and the Burger Wars
you love bad news, devote your life to studying government. You'll
learn about the colossal waste of NASA, the diseases spread by the
school-lunch program, the lies of the FBI, the corruption subsidized
by foreign aid, and the debauchery of the military base.
where can we turn for good news? To private enterprise, of course,
where efficiency, hard work, and creativity still count for something.
In markets, the old ideals of public service still survive, with
people working hard to bring us great products and services at prices
we can pay, and without waste. Here the average guy is sovereign,
and people fall over each other to put excellence first.
glories of private enterprise are most evident in the marvels we
take for granted. For example, free enterprise created the marvelous,
if much derided, institution of fast food. If there were a bureau
of hamburger production, they'd be as scarce as budget cuts. As
it is, citizens of every social and economic standing have daily
access in minutes to a balanced meal denied to kings
only two centuries ago.
is no small feat, but one of many millions of miracles of the marketplace.
The great challenge of economies from the earliest times was to
get all people, not just the rich, access to food. Otherwise, a
large and growing population could not be sustained. Only the advent
of capitalism, particularly in America, made this possible, and
fast food has played a key role in our times in making it so.
note that throughout human history, one key sign of prosperous times
is the wide consumption of beef (which requires far more land and
other resources than crops). It's no surprise that America distinguished
itself in world history for being the first society in which beef
was available to one and all, no matter how poor, especially through
what a glorious thing the hamburger is. It combines meat, grains,
cheese, and vegetables into a simple, delicious package for quick
and enjoyable consumption. It seems so easy, yet the efficient production
of the hamburger, in all its details, is of infinite complexity.
Only the coordinative powers of a market economy could possibly
the freedom of contract and capital accumulation, the right of private
property, stock markets, and the price system, there would be no
way to bring together the thousands of production processes needed
to make a hamburger, from farming, ranching, and the manufacturing
of thousands of individual capital goods from branding irons to
is why the fast-food burger is rightly seen as a symbol of freedom
around the world, and why the citizens of former socialist countries
crave it more than any other American export. Living under communism,
beef was for only the super rich and well connected. A delicious,
cheap, widely available beef sandwich is an unimaginable dream come
at the retail level, consider the way capitalism works to everyone's
benefit in the fast-food industry. To attract more business, McDonald's
is slashing the price of a Big Mac (that's "two all-beef patties,"
etc.) to 55 cents. That's one-fourth of its current price and only
a few pennies above the cost of its ingredients.
the company will serve it in 55 seconds, or you get it free. This
discount harks back to 1955, the year McDonald's began to revolutionize
how people eat, in America and all over the world. In time, the
company will offer the same deal on other favorites like the Quarter
Pounder. And this is despite the dollar having lost 83 percent of
its value since 1955!
is this huge company, with sales of $31.8 billion and 42 percent
of the fast-food burger market, doing this? Not because anyone ordered
them to do so or because the management swells with compassion for
humanity and its need to eat cheaply. McDonald's would love to raise
its prices. But it can't, so long as it needs to strike back against
competitors making serious inroads into what it sees as its territory.
King won the hearts of many by offering a Whopper that weighs more
than the Big Mac. It's also tapped into the huge market for breakfast
that McDonald's pioneered with the Egg McMuffin. It turns out that
consumers are also impressed by Burger King's Croissanwich. Then
there's the "problem" of Wendy's. Sales are growing by 7 percent
per quarter, because consumers like the old-fashioned atmosphere,
larger burgers, and ketchup that comes in cups instead of aluminum
was, of course, a huge error for McDonald's to do away with its
wonderful Styrofoam boxes on crazy eco-grounds. And like all large
companies, it has an institutional tendency to want to rest on its
laurels, a temptation the free market does not allow anyone to indulge.
tend to take all this scampering for consumer loyalty for granted,
but think what it implies on a deeper economic level. It shows who's
really in charge of the free enterprise system. It's not the moguls
who own or manage the company or the franchises. It's not even those
who make the food.
the king of the market for fast hamburgers is the consumer. With
his decision to buy or not to buy, he shapes the market and determines
the range of qualities and prices of goods and services. And it
is he who will decide the winners and the losers in the burger war.
No matter how big a company is, or how vast its market share, all
is lost without the vote of the little guy with the spare change.
no other system of economics (forget politics) does so much depend
on the individual choices of the average fellow. He can be as fickle
or finicky as he wants; there is no penalty for him either way.
Meanwhile, the private company can't complain; it can only respond.
It is enslaved to the whims of the buying public, which is exactly
as it should be.
is littered with businesses that despised this system because they
grew tired of competing. Instead, they enlisted the state to gain
a leg up, bypassing the competitive marketplace and the will of
the public. This is how we came to have anti-trust laws, trade protection,
business subsidies, loan guarantees, and government-enforced cartel
the fast-food industry is still largely governed by market forces,
as the burger wars show. The profit and loss system functions here
as well as anywhere. This system turns double-entry bookkeeping
into the crucial means for the public to communicate its desires
to those who provide the goods we depend on every day. If you don't
like the Whopper, you don't have to call Burger King's corporate
headquarters. You merely refrain from buying it.
are any of these competitors free to waste resources in pursuit
of consumer dollars. They must scrimp and save, cutting costs at
every corner. And they must find the most efficient way of getting
consumers what they want without ever sacrificing quality.
result is a vast, efficient, and productive process that serves
all of society. And it happens without costly elections, bipartisan
commissions, ethics-in-hamburger laws, regulators, bureaucrats,
special prosecutors, or any of the other trappings of government.
successful is this system that its fiercest critics are reduced
to complaining of the supposed "cultural decline" it brings about,
as if the ability of every man to buy a burger is a grave threat
to civilization. This aesthetic critique of capitalism is about
all that's left of the socialist lie.
then, have been the cultural effects of the fast-food industry?
In fact, they have been wonderful. It has rescued us from socialist
puritans who hate cows and want to permanently ban beef from the
American diet. It has provided jobs to millions of young people,
and taught them the work ethic. It has single-handedly kept alive
the great American birthday party. Above all, it has showed us that
eating well in good times and bad does not have to be the exclusive
privilege of the well-to-do.
take it all for granted, but make no mistake: without the institution
of capitalism that makes fast food possible, the vast majority of
the human population would be reduced to hunter-gatherer status
in short order.
there a way to bring the workings of the market to bear on now
frustrating sectors like education, mail delivery, utilities, public
safety, and the courts? Of course. The government merely needs to
get out of the way, and let the market do for these services what
it has done for the great American habit of eating on the run.