May 7, 2003
Austrian Economics in American Retail
There’s a very good General Nutrition Center (GNC) store in Superior,
Colorado. And the Great American Tire Center up in Erie is a great place
for an oil change.
I don’t have the readership to sell advertising. I don’t
even have verbal permission to mention these firms, much less encouragement.
I bring these institutions up because each in its way validates my belief
about economics and politics. Theory in a book is debatable, history
is subject to interpretation, and real life has too many variables to
stand up to rigorous proof. Yet I see proofs on a macro level, all the
time.
The GNC in question is about 15 miles from my house. There are at least
two GNC stores closer and I literally drive by one on the way. But the
store in Superior (I will not be going for the pun in this article,
you can keep waiting or move along slowly…) has a good stock of
Atkins® products and other low-carbohydrate foodstuffs.
Being an Atkins-disciple, I have purchased the GNC Gold Card, entitling
my entire family to a 20% discount on the first through the seventh
of each month. Though it seems odd that a company would encourage you
to wait until next month to purchase products, I ask no questions. I
show up on the first.
A comprehensive selection and adequate supplies are important for these
monthly shopping excursions, I think my great-grandparents probably
went 15 miles to buy supplies every month; it’s just a low-carb
return to my roots. Mysteriously, the other GNC stores are not well
stocked on these products. They are ascending in popularity and the
suppliers are unable to keep up. The Atkins section of the closest store
looks like a fresh fruit display in the winter. That would be the winter
of ’43. In the Soviet Union.
I complimented the manager last week. He thanked me and made some comment
about the company stores’ having a tough time. He said that these
products are tough to get and that he expends serious effort to keep
supplied. Visions of Hayek, Mises, and Adam Smith danced in my head
all the way home.
I about dropped the flaxseed granola when I remembered the lady from
the other store saying that she begs the buyers on conference calls
for more of these products. Aha! The good store has the knowledge of
his customers’ needs (Hayek – distributed knowledge), makes
his own purchases (Mises – sphere of influence), and buys those
things that will make him the best profit (Adam Smith – the invisible
hand). The corporate store is centralized command and control, shipping
the same package to each of its stores (I’m thinking Lenin here,
but I am no expert).
In the end, I get the products I want, the wise and industrious store
manager earns profits above his corporate neighbors, and the manufacturers
are incented to produce a greater variety of muffins and candy and syrup.
After a few months it all makes sense -- now if I only knew what they
put in that low-carb pancake mix...
Next week: State Coercion Every 4,000 miles.