Egg Police

As I continue the barn dismantle I’ve had a lot of time to think about…

...the Egg Pulletburo (or "Politburo," aka the "Egg Police").

Out here there is a group of central planners who I call the Egg Pulletburo.  Under many circumstances you cannot sell eggs without one of their permits.  The Pulletburo has established rules which define what to grade eggs for (by size, shape, air pocket volume, etc.), how to grade eggs and how to package and maintain eggs.  There are also unclear rules on when and what info to collect from customers.  They also collect a "tax" (generate an income) by issuing "permits."

After implementing their rules I realized that they consume many hours and significantly reduce profitability.  It also became very clear to me that I didn’t need the Pulletburo because there is an “invisible hand” that forces me to produce the best eggs I can – it’s my self interest (or “greed”).  It motivates me (like many others - in order to provide for a family or "make millions" and improve a standard of living) to do whatever I can to make customers happy.  The thought of an inferior product slipping thru to a customer and losing to competition is troubling.

I asked a member of the Pulletburo if any there had ever raised and maintained layers.  The answer was “no.”  I asked if any had personally implemented their rules and validated them.  “No.”  Had they ever sold eggs?  “No.”  (They do have a director with a PhD - apparently I'm supposed to believe that offers some value even though they have no practical experience in the area they are regulating).

I've concluded that the Pulletburo is not unlike planners in every other sphere of life.  What confounds me is why the average person thinks we can’t live with out them and their rules (because they somehow think planners remove the ill effects of greed?).  The irony is that the same pro-Politburo average person always prefers the benefits of a free market but will not acknowledge its virtues.

A great illustration of this is the telephone.  On the left is hardware that central planners of the former USSR would be proud of, on the right is the version the average person craves produced by the free market.  They both result from "greed."

The problem is that the greed of the planners on the left has no constraint (only their customers do).  Their greed is the impetus for regulations that eliminate competition (aka consumer’s choices) and severely hinder innovation. (Note that while under regulation the phone changed very little in ~80 years until it was set free by Judge Greene in 1984).  Tons of money was made from this phone but only because of legislated pricing and an authority to punish those who didn’t comply.  People will lament that businesses need to give back to the community – and in this case they’re correct.  It’s a great example of a business, in this case a politburo protected monopoly being compensated for way more than the value provided.

On the right the greed of entrepreneurs has a significant constraint: the desires of a customer who is free to choose.  Because of greed they have to identify and implement all kinds of ways to make a customer happy. Who can’t live without a smart phone today?  Its functionality is a thousand times greater than the phone on the left... thanks to greed.  The entrepreneurs on the right are now fabulously wealthy.  Do they need to give back to the community?  No, they already do each time you use the relatively inexpensive phone in your pocket.  You’re late to a meeting you can’t reschedule and you save the meeting by calling ahead.  Need the quickest way to drive somewhere or you simply don’t want to get lost and needlessly burn fuel?  Need to access the Internet?  Want an alert to avoid a flooded basement?  Or when to sell a stock?  Or see who's at your front door from work?  The ways greedy free market entrepreneurs give back to the community are endless.  Greed should be constrained, but naturally - by the freedom of each of us to pursue our self interest.  Sure, problems and lawlessness will still occur but their negative effect is not as broad as with the planners who produced the phone on the left.

Who clamors for these Politburos, consumers or crony capitalists?  Maybe I'll address that after I make more progress on the barn.