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!

Butler Shaffer [send him e-mail] teaches at the Southwestern University School of Law.

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