The Free Market Miracle...in My Basement
Drilling, sawing, grinding, and Spanglish. These are the sounds that emanate from my musty, leaky basement on this fine morning. Fear not readers, my basement is not under attack from those crazy Mexican terrorists that Rick Santorum warns us are lurking (a warning that three states apparently heeded this Tuesday). The activities below me are the result of a voluntary transaction where I indirectly transferred my software and supply chain domain “skills” for a dry, mold free basement. Indirect transfer of goods and services is why I can work in a niche software market and still convince skilled contractors to spend 2 days in my dingy cellar scrubbing the block foundation free of mold and digging up almost a century’s worth of dirt and grime to fix my water problems. In a world of direct transfer (barter) this would not be possible. I could not provide a basement waterproofing outfit anything they need with my professional skills in trade for theirs’. My ability to troubleshoot software system issues, analyze a distribution operation, or navigate the bureaucracy of a growing company offers the gentleman working away down there no benefits. This is not a revelation to anyone, it is common sense. You don’t need a high and mighty, self-loathing, blogger to tell you this. So why am I? Maybe I am out of ideas or with Santorum sweeping 3 state contests this week I don’t want to touch politics with a 1000 ft pole? Possibly, but I think it bears mention because it is an excellent example of how the free market allocates resources among a seemingly random chain of events. This miracle of orderly chaos, especially throughout academia these days, is often lost on many. The cause and effects of this transaction reach far beyond my desire for a mold free environment.
Based on my limited time, ability, knowledge, and tools for the job, I made the decision that my total cost (opportunity + actual) of “Doing It Yourself” was $XXXXX.XX. After recommendations, research, and an array of estimates, I found a provider that gave me the best price, timeline, system, and assurance. This provider’s price, while of course higher than I wanted to pay on something so intangible, came in well under the DIY total cost. The abilities and knowledge of 30 + years of doing this sort of work limited my exposure to rookie mistakes that almost certainly would have resulted from my stumbling efforts. The lifetime warranty attached to the price tag was a competitive advantage that could never be recovered if I were to go at it alone. But besides these personal benefits and decisions, what is so remarkable about this transaction that I feel the need to label it a “miracle” of the free market?
Everything. Let’s start with the availability of suppliers. My search for a waterproofing specialist was a difficult one. Not because it is such a specialty that there are limited options, but because when I googled, angie’s listed, and service magic’d basement waterproofers, a 20 mile radius provided about 20 alternatives. Supply was not the issue, selecting which supplier was the real problem. The availability of so many choices offered me not only a difference in price, but a difference in approaches as well. Some were cookie cutter national resellers placing a one size fits all type solution in a space that called for some creativity, like most basements built in 1922. Others seemed to take a more scientific, customized approach to address the problem. In the end, I went with this service because their solution was more tailored to my needs, more permanent and proven, and offered a lifetime assurance on their work. They did all this for less than the other suppliers and my DIY cost. The estimated health and equity benefits from the transaction far exceeded the cost of the investment.
The actual materials and efficiency they are using down there is also a marvel. As I’ve mentioned my line of work centers mostly in the shipping and distribution business, a complex effort that can be lost on you until you realize there is an entire industry dedicated to it. The piping used in the drain they are digging around the perimeter is industrial grade equipment used to drain airports that was manufactured in the mid West with materials from across the Pacific. The rocks used to filter the water around the pipes reached my driveway from a far off quarry that some other local business bought from another business that imported them from a foreign business that transported them from that original business that mined them from the ground. All the equipment being used, from generators to jack hammers, are well organized conglomerations of specialized parts and systems from around the globe assembled by many hands. The mold treatment being used is a non toxic material that effectively combats nature’s penchant for growing bacteria in damp areas making safe sterilization possible for millions of hospitals and homes let alone my basement. The enormity of this effort might not spark the desired empathy with some, especially those who haven’t had their basement’s waterproofed, so let’s discuss these principles in terms of something to which we can all equate, a super market.
It is February at the time of this writing. I plan on going to the local Acme or Shoprite to do my weekly grocery shopping tomorrow night. When I walk in the front door, I will be greeted by a range of fresh(ish) fruit and vegetables. Apples, blueberries, strawberries, cherries, zucchini, celery, tomatoes, all lain out in front of me with the closest harvest some 2500 miles away. Some racks offer me the tropical options of pineapple or coconut, while others green to fully ripe bananas; stuff that doesn’t even grow on my continent let alone in the winter. A turn at the end of the produce section will reveal the meat department. This department is further divided into Pork, Beef, Veal, Poultry, and some other miscellaneous combinations of them like sausage or ham. Not only was this food grown and nurtured by someone somewhere, but it was harvested, butchered, cleaned, packaged and sent here for you ready to be cooked by them too. In some cases, even that’s done for you. The examples of market forces are astonishing down every aisle when you start to view the store for the logistical marvel that it is. From the frozen section with its ready-made dinners, vegetables, and Ice Cream, or the dairy aisle with more cheeses, creams and milks you even knew existed, the examples are on either side of every row. The cornucopia of goods at your fingertips all arrived via the efforts of multiple entities that held some small stake in Saturday night’s dinner. This is something that never seems all that amazing because it has become our standard life scenery. If you are under 50 from a major US metro area this has been your normal existence since you can remember. But the range of goods available to us at reasonable prices is absolutely astounding once you take a second look. This abundant allocation of resources is a true human triumph that is unmatched in our knowledge of the history of civilization.
One of the most impressive lessons about this project is a more recent free market phenomenon. The amount of information available about not only the contractors, but also their processes and materials is an awe inspiring product of market forces. I have a good memory for the days when researching a subject as popular and well documented as Robert E. Lee for a term paper was a time consuming and daunting task. You had to go the library, know something about the Dewey decimal system, and find books or periodicals using a few certain key words on printed note cards only to scan through every page of that finally found text for specific info. The process now involves typing a few letters of a word into a text box. You don’t even have to type in the full word anymore! Once you have found your material and it contains a word or concept you don’t recognize you can quickly search it as well. The rabbit hole of knowledge is easier to navigate than ever. You can find out so much with so little effort. You don’t have to highlight sentences or scan through hundreds of pages for a few select words anymore. Instead you can press Ctrl+F and search entire documents for specific words or phrases in milliseconds. This will be the next generation’s standard. They will take for granted the informational wealth we still appreciate much like our generation’s entitled attitude toward the abundance of grocery and consumer goods.
The natural regulation that emerges from this wealth of available information is a case study in the market’s ability to manage itself responsibly outside of government monopoly regulation. I could view customer comments, BBB ratings, testimonials, and even blogs in some cases. I found videos showing me the difference between a few different water proofing methods and discussing their pros and cons. My decision was based on the regulations of common consumers and their market penalties and rewards. Consumer information and education has never been more accessible. Can you imagine a software guy so quickly learning that much about basement drainage system from his living room 30 years ago? Or getting someone to do the work with such efficiency just 50 years ago (they are just finishing up the whole mess after only 6 hours)?
We are constantly demonizing the free market because we have experienced its benevolence all our lives and accordingly take it for granted. As a result, we often look to the negative impacts it has on our life. Despite its issues, it is important to recognize all the wonderful results that such a system grants us and remember that it continues to do so in innovative ways. We have reached a point of such excess gross output in mankind’s historic struggle to produce enough that we are actually facing societal problems caused by too much instead of too little. This is a relatively new world and was only achievable when centrally planned, oligarchic societies gave way to freer enterprise systems. This is what all that noise in the basement makes me think about. For your own proof in the success of free markets, just open your eyes at your everyday transactions.
Most importantly, never take for granted the money that enables a random skill set like my own to trade for a specialized skill set like the water proofers, or for necessities like your groceries. The errors of a barter system may be transparent enough for a child to understand, but the errors of a paper money system lurk stealthily in the shadows for even the most educated of men.
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