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My year-old Kenmore dishwasher, Cape Breton lobsters, and the fall of the “New Economy”

Growing up, we always got Sears appliances. My dad, an electrical and aerospace engineer, always thought they were the best. Although I fully realize that manufacturing is not what it used to be, about a year and a half ago, we renovated our kitchen, and purchased Kenmore appliances. A few days ago, Anna told me that the dishwasher didn’t work. I looked for an internal fuse somewhere and couldn’t find one. I checked the panel in the basement, nothing blown. Got on the web and found some tech. sites that say that the problem with these is a bad control board that costs $125.00. This, plus the labor, comes to a little less than what I paid for the washer. The nice lady at the call center told me that I could also buy a yearly “smart service” plan for a little over $200.00. I calmly tried to tell her that was ridiculous. I asked her to schedule a technician, gave her my cell number, and said I would pay whatever a senior V.P. of the company said that she or he thought is fair for the repair of a brand new appliance that isn’t working due to a defective microprocessor….okay, I’m going to pay probably $200.00 for a rant to a middle manager at Kenmore, Whirlpool, or whatever the company is now, but at least I’ll feel better.

So why am I so bothered by this? The customer service people were great, very helpful, no problem there. It’s not them, it’s the idea that they are suggesting that I pay for a service plan that costs as much as the brand new appliance EVERY YEAR. That’s crazy, but why?  Beyond the money, I guess it’s because in the businesses that I have owned, there were feedback loops that ensured a connection between the product and its quality.

A few days ago, I received my PERC Volume 26, Issue 4 magazine, the “Enviropreneur Issue”. PERC is an organization that promotes what they call “free market environmentalism”. I really appreciate the work that groups like PERC and the Reason Foundation do. Although I think they can err significantly on too much belief in markets, they provide thought-provoking perspectives. This issue includes a couple of articles, particularly interesting to me, on markets for biodiversity, and using property rights to prop up threatened fisheries. The article, Save the Fisheries, by Daniel Benjamin, I think hits the proper intersection of government and market dead on. Benjamin describes a paper authored by Christopher Costello, Steven Gaines, and John Lynham (2008) that a property rights approach, called Individual Transfer Quotas (ITFs) is “stunningly successful in protecting fisheries”.

I first ran into this on a father-son expedition that Logan and I took to Nova Scotia several years ago. As we were hiking around Cape Breton, I asked a lobsterman how the lobster population was doing (I expected him to say that things were looking bad). He didn’t. Rather, he replied that although the average size was down a little, the catch numbers were fine. He went on to explain that lobster fishing on Cape Breton was limited by private rights owned by  families. The scale or number of these rights was set by the government. Rather than the two extremes of government command and control or free-market environmentalism, this hybrid of government (probably with the assistance of non-profits) setting environmental asset scale and allocation determined by the market, is in my view a big step toward a more sustainble economic model.

Thomas Frank, in his book One Market under God, Extreme Capitalism, Market Populism, and the End of Economic Democracy (2000) was precient. He described the New Economy of the 90s as hucksterism and blames all of us (politicians, people, corporations, government) for buying into its great myth:

From Deadheads to Nobel-laureate economists, from paleoconservatives to New Democrats, American leaders in the nineties came to believe that markets were a popular system, a far more democratic form of organization than (democratically elected) governments. This is the central premise of what I will call “market populism”: That in addition to being mediums of exchange, markets were mediums of consent. Markets expressed the popular will more articulately and more meaningfully that did mere elections. Markets conferred democratic legitimacy; markets were a friend of the little guy; markets brought down the pompous and snooty; markets gave us what we wanted; markets looked out for our interests.

I put together a panel on Planning and Markets a few years ago at the Virginia APA conference. At the meeting, Sam Staley, with the Reason Foundation, Jack Marshall, with Advocates for a Sustainable Albemarle Population, and Milton Herd, with Herd Planning and Design, discussed when markets don’t work. Sam, a former Planning Commissioner (which as a liberterian is really interesting), agreed that for systems where feedback loops are long-term, i.e., air quality and fish stocks, market signals may not work very well.

We’ll see what happens, but I bet I’ll be adding dishwashers to the list.

- Michael Collins

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