Posts Tagged ‘markets’
Red brick, green brick
An abandoned brick building near Choteau and 14th in St. Louis. Photo by Bill Keaggy.
A while back, I read that brick buildings in St. Louis were being burned down so that the bricks could be stripped, shipped south and sold:
But the blaze, one of 391 fires at vacant buildings in the city over the past two years, may have had a more sinister cause. Law enforcement officials, politicians and historic preservationists here have concluded that brick thieves are often to blame, deliberately torching buildings to quicken their harvest of St. Louis brick, prized by developers throughout the South for its distinctive character.
“The firemen come and hose them down and shoot all that mortar off with the high-pressure hose,” said Alderman Samuel Moore, whose predominantly black Fourth Ward has been hit particularly hard by brick thieves. When a thief goes to pick up the bricks after a fire, “They’re just laying there nice and clean.”
Driving through downtown yesterday I found myself thinking about this, because downtown St. Louis is littered with abandoned, bombed-out warehouses and factories made of this same brick. There are a lot of them, butting right up against attractions such as Busch Stadium, and they are a significant source of blight in the area. To the extent that St. Louis has a crime problem (and it does), these big, empty buildings aren’t helping make things better.
Presumably somebody owns these properties and pays property taxes on them, or the city owns them. Either way, if this St. Louis brick is in high-enough demand to warrant burning houses down to steal it, why not tear these things down and sell the brick? They’re in no shape to move new businesses in anyway — if something were going to happen in these buildings they’d need near-total renovation. Perhaps there’s a good answer to this, but I’m not sure what it might be.
Filed: Super Special Questions || 14:44, June 1 || View Comments
Assumed technological innovation in the free-marketeer worldview
Following up a bit on the last post, it occurs to me that the idea of “perfect information,” which looms so large in the free market model, is something that we’re actually very close to in the age of information digitization. Specifically, bar codes and hand-held scanners should conceivably allow distributors and merchants to monitor not only minute-to-minute inventory, but also purchasing patterns over time. If a situation like the one that raised my ire yesterday were to occur, this technology could easily be used to alert the store to ask the distributor for more of Product X, or to alert the distributor to just show up with more next time. This would be a valuable system, at least at some scale, because every time this particular inefficiency happens, somebody is losing $4-5. In a competitive market, it’s to Coca-Cola’s benefit to keep me from going my next preferred parity product, sold by PepsiCo, and it’s also to Grocer X’s benefit to keep me from checking the shelves at Grocer Y.
But clearly if such a system exists in the world of retail sales, it’s not being employed by either of these two grocery chains. And it strikes me that part of my annoyance here is that I know the technology exists (both because I’m a technologist by trade and because versions of it are featured in ads from IBM, UPS and others) and I reflexively expect it to be in use. I wonder how much this view exists out there in general, and specifically among strong free market theorist-proponents — I’m thinking specifically about the Reason-types who are happy to argue for free markets based on abstraction and theory. The market and the information here and qualitatively different than those that are found in high finance, insurance and exchanges, to be sure, but the principle of efficiently organizing and providing relevant information is the same.
Filed: aka Syscrusher || 22:24, April 23 || View Comments
Market failures in perspective
Clearly, consumers just want sugared drinks more.
The thing that takes a while to realize about Carbondale is that the city’s small size isn’t its most impactful feature — it’s the disconnectedness. We’re 15 miles from the interstate to our east and 40 miles from the one to our north, and the state highway corridor we’re located on features only other towns that are smaller than Carbondale. It’s not cheap to ship stuff in here, and as a result our selection of consumer products, and groceries in particular, is terrible.
That makes some sense, but what astonishes me is the terrible way firms in this market respond to consumer behavior — given the cost of getting products into this market, I would expect firms to do everything they can operate at high efficiency (note: I’m not an economist, so maybe there’s a really good reason for them to operate inefficiently that I don’t know about). But every time I set foot in the pop* aisle at either of our local grocery stores, I’m more and more convinced that nobody cares what consumers here do. You can see this in the discrepancy in stocking and restocking of sugared and diet drinks.
I’m a huge fan of Vault Zero, the low-calorie version of Coca-Cola’s high-caffeine citrus soda. Now, regular Vault is not a particularly high-selling brand, and if the market is more interested in sugared than diet, you’d assume that Vault Zero would be even more of a niche product. What this doesn’t explain, I don’t think, is the tendency for both our stores (stocked by the same distributor, I’d assume, so we’re really talking about one point of entry for these products) to frequently sell out of Zero and sometimes go weeks at a time without restocking. But lest this come off as the screed of a lonely, atypical consumer, I note that many other diet brands go through the same cycle here — low stock, frequent short-term and occasional long-term sell-outs.
What prompted me to really think about this, though, was the sight pictured above, seen this morning in one of our stores. Regular Mountain Dew is given three times the shelf space of Diet Mountain Dew; the diet sells out, while the regular has sold one unit since restocking. And in general, it’s clear that strong consumer demand exists for diet drinks. If we’re concerned about the effects of high-fructose corn syrup intake through beverages, and if we’re going to just chalk American obesity up to freedom of choice, shouldn’t we be looking at how free those choices are, particularly in the commercially disconnected rural areas that are home to so much of that obesity?
* To my fellow Michiganders: I’m trying to fight the good fight, but ten years in Wisconsin has really given “soda” a lot of weight in my brain.