(Mises)—As a frequent X/Twitter user, I follow a variety of accounts that touch on a number of niches: whether that is economics, finance, Catholicism, college football . . . or in this case, Lord of the Rings. A popular Twitter account that regularly shares content related to J.R.R. Tolkien’s work broke from character to offer an insight on another tweet. In the tweet he refers to, a food inspector is shown interrupting the business of a diner, which the poster laments. Middle-Earth Mixer, the Lord of the Rings account, offers insight:
The problem with Libertarianism is it leans on the old Marxist adage, “You have to break a few eggs to make an omelet.” Except in this case the idea is, “A few people need to die of food poisoning before we know which diners are good.”
While this may be too much insight for one tweet, I feel it offers a unique question. Is market regulation inferior for relying upon the “breaking of a few eggs?” Are we forced to wait for harm to occur before we act to protect people? Is the government needed to protect people from being poisoned?
Well, first, everyone can acknowledge that poisoning or harming your customers is bad business. The incentive, if one hopes to honestly make a living serving food, is to protect one’s customers, otherwise a reputation will form that will dissuade newer customers. Furthermore, it is not as if one is ever allowed to negligently harm others without restitution. Tort law is almost universally accepted by modern society. If a person or business causes damage to another’s property or their person, they may be held liable even if it is not intentional.
Negligence leads to restitution, thus there is a necessary pressure that pushes restaurant owners to take care and remove possible opportunities for it to occur. Yet, accidents do occur. No business wants to pay for significant harm caused to people because of an accident. Not every business can afford to do so. So how does a business account for this?
Much the same as homeowners, where no one necessarily expects their home to be damaged, insurance provides an opportunity to guard against the worst circumstances. Businesses, like restaurants, have an incentive to be insured against tragic accidents.
On the other side of the transaction, no insurance agency wants to pay out to every business. This is why insurance firms have terms to their agreements. A car insurance company might install a tracker to make sure you stay below certain speeds. It might require maintenance on your vehicle.
Much the same, the insurers of a restaurant may make similar demands: inspections, certain equipment, specific cleanings. All the same requirements without a possibly politically motivated inspector. Political regulation mechanisms fall victim to regulatory capture. Those already established businesses can lobby the regulatory body to favor them over new competitors or increase the cost of compliance. Political favoritism begins to trump true quality control.
Political regulation is subject to problems that market regulation is subject to now. In an insurance model, the insurer is incentivized to maximize revenue through allowing more businesses to be insured and paying out as little as possible, taking measures to minimize risk claims. Thus, the natural market mechanisms will minimize risk of damage.
This is contrary to the government regulatory model. The regulatory model may have requirements and infrequent inspections, but it often falls victim to the very thing thrown into question. Regulatory agencies treat issues in fines. Insurance firms deal in acceptance of payment and promise of coverage. A regulatory agency will often only shut down a firm after its failings—after an accident or negligence has occurred. In many cases, a “few eggs have to break” to deal with problems.
An insurance system is entirely preemptive. An insurance firm does not want to pay out in any circumstances. It will not insure a business that does not meet its requirements. That business will not be able to operate or it will lose everything as a result. An insurance system is not easily bribable, because if it lowers its standards then it will pay out at a massive scale to the barely compliant. Why be a customer at a noninsured business? The insurance system succeeds where regulatory systems fail.
However, there is also a demand-side protection for consumers. Look only at websites like Yelp or reviews on Google Maps. Poor experiences are shared every day, ensuring that customers only visit the highest-quality restaurants. Cleanliness matters to consumers just as much as producers. So, it naturally follows they will demand evidence of cleanliness and safety before they accept food. That is where rating agencies, much like insurance firms, enter to certify cleanliness. Firms, to win concerned consumers over, might pay these rating agencies to review their restaurants.
Of course, they might cheat. The check, however, is that the rating agency may become untrusted and go out of business should it be found out they are deceptive. A regulatory agency like the Food and Drug Administration or United States Department of Agriculture cannot go out of business and as a result fall victim to regulatory capture and corruption.
The market, ultimately, is far more efficient than any regulatory agency in protecting consumers. Agencies that provide information are just as beholden to consumers and consumer safety as the firms they rate. Regulatory agencies lack proper oversight or accountability to provide the same information correctly. Regulatory agencies allow people to be lulled into a false sense of security when there is every reason to doubt the agency itself. It has no reason to operate efficiently or in the light of day. Market mechanisms do not have this defect. They are forced to be vigilant, attentive, efficient, and preemptive. Failures reflect on revenue, and revenue is life in the market.
We need not crack any eggs at all. The market doesn’t ask that of us. Regulatory agencies allow eggs to fall through their fingers, and when the yolk scatters on the floor the hand isn’t punished. The invisible hand of the market is far steadier and safer.
About the Author
David Brady is a Catholic libertarian and economics and finance undergraduate student at Florida Southern College. He is a co-host of the “Every Week is Chaos” podcast and a Mises Apprentice.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
