Jay Nordlinger relays a story of free markets in action:
I just had to write and tell you this after reading the letter you posted about feeding hungry workers in the Fargo floods. I live in a neighborhood (I’ll keep the city anonymous so the subject of my story doesn’t get in trouble with the local nannies) that has a lot of construction going on. A wonderfully nice woman drives through during lunch hour selling these great tamales out of the back of her van. It’s obvious to me she needs the income, and the workers (and many of us who live here) love her product. She’s doing a booming little tamale business.
I know what she’s doing is probably running completely afoul of the local health-department regulations. But so what? The first time I bought one of her tamales I figured if I got “the revenge” I’d simply stop buying them. I certainly didn’t need some bureaucrat to tell me she wasn’t operating a clean kitchen. She also knows that if her product gave people the trots she wouldn’t sell any more tamales to anyone, so it’s in her economic interest to cook her tamales in a clean kitchen. Free market, free minds!
Nordlinger calls this “sweet Hayekian music”, because Hayek apparently liked banging an empty box with a stick and shouting the lyrics to Crazy Train at top volume.
Suppose the letter writer’s unicorn-laden fantasy about the functioning of the free market actually worked. It’s the height of begging the question – she’s only selling the tamales because her service is clean, and if it wasn’t clean, she wouldn’t be selling them!
By this logic, inspectors running yearly inspections on restaurants should never find violations – the restaurant would immediately hear about problems and, if they didn’t want to lose every customer they had, they would fix whatever the problem was. Gordon Ramsay would be out of one of his seven jobs, and I could eat at Joe’s House Of Mystery Meat without fear. Finally!
Unfortunately, since human interactions and the market at no point in history have ever worked this way, the more likely outcome is that, without inspectors, the next nice lady selling tamales out of the back of her van will have made her food in her cousin’s kitchen (you know, the one with the huge stove that hasn’t been cleaned since 1994 and all the mice), but it’ll be okay, because at some point in the next few days, the person that she gave food poisoning will stumble out and tell her that they got sick a few days ago. Then she’ll deny it, saying that she makes her food in a clean place, and then she’ll hand her next tamale to someone with her bare, unwashed hands.
And thus will the market work, and your plunger get an awesome workout. Charmin shall be pleased.