LVII – Anatomy of a Boycott

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I
am amused at the conservatives' reactions to CBS' planned dramatization
of the Reagans' lives. Efforts were begun to plan a national boycott
of sponsors of this show which, allegedly, contained material distorting
the facts. As an advocate of an unrestrained marketplace, I have
no quarrel with people boycotting any person or firm they choose,
regardless of their reasons, provided neither private nor state
violence is employed. But for people to get righteously indignant
over purported lies and distortions directed against political figures
strikes me as ironic, particularly since the careers of all politicians
are mired in lies.

If
the Reagan defenders want to be sticklers for truth, why do they
not boycott those from their own ranks who have painted Reagan as
a man who reduced the size and role of the state, when the facts
are to the contrary? Why do they not publicly chastise the right-wing
talk radio hosts who continue to babble the falsehood that the collapse
of the Soviet Union was brought about by Reagan's massive military
spending programs? Perhaps the expression of "truth" is
what the conservatives most wish to "conserve," lest we
waste so valuable a resource! But if a private group chooses to
boycott those with whom they have a dispute, I would be the last
to deny them the liberty to do so. I have no patience with those
who equate private boycotts of films, books, or television programs
with "censorship," the latter being a coercive form of
statist repression. The withholding of patronage, by contrast, is
just one of the many ways in which free people express their self-interest
in society.

That
being said, I nevertheless have an abiding skepticism of demonstrations
seemingly undertaken by large numbers of persons for what are offered
as "spontaneous" expressions of "public opinion"
on some issue. Upon close examination, many such spectacles turn
out to be well-orchestrated efforts to advance ulterior motives.
One such piece of political pageantry — with which I had some indirect
connection — occurred in Denver in the early fall of 1966. With
consumer prices rising as the aftermath of government inflationary
policies, an allegedly "spontaneous" housewives' boycott
of grocery stores arose in that city. For a few weeks, this event
was a major news story across the country, as picketers descended
upon grocery stores accusing them of "price-gouging,"
"profiteering," and other untoward practices. The underlying
theme of this boycott was that food prices were too high, and that
"something" had to be done. With the November elections
on the horizon, the implications were clear as to who was likely
to be doing what and to whom.

Some
of the chain-store managers — with an apparent lack of sophistication
in such matters — quickly responded by lowering prices on some of
the very items upon which the housewives had focused. That such
reactions only added credibility to the shrill tones of the boycott
is to put it mildly. Soon the media were being fed data that could
befool only those wholly unconversant in the economics of retailing.
As memory serves me, one set of figures suggested that forty-seven
cents out of every dollar spent in a grocery store was pure profit
to the grocer, an assertion which, if true, would have emptied every
business college of budding entrepreneurs eager to enter the trade.
When asked to justify this claim, one of the boycott leaders pointed
to a state study that had shown a forty-seven percent increase in
retail grocery sales in Colorado over a given period of time. You
begin to get an idea of the economic benightedness the grocery industry
was confronting!

One
grocer decided to respond to this circus with intelligence. His
name was Lloyd King, the owner of a major grocery chain in Colorado.
King was more desirous of educating these housewives — and the public
to whom the boycott was directed — than in trying to placate or
even react to them. To illustrate the role that government regulation
plays in raising prices, King's stores confronted a state regulatory
agency's directive establishing minimum prices for dairy products.
Milk was advertised and sold by his stores at a lower price than
allowed by the state, for which his company was fined. The following
day, two front page stories appeared in a major newspaper: one told
of the continuing housewives' protest of high food prices, the other
reported that King's company had to pay a hefty fine for selling
milk below the government-decreed level! Such a response
explains why Lloyd King remains one of my marketplace heroes.

King
went further than this. He approached the boycott leaders and told
them that he would make his books available for inspection by any
accounting firm of their choosing, and that he would pay the accountant's
bill. He held back nothing, knowing full well that the realities
of grocery retailing, at the time, were that stores were making
somewhere in the neighborhood of a two percent — not forty-seven
percent — profit on sales. A review of his books would, he was confident,
reveal this fact.

In
return for his offer, King asked the boycott leaders to participate
in an on-going discussion with himself and a friend of mine, selected
by Lloyd to be his liaison with the housewives' group. The women
agreed. As part of this agreement, one of the boycott leaders participated
in a two-week course I was teaching at a nearby college. A major
portion of this course involved introducing students to the nature
of marketplace economics. In teaching this course, I had been using
grocery store pricing as a way of demonstrating how the market responds
to changes in pricing; that it is the informal pricing mechanism,
influenced by the combined preferences of millions of buyers and
sellers, that determines prices and disciplines the marketplace.

At
some point in the discussion, this woman suddenly became hysterical
— the kind of response I had not experienced from a student before
or since — and I suggested we take a break. I immediately sat down
with her and asked her what was wrong, and she replied in sobbing
words I shall never forget: "I suddenly realized how I have
been used."

I
didn't experience the full impact of her comment until shortly thereafter,
when I was speaking to my friend who was Lloyd King's liaison with
the group. He related how he had been on a flight from Washington,
D.C. to Denver and, by the randomness of seat assignments, found
himself next to a young woman. They got into a conversation, during
which she told him that she worked for the U.S. Department of Agriculture,
in some phase of public relations. He asked her what this included,
and she, in return, asked my friend if he was familiar with the
Denver housewives' boycott. He told her that he was — although he
did not reveal his involvement in it. She then told him that her
office was directing this boycott; that they had been writing speeches
and press releases, compiling economic data, suggesting strategies,
and the like.

My
friend inquired of this young woman why the Department of Agriculture
would be engaging in such activities, and her reply was that the
Johnson administration — Lyndon was in office at the time — was
anticipating that the Democrats would make a net gain in House and
Senate elections in early November. Johnson was desirous of imposing
wage-and-price controls on the economy, and needed to have some
"expression" of "public demand" for such policies
to which he could "respond."

The
November elections proved a disappointment to Lyndon, as the Republicans
made gains in Congress. And with that turn of events, the housewives'
boycott that "spontaneously" arose in Denver a few weeks
earlier, just as "spontaneously" disappeared, leaving
the curious to contemplate the mercurial dispositions of Denver
housewives to bacon prices! There is nothing to be drawn from all
of this, of course, because as all right-thinking people know, there
are no conspiracies in our Panglossian world!

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