Friday, August 18, 2017

I Just Got Price-Gouged and I'm Still Smiling

By Allan Stevo

It was a temperate summer day when I went down into the New York City subway. As I came up at Union Square there was a downpour. It was so thick with people who were standing under cover trying to avoid the deluge that one could barely get up the stairs.

The MTA claimed an 80-year-old subway signal had broken. The trip took twice as long as it usually does. I now had to be somewhere and didn't have the time to wait on the summer downpour to ease up nor did I want to get soaked traveling the next three blocks. Who knows when I would be able to hurry home during such a jam packed day to change out of the wet clothes. This was a real mess and the increasingly heavy rain was now starting to come into where I was now standing to momentarily deliberate the situation.

If only there were a solution.

Lucky for me, there was. The free market will provide if you let it. Standing eight feet from me was an unlicensed vendor in a poncho selling umbrellas for "five and ten dollars."

He was selling approximately 15 umbrellas each minute.

Then two police officers emerged from the subway, tasked with the job of preventing illegal activity. I watched the NYPD kindly ignore the illegal behavior of the unlicensed man as they walked by him and his many customers.

The best thing that those two police officers probably did that day was to ignore what they saw. Fifteen customers a minute during a one hour deluge, means that an estimated 900 people may have been served by that man and his supply chain this afternoon alone. Nine hundred people whose lives were made noticeably better, quantifiably better because that man had the idea to sell those umbrellas, took the risk of buying all those umbrellas, and went through the trouble of being in the right place at the right time with them while standing in the rain and keeping his fingers crossed that the police wouldn't bother him or confiscated his inventory.

In enforcing the law, the police would have created at least 901 victims — the vendor who was providing for the wants of the local marketplace, and the customers who wanted to remain dry while traveling on foot outside during a downpour. If those estimated 900 people could not get umbrellas that afternoon, in the downpour, an additional unquantifiable number of people would have been affected — the people involved in the meeting they were running late to, the business that may have been canceled or delayed as a result, the job they may have arrived late to that was counting on them, the child who would have to deal with a cranky wet parent, the parent who would have to deal with a cranky wet child, the elderly man who may have gotten sicker in the rain and the family that worried about him and cared for him, the tourist who went back to the hotel to change instead of going up to the top of the Empire State Building with her dry friends.

In concretely helping those 900 consumers concretely get what they wanted, the umbrella vendor did a great deal of service today, likely far more service than either of those police officers, perhaps far more service than the entire precinct that day, likely a greater net benefit than the entire police force during that one hour period, possibly more net good to society than all public servants in New York that afternoon. Yet, the entrepreneur remains the unsung hero in society, the man our elected officials write laws for the police power to enforce against him and his consumers, rather than to allow him to satisfy the wants of the consumer uninhibited by anything other than the powerful regulator that is the marketplace. He is the man who must worry about many concerns that elected officials place on his plate that have nothing to do with benefiting the consumer.

He is the great hero — the umbrella vendor, as simple as his work is. The risk takers out there doing the exact same thing on a smaller scale or a grander scale are the unsung heroes as well — the entrepreneurs out there trying to help society, motivated by a chance to make a profit while expending a great deal of effort complying with the authorities. Authorities, who, like in the case of the umbrella vendor and the police, do the greatest net benefit to society not by doing their job, but instead by not enforcing the many onerous laws on the books — yes, the police do the greatest net benefit to society in many situations by not doing their jobs.

It's bad enough we are forced to fund the many government authorities — for their work today, for the time and a half this weekend while they work overtime, and in 20 years with a generous lifetime pension — the least they could do would be to leave the imposition at that and to leave the marketplace free for entrepreneurs and consumers to freely interact. But no, we have to at once pay them and at the same time get the great loss to society of some of them doing their jobs and infringing on the marketplace. It's the double jeopardy of hiring a public servant — the cost to society of them showing up for work and the cost to society of them doing the job they were hired for.

Today I paid $10 for a $3 umbrella and I write this to you as a dry, happy man, praising the free market when it is allowed to work and praising its participants — the peaceful onlookers not attempting to intervene, the eager consumers, and the profit seeking umbrella vendor.

Allan Stevo is author of The Bitcoin Manifesto.

The above originally appeared at

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