[Editor’s Note: The following piece is by TDV Editor, Gary Gibson]
Like every well-adjusted human being, I love getting stuff. I love being able to shell out the money I've won or earned and participate in the market system that keeps producing all sorts of goodies that constantly improve the quality of material life.
And now the time of year has rolled around when buying stuff becomes something between sport, spectacle, and duty. Whether religious or not, the holidays are outright magical, especially in those climates that spawned the reverent observance of winter and the cold, dark part of the life cycle in the first place. The much (and stupidly) maligned commercial aspect of Christmas can be seen as the struggle to make life comfortable even when the reminders of life's ultimate nature and ultimate results are closest.
It's the marriage of the sacred with material acquisition. And as usual you can count on the politicians and their economically muddle-minded enablers to kill the buzz. A few days ago The Daily Caller reported on a little free market-killing line added to the endlessly annoying annual National Defense Authorization Act which would seek to add a sales tax to online sales. That's annoying enough. But it's the federal government and economic illiteracy should be as expected as spectacular hypocrisy and violence. What caught my eye and my ire was this passage:
“…A recent poll indicates that the majority of Americans support the idea, describing an online sales tax as 'common sense'. They also feel that a tax for online purchases would encourage people to buy local and keep tax dollars in their community.
“'Local retailers invest in their communities and play a significant role in the overall quality of life in the places we call home,' said Betsy Laird, senior vice president of global public policy for the International Council of Shopping Centers.”
Jiminy Christmas, I am sick of this “buy local” nonsense. And I am sick of how incredibly economically illiterate and pro-tax Americans can be.
First of all, let's dispense with the obvious. This tax, like all taxes, would be an attempt to influence behavior, to force people to make economic decisions that create winners not decided by the market but by government policy. This tax, like all taxes, is theft with the intention of politically influencing an outcome instead of letting individuals (the market) sort out the winners and losers.
But in this particular case, the tax is an attempt to eliminate one of the great powers of the Internet. The Internet has allowed people to make connections that transcend the old models and the state itself with its usual confiscations.
The “buy local” stuff is a fallacy born of short-sightedness and midwifed by a gullibility for trite phrases like “buy American” and “support our troops”. First let's look at the argument taken to the absurd levels. Why limit economic transactions to within a certain arbitrary perimeter, like the nation-state or the township? Imagine if your local car dealer only “bought local”, if he refused to buy a car whose materials weren't mined in town, whose parts weren't crafted and put together in the local factory. Same goes for your grocer. What if he only ever bought animal meat or milk or produce from farmers within 10 miles of his shop, even if buying from another 10 miles out allowed him to provide similar quality for lower prices? Or maybe the “buy local” people and the politicians would be okay if the materials gathered where in the same county, or state, or country? Where does it stop? How many economic bad decisions have to be made to satisfy the arbitrary notion of local-ness? How much higher pricing do we put up with? And what counts as “local”, anyway? What the politicians or your dumb neighbors decide. Why not let the individual consumer decide where and with whom he should spend his money?
There is room for the local merchant alongside the online one. And turns out neither your neighbors nor local or federal government has to get involved. It comes down to basic economic factors of consumer choice and time preference. Left to his own devices, your local merchant stocks the kinds of things he calculates local folks will want immediately at the quantity and price that will attract enough business to make him a profit. He won't stock those items that people would rather buy online at lower prices and for which they don't mind waiting for shipping. The online merchant is just another competitor in a sea of competitors and it requires no special legislation to deal with. Just the usual business sense. The consumers and the merchants can work it out themselves. Some things make less sense to buy at the store in the age of the Internet merchant. There's nothing to fix here. The market adjusts itself.
Does this mean that there may be smaller and fewer Main Street businesses? Maybe. But this needn't be a bad thing! People apparently eat up the tear-jerking primetime drama of the mom-and-pop going out of business because some corporate chain moves in. But those evil chains provide good jobs and benefits to hundreds and thousands of other people. They also serve their customers with obscenely large selections and lower prices. Thanks to the mom-and-pop-killing chain, consumers in a given community are left with more money to spend on other things, like physically improving their local surroundings. Mom-and-pop can stop overcharging their customers for a limited selection and instead contribute their labor to something that serves everyone better. Maybe they can get a job with benefits at the new corporate chain.
We must remember that no form of business is sacred and impermanent. And we should be glad about that! Thank god refrigeration has transformed the open air market. Thank heaven for climate-controlled centralized indoor shopping in the dead of winter and heart of summer. And we should be glad that certain businesses are no longer needed and have died – like the ice delivery man who provided ice for the ice box, or the urban horse carcass-removal service. And we shouldn't mourn as certain businesses contract and die. It's a part of the process as the technology and the markets lift our lives to higher levels of convenience, efficiency and affordability.
A perfect example is the physical bookstore. Nostalgic people who are also economically illiterate weep at the idea that the brick and mortar bookstore will become a thing of the past. Congressman and dunderhead Jesse Jackson Jr. made quite the stink last year about this very thing when he blamed the e-readers for killing brick and mortar bookstores. You can download just about any book into your PC or electronic reader, or if you still like the touch and feel of physical books, you can order the physical version online and usually for cheaper than the bookstore downtown will have it. Plus, it will be delivered right to your door.
But there will still be a market for people who want to go downtown and get their books immediately instead of waiting for them to ship. Just as there will be a market for people who rather rummage around a bookstore than shop online. No need to create choice-altering tax policy to punish evolution. People will act according to their innate preferences and the market will adjust the supply of brick and mortar bookstores accordingly. To try to force the outcome would be as outrageously stupid as providing tax breaks to horse-riders over car-drivers to satisfy some romantic notion that cities full of horses are horse-drawn carriages are what everyone would or “should” prefer.
It's a matter of letting the market be free to do its thing, which is an economist's way of saying let people make their own choices with their money without the political pressure of prohibition or sales taxes…let things shake out as they will in response to consumer demand. That doesn't mean corporations buying regulatory favors from the state to reduce competition. It merely means letting people choose what's best for them in their own estimation.
Quite simply, maybe it's time for there to be fewer mom-and-pop shops.
Look around your house right now. Look in your garage. Look in your refrigerator. Ask yourself how much poorer your life would be if you could only buy things bought locally. Perhaps there are some things that honestly make more sense for you to go to a store and buy locally, but wouldn't you rather figure out what those are for yourself than have your neighbors and their political hacks decide for you? Why on earth would you support taxation that funneled your money toward businesses that don't serve you as well as others could? Are you counting on those businesses recycling your money into a civic tax base? Without getting too dogmatic and preachy about voluntary funding as opposed to taxation, let me just point out that the hope of recycled tax money is the hope of un-guaranteed positive outcomes arising from theft. You might be a lot better off paying for local improvements with a pool of like-minded neighbors than sending the money to city hall and hoping for the best.
Makes me wonder what are they going to say as 3D printing vastly reduces then eliminates the need for centralized manufacturing? Are they going to tax 3D printing so as to make buying from manufacturers more attractive and thus save unnecessary manufacturing jobs? Actually, yeah, they probably will.
In any case, enjoy the Shopping Season to the fullest and enjoy the tax-free nature of it all while you may. This may be the last Christmas you can do so until the inevitable collapse of the inefficient and ever-violent state.
And by the way, just as your purchasing dollars shouldn't “stay local”, neither should your purchasing power. It's up to you to keep your purchasing power protected from malicious politicians and your numbskull fellow citizens as possible. TDV can help by getting your money into cozy and safe offshore accounts. Click here to learn more.