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Thank capitalism for your basic supplies in time of crisis

COVID-19 has meant some shortages at grocery stores. But overall, the supply chains developed over decades fill our needs

Even as COVID-19 has put much of the economy into shutdown and caused a run at grocery stores on some staples, most of us remain generally well-supplied with food. That’s something to be thankful for.

It’s one of the significant wonders of the modern economic system that most people, very few of whom are directly involved in the production of food, have such great access to it. So abundant is the food produced that we usually take it for granted.

How the economic system so successfully delivers food to the masses was pondered by French economist Frederic Bastiat in his book Economic Sophisms, first published in 1845.

“On coming to Paris for a visit,” wrote Bastiat, “I said to myself: Here are a million human beings who would all die in a few days if supplies of all sorts did not flow into this great metropolis. … And yet all are sleeping peacefully at this moment, without being disturbed for a single instant by the idea of so frightful a prospect.”

How does it happen that every day, the necessary food and other supplies flow into the city?

How the people of Paris were fed in 1845 is the same as the answer as how the people of Toronto, Vancouver or any of the other Canadian city is fed in 2020. It’s the result of voluntary exchanges between millions of people around the world.

Producing a loaf of bread and getting it to the consumer, for example, requires the work of farmers, millers, bakers, truck drivers, grocery store managers and cashiers. And we need to include the workers who construct the necessary buildings, bankers who allocate the capital for all these operations, information technology workers who make sure the grocery store’s computer systems work smoothly, and so on.

Millions of workers and companies make their plans independently, out of self-interest. Their actions aren’t planned, dictated or co-ordinated by any central planning authority. But the result is that all these actions combine in the free market to produce the abundance of food we normally see on grocery store shelves.

COVID-19 has meant shortages of some items at grocery stores. But overall, even in this economic and health crisis, we’re mostly well supplied. For this we must thank the supply chains developed over decades and the productivity-raising division of labour made possible under the capitalist system.

What if instead of a largely free-market system, all these millions of workers – farmers, bakers, truck drivers, construction workers, and so on – were controlled by a central planner?

Would our economy be better organized and more prosperous?

Quite the opposite, noted Bastiat. If some government cabinet minister, however smart, decided to take control of the economic system “to determine by whom, where, how, and under what conditions everything should be produced, transported, exchanged, and consumed,” the certain result would be widespread “misery, despair, and perhaps starvation.”

The current shortage of some items as a result of COVID-19 pales in comparison to the persistent shortages and lack of food in the poorest countries with the least amount of economic freedom.

We should be thankful that shortages are the exception instead of the rule in Canada. And we should thank our free-market system.

Matthew Lau is a research associate with the Frontier Centre for Public Policy.

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