Last week I wrote about the taxi medallion system in New York City. In it, I called out the city in no uncertain terms for profiting off the sale of entrance to a monopoly industry and then failing to maintain the monopoly conditions. I argued that whether or not you think the city should be limiting the number of taxis, their treatment of medallion owners was improper. In response to the piece, a good friend commented on Facebook that he tries to keep this unfairness in mind when choosing between different modes of transportation in the city. If you know me in real life, you know that I spend a lot of time talking about and failing to live up to a consistent ethic of consumption. Where is your food grown? How are your clothes made? Can you buy that phone / computer / shirt used to cut down on waste? And, yes, if you think Uber is a rotten company, have you stopped using their services?
Yet, when it comes to the taxi medallion system, I didn’t immediately feel like this problem of the medallion owners was one that individual consumers have the responsibility to fix on their own. Considering how important I think personal consumption choices are, I was surprised by my own reaction. Here’s where I’ve landed on my thinking: the problem of the taxi medallion doesn’t arise from different companies playing by the same set of rules. There are, in fact, two sets of rules: one for taxis, and one for companies like Lyft. I do think the government can set up systems in which rules are different for different companies if a public good is served. For instance, it seems proper to me to subsidize green energy companies: while doing so distorts the energy market, a clear public benefit (cleaner air) is achieved. In the case of the taxi market, though, their is no public benefit to the tilting of the playing field. So my working thesis is something like this: a problem is always the government’s responsibility when the government has intervened in the market without any public benefit. In such cases, talking about the responsibility of the consumer doesn’t do very much good (to be sure, personal choices still matter here. It’s just that it’s unlikely to lead to an ultimate resolution of the problem). I’ve also got an article from the Guardian in July talking the about the distinction between collective and individual responsibility vis-a-vis climate change banging around somewhere in my head, too, without really knowing how it fits in. I recommend the article, though.
As luck would have it, an example of public outrage over something that is well within the domain of consumer responsibility. While I’m sure that your social media diet isn’t quite as urban news heavy as mine, you may have seen the uproar about a new start-up called Bodega:
If you’re somehow too busy to watch that video and yet have found the time to read this blog, the product is basically an elaborate vending machine. The company’s founders, to ex-Googlers envision their box in apartment and office building lobbies, gyms, and other vending-machine-friendly locales.
A lot of ink has been spilled in the past week about how dumb the idea is. There are articles calling it out for cultural appropriation, we’ve seen odes to the local corner store, and the ever-popular bodega cat (from whom the new company derives its logo) is enjoying a particularly bright spotlight on social media:
— Bodega Cats (@Bodegacats_) September 15, 2017
The company also released an apology in which they bewilderingly wrote, “Rather than disrespect to traditional corner stores — or worse yet, a threat — we intended only admiration.” The idea that they don’t want to compete with actual bodegas is laughable – of course they do. Is that a bad thing? Not necessarily, but it’s what they’re doing.
I don’t want to spend much time talking about why this company’s branding was stupid. They should have known that people would flip out about them using the name and symbol of the exact type of store they’ll be competing with, and how the optics of an automated box versus a community establishment are bad. Other, smarter people than me have commented on those aspects, and I have little to add there.
What is certain, however, is that when the social media furor dies down a product like Bodega will eventually come to market. Whether these two doofuses are the ones to pull it off or not, eventually a company will release a souped-up vending machine. A smart company will do it without explicitly drawing attention to the fact that they’re competing directly with the corner store, but the fact will remain: you will be presented with the option to buy something from a vending machine that you would previously have bought from a bodega. In this situation it really will be your responsibility to choose which to support. Government policy1 won’t here be making one option artificially cheaper or more convenient than the other like it does in the taxi vs. Uber battle.
We are chronically bad at quantifying how much we value things (my business card says “Economist” so I can make claims like that). We’re also really bad at tying together purchasing decisions and their impacts on the larger community. The issue at hand gives us a great example. In response to our fearless leader’s travel ban, about 1,000 Yemeni-owned bodegas closed throughout New York on February 2nd (good data is hard to come by but bodegas are overwhelmingly owned by immigrants). Many of the people currently crying out against Bodega likely supported the strike and were critical of the travel ban. But does our support for immigrants color our decision about whether to buy a tube of toothpaste from a vending machine in our building or the corner store?
Similarly, many people are upset with the idea of a vending machine replacing the human (and cat) interactions that are the hallmark of any half-decent bodega. But do we value the human interaction enough to spend an extra dollar on that tube of toothpaste at the bodega? An extra five dollars? The toothpaste, of course, doesn’t necessarily cost more. You’re getting toothpaste and supporting immigrants and supporting a local institution – and paying money for all of them. If you do all your shopping on Amazon, you don’t get to lament the demise of the corner shop; you’ve decided that the value of the store isn’t worth the incremental price you pay to shop there2.
I’ll be the first to raise my hand and admit that I fail to live up to this standard. I value local businesses, and yet I still buy things from Amazon. I want to support public transportation, and yet I took an Uber to an early flight. And, no, I don’t always feel great about spending $5 on a half-gallon of milk even if it does support Angelica. But I’m trying, slowly and painfully, to draw the connections between where I spend my money and what sorts of companies are able to stay in business in my community. Let’s hold one another accountable, and push to move from a model of thinking not just about the direct benefits to us of our purchases (toothpaste on toothbrush) to the wider benefits (eyes on the street; a store within a two minute walk that’s open 24/7; employment for marginalized community members). Under our current market-based economic system the government isn’t going to step and nudge us to buy things that support our communities. Once the playing field is level, the choice is up to us. Where we spend our money determines the face of our neighborhoods, cities, and country.
I’m hoping to hear your thoughts. Am I over-emphasizing individual responsibility and understating the government’s responsibility to nudge us toward outcomes that are best for public good? Does my distinction between the state’s responsibilities in level and unlevel playing fields make sense? Let me know what you think, and how you approach developing an ethic of consumption.
1 Reasonable people can disagree with this argument. Bill Gates, for instance, wants robots to pay income taxes, because our current taxation system rewards companies for replacing humans with technology, and would thus make vending machines cheaper than staffed corner stores. Others have argued, rightly, that government policies in zoning laws about where stores can operate, and how densely populated neighborhoods can be, artificially drive up the costs of running a bodega. I sympathize with both of these arguments. They point to the fact that there isn’t really a clear-cut distinction between “this distortion is due to policy and therefore needs to be addressed by the government” and “this is a fair market so it’s up to me to choose where to spend my money.”
2 Our responsibilities shift, no doubt, based on our wealth and income. Someone able to save money or who has a large budget for leisure obviously has a bigger ethical responsibility to pay extra to support their communities than low income folks.