JUNE 01, 1979 by JESS RALEY
Mr. Raley is a free-lance author, speaker, philosopher from Gadsden, Alabama.
"Now that’s amazing strange," the old man said as the king snake not so much slithered as rolled away after killing and swallowing another snake that appeared to be about the same size. We—six or eight boys and three men—were skinny-dipping that long ago day and had watched, off and on, for hours as the king snake killed and swallowed its adversary. Since that time, in my own mind, the superlative of anything unusual has been "amazing strange." But it was almost fifty years before I experienced another incident that seemed to qualify completely.
In the state where I live the retail price of milk has been controlled for years by an organization generally referred to as the milk board. This organization did not set a maximum price. A grocer could sell milk for as much as the customer could be persuaded to pay, but for not one cent less than the minimum figure decreed by the board.
There was one place, a convenience store on U.S. 11 in the northeastern part of the state, that insisted on setting its own price on milk. The schemes this villain attempted in an effort to circumvent the laws passed by the milk board made good copy. From time to time the whole state was treated to a blow-by-blow account, via press and radio, of the latest confrontation between this rebel and the bureaucracy. Since the grocer always seemed to lose, these accounts were very hard on the blood pressure of all devotees of a free market economy.
No real challenge to the milk board developed until a large interstate chain lowered the price of milk about fifty cents a gallon overnight. This lawless reprobate was brought to bay in short order, of course, but not before another chain had entered the contest and sold milk, as a leader, for $1.19 a gallon—until the law moved in.
The First Round
The milk board won the first scrimmage as expected, with arrests, fines, and threats of cutting off supplies. After all, this is a nation of laws. But these actions did get the matter before a court. The chain manager who had first defied the law placed ads in various papers stating that the milk he was forced to sell in this state for more than $1.80 per gallon was obtained from the same source, at the same price, as milk sold in adjoining states for about $1.30 a gallon. This information was something less than a news break, since most everyone had known or suspected as much. But when the case came to trial, the court’s decision was certainly a surprise bordering on astonishment. The judge found that the milk board, because of some technicality, was illegally constituted; therefore, the laws invoked by it were null and void.
In this age when more and more snoopervision makes the free market less and less able to function, I hold that this court’s decision was amazing strange. In the first place it injected a wee small fissure in a solid wall of laws, many years long, calculated to harass the theory and practice of a free market economy. Secondly, there is little if any political clout to be gained by encouraging the uninhibited exchange of goods: no positions created for friends, relations and supporters of the in-gang; no potential outstretched palms made available to producers and distributors. Yes, this was truly an amazing strange thing for a man of law to do in this day and age. And what was to be its effect in the market place, upon the consumer and producer?
For the first few weeks most all grocers sold milk, as a leader, at about cost—or perhaps a few cents less as some of the large chains butted heads. The price hovered around $1.20 a gallon for some time. Then, as one grocer after another tired of the game, the price slipped into its natural slot at about $1.35, where it remained until forced up gradually, along with other produce, by the unrelenting pressure of inflation.
I watched this process from the corner of my eye, as it were, fully expecting the superficial philanthropist of the milk board to bring forth a new law to protect all and sundry from the ravages of a free market. When no new law was forthcoming after several months, it appeared to be time to look at the other side of the coin; after all, a reduction of almost one-third in the price of an item must be assumed to squeeze somewhere.
Processors and distributors are reluctant to discuss the matter on a dollar basis, which is their prerogative, of course. Those to whom I was able to talk were definitely in favor of price control, minimum price control, that is, on their products. Insofar as I have been able to determine, however, none of the state’s distributors has quit or gone bankrupt.
The dairymen who produce milk—feed and milk the cows, clean the barns, mend fences, sow pastures, put up silage, ad infinitum—were much more willing to talk. After all, these rugged individuals often work ten to twelve hours a day, seven days a week, in a valiant effort to make ends meet; they have nothing to hide. As a matter of fact, the price of milk at the farm was not cut when the milk board was ousted, so the actual producer is no worse off than before. Naturally, milk producers would like, and think they should have, an increase in the price of their product. But, at present feed grain prices, those with whom I talked admitted that they were not hurting unduly.
So, draw your own conclusions as to what happened to the extra fifty cents for each gallon of milk sold when the board was in command. Without this boon, the producer is no worse off. Processors and distributors are still in business and apparently doing well. The grocer is still happy; he can sell milk as high as the market will stand or run it at cost to draw more customers. Needless to say, the consumer is better off and one would think a wee bit happier.
The price of milk has inched up since that time, about the same as other foods to keep pace with inflation. But it is still about fifteen per cent less than it was two years ago, and the shortage predicted by the milk board has failed to materialize. Faced with evidence of this nature, one may ponder what the bottom line would look like if all laws that inhibit the voluntary exchange of goods were struck down. More specifically, what would it be like to live in a free market economy?