What Does “Buy Local” Really Mean?

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I’ve seen this picture passed around a few times on social media; especially around November and December with people doing Christmas and other holiday shopping. The message is riddled with as many good intentions as it is with fallacies. On the surface, it proposes a common sense plan to revitalize the economy and help the citizens prosper. However, it is steeped in protectionism and misleading concepts. It can best be broken up into 3 areas: 

“If each of us spent $100 a year… it would put an extra $3 million year into our economy”

Obviously, due to space constraints on a chalkboard sign, no sources are cited for the dollar amounts, where they came from, or why they were chosen. So right off the bat, it is important to regard the sign as more of a good idea than a golden truth. However, we can do some simple math to get a starting point:

$3,000,000 invested / $100 per person = 30,000 persons to achieve this goal.

30,000 people works out to a small town, and “our economy” (more than likely) specifically refers to the town’s economy. Is this what defines “local” when describing a local business? The township or village? What about the county? Some major cities sit on multiple counties – i.e. New York City occupies five different counties. Is that still local? Here in the Bluegrass, we have a Kentucky For Kentucky campaign that helps promote businesses and attractions in the state. Is that still local? What about Toby Keith insisting his purchases say “Made In America”?

The word “local” has a different connotation depending on who you ask. Most importantly, though, where the border of “local” lies will greatly affect how that $3 million is spread out. A handful of businesses on Main Street in Small Town, USA? That would be a nice boom to the locals. The same amount comes out to pennies for Kentucky’s 4.4 million residents though. So without defined metrics, the statement is empty.

“…on local businesses instead of chain stores…”

This can be boiled down to 2 of the 5 W’s: Why should I buy local? And I want more than “because your neighbor. ” Specifically, what is the difference maker between small/local business and a chain, and why should that be important to the consumer? The beauty of this question is that there is no objectively, measurably true answer. It all depends on the subjective value on the customer; what they want for their dollar. Personally, I prefer small, “hole in the wall” restaurants over chain restaurants. That’s not to say that I hate chain restaurants. I just prefer one over the other. Sure, I can get a Big Mac for less than $5. But I would prefer a Big Tolly with pepper jack, bacon, jalapenos, and salsa with a side of cheese fries and an Ale-8-One to drink for a few dollars more. For the person on a budget, though, the Big Mac is probably the better option. The most important part is that’s not up for me to decide. It is solely for the consumer.

To expand on the first point made earlier in regards to “local” and borders, what makes a chain store inferior to a local business? Do the Wal-Mart and McDonald’s employees not live in the same town as those from Jim’s Soda Shop? From the cashiers, to sales associates, to shift managers, and even the store manager. Sure, the dollars keep flowing upward to the corporate office, but the aforementioned people still earn a paycheck just like everyone else. And in turn, they spend their dollars in town and also contribute to helping their neighbors. Much like the Wal-Mart corporate office, small business owners re-invest their profits back into their stores. They add more variety of products; hire another worker or raises current worker’s wages; they save up and open another location across town. All of this on top of what they take home, pay-wise, and how that money is invested: paying off the mortgage; contributing to their kid’s college fund; building a deck on the back of the house… things that contribute to their happiness and well being. It doesn’t matter who does the hiring – local employees means local dollars.

If local is defined as a small business with no corporate office and whose owners live in the community, then some products absolutely, positively cannot be bought from a local business. Bananas are grown in Southeast Asia, Africa, and parts of Central America. You won’t find them at a famer’s market in Montana. Ford’s heavy duty trucks and Toyota’s Camry and Avalon are made in Kentucky. If you live in one of the other 49 states and drive one of these vehicles, you didn’t support a local business. How many parts of your computer or smartphone were made in Silicon Valley? The argument boils down as such: for what consumer products is it ok to purchase locally, and what products is it ok to purchase from outside the region?

“…it would create thousands more jobs every year.”

I wish I could say “citation needed” and leave it that. And my fellow Austrian readers are probably nodding their heads in approval. Yes, as mentioned in part 2, business owners reinvest in their stores. This means expansions and hiring. I’m not disputing that. Refer back to part 1 though: without defined metrics, we have an empty statement. Obviously, $3 million reinvested in New York City or across the state of Kentucky won’t do squat. It’s a drop in the bucket. But even if the $3 million was concentrated on Main Street, it is a stretch to say that thousands of jobs would be created. Depending on the business, capital investment may be the best move; more efficient machines for more efficient service. Perhaps a service oriented business, like a barber shop, would do well with a labor investment. Whatever the business owner chooses, know that it is for the best interest of the customer.

Final Thoughts

Despite popular opinion, there isn’t some kind of wall between chain stores and local stores. Wal-Mart has recently started teaming up with local manufacturers (relative to store location). On the flip side, small business owners may use Office Depot for supplies or a large bank for their business loan. The best thing for the customer is for them to pursue what they view as the superior product or service for the best price. Through price signaling and demand, the businesses that please the largest portions of the public will remain open. Those concerned about small businesses should look at regulations, wage laws, price floors and ceilings, and other arbitrary demands coming out of the local, state, and federal levels. Large corporations who have amassed the money necessary for certifications, and who are politically connected, will find it easier to meet Uncle Sam’s demands. The small business owner is lucky to stay afloat.

Further Reading:

Subjective Value

Eugen von Böhm-Bawerk on Subjective Value
Robert Murphy on Subjective Value

Regulations

Strive To Help Entrepreneurs Thrive
How Excessive Regulations Stifle Small Businesses
John Stossel: “I tried to open a lemonade stand.”  (Don’t let the Fox News tag discourage you; Stossel is very libertarian.)

#Regulation @ Reason Magazine
#Regulation @ The Mises Institute

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A Hug For The 1 Percenters, From A 99 Percenter

The Occupy Wall Street movement may have lost most of its steam but animosity towards the rich and affluent in America is still alive and well. Predominantly from the extreme left (though political allegiances hardly mean anything anymore) the extreme wealthy are expected to “contribute to society” and “pay their fair share” through extensive taxes on their companies, personal income, capital, and anything else to make their existence burdensome. They “hoard” their money away in Swiss bank accounts, or purchase rare opulent treasures that many would consider unnecessary. These modern day Scrooge McDucks, with monocle and top hat, have had their reign and now must pay the piper. What is their punishment to be? The government is to tax the ever living bejesus out of them to fund social welfare programs. Their wealth needs to be redistributed because it’s fair – because majority of people are much much lower on the totem pole and struggling to get by financially.

Having said that, I love rich people. Yes, you read that correctly. I love rich people. Filthy stinking rich. To quote the great philosopher Jay-Z, “fuck rich, let’s get wealthy.” I’m talking about people with so much money that you can smell it on them. They wipe their asses with Benjis. They drive cars so rare, you’ve never even heard of them. They own 15 different homes and they’re more hidden and secure than U.S. military bases. Since I adore these people, I must be wealthy too, right? I must be sitting a few rungs from the top as well.

False.

Full disclosure: I’m broke. Not impoverished, but I still keep my belt tight. My head is barely above water. Know what I make? $15.40 an hour. A mere 40 cents over the minimum that Democrats want. And let me tell you something: it’s nothing to shout about. First of all, thanks to taxes and overpriced insurance, I only take 2/3 of that home. Despite “earning” more than twice the minimum wage – on paper – I take home $10 and some change an hour. Factor in that I gas up twice a week because my employer is an hour of interstate driving away and it quickly becomes apparent that “living wage” is a very subjective phrase. Last I checked, working full time, I fall into the 4th quintile income bracket. I’m barely above poverty and I’m using (one of) my college degree(s) too.

So what gives? Why don’t I get some assistance that I “rightfully deserve?” I may not be in the bulls eye of the demographic that the Dems want to help, but I’m still on the board. I should marching with the Occupy protesters. I should be writing letters to my Senators and Representatives, urging them to do something about this damn evil income inequality. I contribute just as much to society, right? I should be compensated accordingly.

Here’s the thing: none of the above can truly help me.

Imagine I’m trying to climb the income ladder, except I have a broken leg. And it’s nasty too. Compound fracture. Not a clean break but multiple pieces. I’m going to need corrective surgery, a titanium rod, and physical therapy – ALL on top of 6 months in a boot. Government assistance (let’s call it what it is – wealth redistribution) is somewhere between a band aid and a roughly assembled tourniquet. Yeah, it’s something, but in the grand scheme of things… it doesn’t change my situation. I’m still crippled. I could maybe advance up the ladder but it’s going to take a while and it’s going to be very painful. I want my leg to be in one piece and functional. The wealthy 1%ers, in this analogy, are somewhere between the actual surgeons and the administration of the hospital performing my surgery. They’re the ones directly contributing to me getting better.

At the core of it all is risk management. You may call it cost-benefit analysis. All decisions – especially economic decisions – carry risk. As you accumulate wealth, that risk becomes smaller because the loss to you is smaller. Imagine a used Chevy Cavalier for sale for $1,000. To someone making minimum wage, $1,000 is risky. Saving up that amount of money is difficult. What about reliability? Will the car break down five miles down the road? Those are the risks for someone making low wages at an entry level job. However, as they learn valuable skills and move up in the company, their wages increase because they’re more valuable. At $7.25 an hour – federal minimum wage – the Cavalier is a risky decision. What about at $8 an hour? $10 an hour? Salaried and making $40k a year? As the wealth accumulates, the margin of acceptable risk also increases.

For same car, what’s the margin of risk for someone clearing $100k a year? Probably zero. The car can be purchased easily. Any necessary repairs can taken care of just as easily. But now enters the second element of a financial decision: subjective value. What is the value of this car for someone making minimum wage compared to the doctor/lawyer/etc clearing six figures a year? For the former, it is access to mobility in the world. This may open up their opportunities to pursue a job with better pay or benefits. They value getting from Point A to Point B more than they value leather seats, touch screen navigation, and panoramic sun roofs. For the big wig, the ability to obtain transportation is nothing short of guaranteed. The questionable reliability of the aforementioned Cavalier is not a risk for them. They can afford factory fresh with the expectation of a long service life.

Because of these guarantees, they can afford to accept a new kind of risk – innovation. Most people would consider a person who earns six figures to have “made it” in life. They can live comfortably and also pursue new adult toys. In contrast to the Chevy Cavalier, let’s look at Mercedes-Benz. I’m a big fan of German engineering – Benz, BMW, Porsche, and Audi. Not just any Benz model – let’s look at the S65 AMG luxury sports sedan. Starting at $222k before options, it is a tour de force of automotive engineering. The S65 boasts many luxurious creature comforts and amenities such as 12 way adjustable power seats with memory settings – front and rear, touch screen stereo, rear seat entertainment screens, automatic sunscreens, and even a small refrigerator in the rear arm rest. All of these were unimaginable 50 years ago. Much less, the idea that a car could cost more than a house. But remember subjective value: at this level, the consumer obviously values the comforts more than just getting from A to B.

Of all the luxuries and technologies offered in the S65, I want to focus on one that isn’t exactly brand new: turbocharging. For my not-so-mechanically inclined readers, a turbocharger is a device that harnesses the kinetic energy of the spent exhaust gasses in an engine to spin a set of fans that feed more air into an engine than it would normally draw in. More air in the cylinders means more fuel can be mixed in for a bigger boom and more power. The best part is that it only operates when needed. Cruising on the highway under a light load, the engine will return fuel economy as expected for the given engine size. But stomp on the gas, and the exhaust flow spins up the fan, causing an exponential increase in air flow and consequently, horsepower. With this technology, small four cylinder engines can have power outputs that rival V6s and and even V8s. The S65 doesn’t use turbos for mere efficiency though. No, the S65 features a massive 6.0L V12 engine with TWO turbos. It offers a whopping 700+ pound/foot of torque and over 600 horsepower! So not only are you getting from point A to point B in style, but you’re getting there pretty damn fast too.

As I mentioned before, turbocharging is nothing new in automotive engineering. The first turbocharged vehicle made its debut in the early 1960s. It is a proven technology. It can be found in quarter-of-a-million dollar luxury sport cars (the S65 in this case) down to the very affordable Ford Fiesta, a daily beater that offers a lot of bang for the buck (approx. $15k). Turbos did not start out as a perfect technology though. Someone had to take a risk with the first turbocharged car in 1960-whenever. Profits from the sales went into engineering and R&D. Time passes and then advertisers were able to say, “You know that thing you like? We made it better.” Thanks to advances and developments in material choice, engine tuning, and overall engine design, companies like Volvo (known for turbocharging much of its fleet) have developed a reputation for amazingly reliable vehicles that exceed well over 200,000 miles on the odometer during their lifespans. The consumer wins with a reliable product. The producer wins with a pay day. To paraphrase a quote printed on a former employer’s pay stubs, “A satisfied customer made this check possible.”

As I previously mentioned, the S65 offers extravagant amenities…

  • 12 way power seats with memory
  • seat massage
  • seat ventilation
  • power sunshades in the rear windows
  • rear refrigerated storage
  • 12″ touchscreen technology center (radio, navigation, WiFi, etc)
  • rear seat entertainment screens

Compare these against the commonplace turbo. Now, in 2015, someone takes a risk with the new conveniences and technologies. In turn, Benz uses the profits from the sale of an S65 to reinvest into R&D and engineering. Is there a cheaper motor option for the power seats? Is there a material that improves the efficiency of the seat ventilation whilst still providing an elegant appeal? Is there a faster, smarter CPU for the in-dash technology center? Without someone willing to take risks, those questions may not be answered. Thankfully, there are people willing to accept that risk. Risks, along with other needs, wants, and desires, fuel innovation. Innovation not only creates jobs, but perfects risky technology (like the turbo in the 60s) into bomb proof reliability staples (see Volvo) at an affordable price (Ford Fiesta and Ecoboost).

So for the rich, the elite, the wealthy, the affluent, the connected, the powerful… The people of this country with big demands and even bigger bank accounts… Thank you for taking risks. Thank you for never being content with what you have. Thank you for treating luxury like a necessity. I’d hug you all if I could. Sue me, I’m an affectionate person. Because of your purchasing decisions, I (and many others) have future job prospects to look forward to. And maybe I’ll drive to that job someday in a budget daily beater Ford that offers 12 way power seats with massage, a touchscreen dash with WiFi, and a refrigerator unit that keeps my Kahlua mocha latte nice and chilled.

OH!

…..and a turbo.

Smoke ‘Em If You Got ‘Em!

On Thursday, November 13, Lexington City Council added e-cigarettes (commonly known as vapes) to its already existing indoor smoking ban. Heeding to outcries of public health concerns, the City Council extended the idea that we citizens lack the competence and capability to make decisions regarding our health and property. Some are quick to argue the case for public health. To paraphrase a famous Vulcan, the need of fresh air to many is more important than the desire for clouds to a few. There is a host of fallacious arguments and rationale in the passing of this legislature though.

Individuals & Subjective Value

First and foremost, is the idea of the “public” being a singular collective unit; that the loudest voices dictate movement and control. Nothing could be further from the truth. The reality is, the public is made up of individuals. Individuals with their own names, identities, dreams, hopes, desires, needs, and wants. Frequently, these needs and wants overlap. This is how different social groups form. People who find Idea A more important than Idea B huddle together, and vice versa. Even more, these groups are not mutually exclusive. Person A can have 99.9% similar interests as Person B. Statistically speaking, any outlying differences are negligible and these people are one and the same. But because of subjective value, the 0.1% difference that separates Person A from Person B is viewed with different levels of importance. What is a mountain to one may be a mole hill to another.

Subjective value is exactly what you think it is. The value we, as individuals, put on an object, idea, place, etc. is different for every person because of the aforementioned needs and wants. It is completely separated from monetary price. Picture, if you will, a Lamborghini Aventador. Beautiful futuristic, and aerodynamic, styling. More horsepower than a bluegrass pasture. A stunning engineering marvel. The base price of this machine is just under $400,000. That number is objective, though it may change over time due to depreciation. It’s the same price regardless of who approaches it. But what is the VALUE of this vehicle? How much value would a family of five put on this? Considering its very low daily driver usability, the family of five may not put much value on said vehicle (except, maybe to sell it and collect the money for a more appropriate vehicle like a minivan). What about the value placed on it by, say, Bruce Wayne? Being a billionaire with money to spend, Bruce probably places great value on the machine as a means of pleasure and enjoyment. This is subjective value. 

What does this have to do with an e-cig ban? Much like the Lamborghini, people value the presence of e-cigs in businesses differently, as both business owners and customers. The bar owner, in an attempt to appeal to the “smoking” crowd, may find it advantageous to allow e-cigs in their establishment. The profit gain is valued more than any perceived health risks (or the profit gain offsets the health risks). Who might value the absence of e-cigs? What about family practitioners, yoga studios, or other health-oriented businesses? Wouldn’t these places possibly forbid the presence of e-cigs in the building regardless of legislature? That is the subjective value of the business owners. What about the subject value of the consumers? Instead of voting in polls on officials who will often make decisions that do no please everyone, consumers vote a different way: they “vote” as customers, casting dollars instead of ballots. This is why libertarians prefer market action over government action. With government action, there is always a guaranteed loser. And that loser is the minority of an election. In a free market, people are free to pursue their interests because of the presence of multiple businesses, and there is no “one size fits most” model. If there is no such business in place to appeal to a certain demographic, then people are free to start one. The customer benefits by having a demand for a need or want satisfied, which in turn enhances their quality of life. They value the product or service more than they value the money required to obtain it. Bruce Wayne values a Lamborghini in his garage more than he values $400,000 in his bank account, for example. The person(s) who start the business receive monetary gain from the sale of the product or service. This monetary gain enhances the quality of their life because it enhances their economic freedom; they now have the capital means to pursue their own needs and wants. This snowball effect is how capitalism raises the standard of quality for all people involved. This idea has been discussed numerous times by other professionals in the field, and will be mentioned again in later posts of mine.

Property Rights

Whenever a proposed ban is introduced, the word “rights” gets thrown around by a lot of people. In this case, with the e-cig ban, there are three main groups claiming rights infringement:

  1. The rights of the people who use e-cigs
  2. The rights of the people who wish to breathe air that is free of e-cig vapor
  3. The rights of the business owners who are affected by the ban

So who has proper claim to their rights? First, we establish that there are two different kinds of rights: positive rights and negative rights. These have nothing to do with the conventional definitions of positive and negative, or good and bad. Instead, they describe an obligation to action or inaction. A positive right requires action to be made by someone else. In the legal system, these are usually referred to as entitlements. When someone claims a right to food, shelter, or healthcare, this is an example of a positive right. Someone must act to provide the food, shelter, or healthcare. A negative right is the right to inaction; to not be subject to the actions of another person. If I say “I have the right to pursue (blank),” what I am referring to is the pursuit of whatever idea, object, or service I desire. I have the right to make an attempt. No one else has the right to stop me from making an attempting. Dr. Aeon Skoble, professor of philosophy at Bridgewater State University, does a much better job of explaining this concept.

For the e-cig users, they own their e-cigs. That’s their property. As such, they are free to pursue usage of their property. Thus, they’re in the clear. For the non-users, they are free to pursue businesses whose air is free from the vapor. No one has to supply it. Thus, they are in the clear as well. Business owners, like the e-cig owners, are free to pursue whatever they like with their property. If they want, they can allow e-cig usage on their property or forbid it. They, too, are also in the clear. So whose rights trump whose? It ultimately goes to the business owners. They own the property and premises (or rent and use within the binding terms of their lease) while customers are merely passing through. It is no different than someone having rules and guidelines for their personal house. They own the house. They call the shots. The same is true for a business. If a person invites you to their house, and one of the conditions of that visit is that you don’t smoke in the house, yet you light up anyways, what’s going to happen? You’ll be asked to stop, leave, or will be forcibly removed. This logic holds true for businesses. When you go into Kroger, it is implied that you are there to purchase food goods. If you begin throwing produce on the ground and destroying it, what is going to happen? The produce is the product of Kroger. They own it until a customer agrees to pay the desired price. When you destroy that, you destroy property AND potential profit gain. You’ll be asked to leave, if not arrested for property damage. In the case of Lexington’s City Council ruling, business owners are allowed to do whatever they want with their property – EXCEPT allow the usage the e-cigs. This turned the negative right of patrons pursuing cleaner air at a business into a positive right. It dictates that someone else (in this case, business owners) must take action in order to provide the clean air. This infringes on not only the rights of the business owner to provide an e-cig friendly establishment, but also the e-cig users who normally would have entered a business agreement with the aforementioned e-cig friendly business owners.

Enter market action again. All three groups could easily co-exist. If e-cig users value the e-cigs that much, they can “vote with their dollars” at businesses that allow e-cigs or other vapor devices. If non-users value vapor free air that much, they can “vote with their dollars” at businesses that forbid e-cigs. If there is truly a public health concern over e-cigs (like lobbyists claim), then the business that forbid it will thrive and the others will not. That is the flip side of property rights: you are free to do with your property whatever you wish. You are not free from the economic consequences as a result of those decisions.

Unseen Consequences

For my final critique, I’m enlisting the help of Henry Hazlitt. Mr Hazlitt was a prolific figure in Austrian theory economics, contributing to such publications as The Wall Street Journal, Newsweek, and The New York Times, and writing numerous books and articles. His most famous work would have to be Economics In One Lesson. It is a fantastic, short, easy to read book that lays out economic lessons in such a way that anyone, of any discipline, can easily understand. To jump ahead, and offer as a spoiler, I refer to the lesson as suggested by the title, which is:

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

To paraphrase, any economic action has both seen and unseen consequences, for intended and unintended groups. Majority of the time, when a governing body seeks to make a ruling similar to what has transgressed with the Lexington City Council, the elected officials only see the obvious effects and the obvious targets. In this case, the target was business owners and the effect was to appease the demands of the anti e-cig lobby. “Our intent was not to put anyone out of business,” says Vice Mayor Linda Gorton (from the article). While it might be a stretch to say that this will put people out of business, what about unintended consequences though? This is difficult, perhaps even impossible, to measure because it involves what could have been. From the article:

Bill Anderson at Precision Vapor on Southland Drive, said business has been growing. Precision Vapor was the first electronic cigarette store in Lexington when it opened two years ago. Now there are at least a half-dozen stores dedicated solely to electronic nicotine-delivery systems in Fayette County.

Anderson said he hasn’t heard whether e-cigarette stores are exempt under the ban that prohibits smoking in workplaces that are open to the public. But if tobacco stores are exempt, electronic cigarette stores should be as well, he said.

First off, this legislation was passed just last Thursday and already e-cig suppliers are worrying about the future of their businesses. Preliminary assumptions indicate that they should be safe. Emphasis on should. Unintended consequence #1: possible lost sales and/or possible lost businesses in the e-cig industry. This is especially damning considering the emphasis put on small businesses and the “buy local” tendency of Lexington citizens. Feel free to start to a business! Just hope that busybodies don’t find some hidden “hazard” whilst, at the same time, blatantly ignoring the idea of individual choice and autonomy, and that no one is forcing them to use said product (cough like health insurance cough cough).

Aside from the obvious damage done to the local economy and small businesses who would be hurt, all products sold related to e-cigs are subject to the 6% sales tax imposed by Kentucky. Unintended consequence #2: reduced sales tax revenue related to the e-cig industry. I mention this not as an advocate for the sales tax, but as a reminder that the sales tax exists to generate revenue for the government. This is not the first time that legislature conflicts with itself. First, you have a tax that exists to collect revenue. Then a new product is on the market which is subject to this tax. Win for the state, right? Then, because of secondary regulation, that revenue is lost because their regulation cut into the sales of the previously mentioned product. So what do they value more: revenue or the protection of “public health”?

Remember my previous example of a bar owner who might benefit by catering to e-cig users? The sales tax example expands even further. There is a sizable “I smoke when I drink” crowd out there. If that demographic is negatively affected, then we come to unintended consequence #3: reduced profits for the bars, and unintended consequence #4: reduced alcohol tax revenue. Wash, rinse, and repeat of my previous statements about small businesses being harmed since nearly all bars are small businesses. The bar example has a particularly interesting domino effect so I’ll illustrate a scenario:

Diane owns a bar in downtown Lexington. It’s quite the hot spot. She opened her doors after Lexington’s first smoking ban. Diane is also an e-cig/vape enthusiast. She regularly hosts meetings for other enthusiasts and is happy to allow e-cigs in her establishment. Essentially, she has created a niche market. In addition, her bar operates under the concept of “no crap on tap.” Twenty beers are on tap and all are of exquisite quality in the craft beer world. Even better, half of which are local brews; West 6th, Country Boy, Blue Stallion, etc. This bar is a haven for locavores. Now it’s safe to say that Diane will retain a large chunk of loyal customers. after the e-cig ban, but here is what is unknown –

  • How many customers will she lose because of the e-cig ban?
  • How much will the customer loss translate to profit loss?
  • Will the profit loss affect what she can keep on tap?
  • If so, will this affect how much she buys and keeps on hand? Thus, affecting sales with West 6th, Country Boy, Blue Stallion, etc.
  • Imagine there are ten more bars just like Diane’s. How much will this affect West 6th, Country Boy, Blue Stallion, etc. as businesses?

I understand what you’re thinking. Braaaaaad…. You don’t know any of this for fact. I never claimed to, but that doesn’t rule out these possibilities from ever happening. That’s the point that Henry Hazlitt was trying to make. Every economic decision… Every policy… Every move in the market has seen and unseen consequences. It creates a ripple effect. When businesses act, they act with caution because every step made has to be met with customer approval. Losing customers means you lose profits. Losing profits means you shut down if you can’t recover and/or adjust. Politicians do not act with such caution. To politicians, “getting stuff done” is what earns you votes. Gone are the days of government protecting your property and rights. People have realized that you can use government force to get what you want; possibly even affecting the market in such a way that benefits you financially. I cannot say with certain who benefited from Thursday’s ruling, but it wasn’t the citizens of Lexington.