How Commerce Protects Us — Deirdre McCloskey

Release Date
February 27, 2017

Topic

Economics Free Markets and Capitalism Regulations
Description

Prof. Deirdre McCloskey says commerce protects us because businesses know they can’t force customers to buy their products.

    1. The most dangerous monopoly: When caution kills | LearnLiberty (video): Professor Howie Baetjer explains why having government agencies assess the safety of products is not the most efficient way to assure our products are safe. 
    2. Google, Facebook Make Consumer Regulations Obsolete (FEE article): Jared Meyer argues that the Internet has put so much information at our fingertips that we no longer need consumer regulations. 
    3. There’s No Such Thing as an Unregulated Market (FEE article): Professor Howie Baetjer explains how markets regulate prices and quality. 

Dave Rubin:
You’re for one government should have the army [crosstalk 00:10]
Deirdre M.:
I’m for one government that has a monopoly of balance, but then we’ve really got to watch it very closely because it’s easy to misuse it and the underlying threat of a government is violence, physical violence. The trouble is that they can use it, whereas New Balance can’t force you to buy, can’t put a 38 to your head and force you to buy its shoes. Nike and New Balance and all the others are competing with each other. That’s by far a better protection for the interests of ordinary people than our so-called protections that the government offers. Let’s take food quality. Why isn’t there very frequent cases of people being killed by restaurants? Why not? What’s stopping it? They’ll say, “Ah yes. Food inspection.” This is crazy.
Dave Rubin:
Right.
Deirdre M.:
Any person who owns a restaurant knows that the food inspectors come once or twice a year, max. Often their corrupt and you can pay them $20 to overlook the rat feces in the kitchen, whereas look, put it this way. If Coca Cola, if they found one mouse in one can of Coca Cola anywhere in the world, the Coca Cola Corporation would go bankrupt.
Dave Rubin:
Yeah, the endless PR, the years.
Deirdre M.:
The endless P- All the years of building as The Real Thing would go right down the drain.
Dave Rubin:
Yeah.
Deirdre M.:
That expenditure they make on advertising is a bond, so to speak. It’s a bond they’ve put up, enormous, billions of dollars. A bond to shore up their reputation for having a soft drink that doesn’t have mice in it.
Dave Rubin:
I think they tried that. Wasn’t that New Coke?
Deirdre M.:
That was consumer preference, but poisoning is not popular. There’s a nice [frat 02:35]. If you ask … Oh, who’s that guy who travels around doing food shows?
Dave Rubin:
Anthony Bordain.
Deirdre M.:
Anthony Bordain. He’s great. You ask him what to eat in a foreign country, he says, “For God’s sakes don’t eat the hotel food. Eat the street food, because the street vendors have regular customers in their neighborhood. They poison someone, they’re finished. Whereas the hotels, they go away.”
Dave Rubin:
Yeah. That, to me, is your best argument for a free market.
Deirdre M.:
I think so, too.
Dave Rubin:
That your own interests, if you own a restaurant, it’s not that the inspector is going to force you to do it or that the government comes in, or as you said, you can pay them off and all this stuff, but the best is that your reputation, the caring of your work.
Deirdre M.:
Of course.