Amazon is apparently thinking about something which looks like a mistake, they're looking into using something like the military technology of MREs, "meals ready to eat," to prepare food for home delivery. Ex-military personnel might think this not all that good an idea although to be fair here the talk is of the next generation of such technology. Still some think this is a mistake, they can't see the purpose of it and anyway, why should people get an even more convenient method of receiving their daily calories?
As to whether this is a mistake or not we'll just have to wait and see because that's just how we do find out what is a mistake in a market economy. Which brings me to a comment made by Will Hutton this morning:
Since the elections of Thatcher and Reagan, the leitmotif of Anglo-American economic policy had been that markets do not make mistakes – only governments do that.
For those of you who don't know who Will Hutton is he's a journalist and in general member of the Great and Good in Britain. Reliably statist and soft left views on everything, most notably that the economy would work very much better if everyone just did what Will Hutton told them to. A bit like Harold Myerson but without the latter's humour or insight. Hutton is also reliably wrong on almost everything, on a par with Polly Toynbee on that score as he is wrong in this particular instance.
For quite the contrary to his insistence the argument in favour of markets is to allow people to make mistakes. Let's take this Amazon MRE idea as our example:
In a bid to take its grocery delivery business to the next level, Amazon is looking at a military food technology that prepares ready-to-eat meals - such as beef stew and a vegetable frittata - and eliminates the need for refrigeration.
With more consumers moving towards the option of easily available home delivered food, Amazon could leverage this tech - dubbed microwave assisted thermal sterilization (MATS) - to stockpile and ship cooked meals, without falling back for costly refrigeration methods.
Well, yes, OK, I know a number who have served in the US military and perhaps not, eh?
The company says that customers will be offered personalized and targeted meals based on the day of the week, the meal period, customer preferences, size of the family and the financial elasticity of each family. Meals will be offered for families of two, three, four or five.
That sort of variability is horribly expensive to cater to given the manner in which food stock deteriorates. Being able to store the meal for up to a year before delivery--or after--obviously aids with cutting waste costs.
Not everyone sees why MATS would be worth pursuing. Some think packaged food would have little attraction to the generally high-income members of Amazon’s Prime shopping club.
“I get why new food processing systems that increase shelf life may be good for Amazon,” said Bentley Hall, CEO of fresh food delivery service Good Eggs. “I struggle to see how this solution addresses an actual consumer want or need better than fresh, prepared meals.”
Ahhhh....but that's why we use markets. Here, we've this new technology which apparently turns MREs into yummy things. We don't know how many people might like such yummy MREs. And we've only one way of finding out too, which is to make some, try to sell some, and see who buys. Nothing else, at all, will do. We can't go and ask people alone because expressed preferences are different from revealed often enough. Coke asked a very large number of people about New Coke and found that whatever people said it didn't in fact work out. We also don't know, have no clue in fact, which variations, sizes, recipes will work, how often people will want to have them and so on. We're standing here with not a scoobie about whether anyone at all wants these new things. Thus markets--we can go and find out by making and trying to sell them. Given what people will eat in a TV Dinner maybe it will work?
Which is where Will Hutton gets it wrong about markets. We don't use them because we think they never go wrong, we use them as the great experimentation machine to find out what is wrong and, very much more rarely, what is right. Amazon may succeed, may fail, with this latest iteration of MREs--but that's the very point of a market based economic system, so that we can find out.
