to many, but it has been proven over time a much more effective way to achieve change than a top-down regulatory approach. Case in point, Walmart recently announced its new sustainable agriculture policy. The business behemoth is the United States’ largest purveyor of groceries, and therefore, one of the largest customers for the agriculture and food processing industries around the world.

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