Designed to Fail

George Mason University economist Donald Boudreaux wrote a post earlier this week describing a hypothetical world in which groceries are distributed the way that we currently offer public education:

Residents of each county would pay taxes on their properties. A huge chunk of these tax receipts would then be spent by government officials on building and operating supermarkets. County residents, depending upon their specific residential addresses, would be assigned to a particular supermarket. Each family could then get its weekly allotment of groceries for “free.” (Department of Supermarket officials would no doubt be charged with the responsibility for determining the amounts and kinds of groceries that families of different types and sizes are entitled to receive.)

Except in rare circumstances, no family would be allowed to patronize a “public” supermarket outside of its district.

Residents of wealthier counties – such as Fairfax County, VA and Somerset County, NJ – would obviously have better-stocked and more attractive supermarkets than would residents of poorer counties. Indeed, the quality of public supermarkets would play a major role in determining people’s choices of neighborhoods in which to live.
[…] Does anyone believe that such a system for supplying groceries would work well, or even one-tenth as well as the current private, competitive system that we currently rely upon for supplying grocery-retailing services?

You should read the whole thing, but I’d like to expand on Boudreaux’s analogy to show that such a system of public supermarkets would not only be inefficient, but also inherently inequitable.

Because people would try to buy houses in districts with good stores, much of the price of groceries would be built into the price of housing. The price of housing would rise, but not uniformly. Areas with relatively good supermarkets would become more expensive while areas with very poor supermarkets would become cheaper. Less expensive housing would attract people with lower incomes, and they would quickly become locked into a system of bad supermarkets.

Even if one of the supermarkets in a low-income area managed to improve drastically and become one of the better supermarkets, this likely would not benefit those low-income residents in the long run. The improved supermarket would attract people with relatively high incomes and slowly drive out those with low incomes through increased housing prices. Considering that housing is already the single largest expense for most Americans, tying rents to supermarket service would only further restrict the already limited options for buying food that those with low incomes currently face.

The analogy to education isn’t perfect, obviously. The biggest difference is that people without school-age children don’t usually consider a district’s school system when deciding where to live. That might help to explain why more young professionals are choosing to live in Saint Louis, but the city is losing population among almost every other group. As long as lower- and middle-class residents of cities like Saint Louis and Kansas City cannot choose from a number of quality schools, they will continue to stagnate or decline, trapping the worst in their failing institutions.