Theft at the Public Till
Caveat emptor-let the buyer beware-has always been the rule of the marketplace. This rule may once have been adequate when the kinds of things people bought in the marketplace lacked the complexity and seem- ingly infinite variety that they have now. But nowadays, being wary mostly succeeds in making life a nightmare. It makes each transaction a contest, a confrontation. It leaves us feeling all the time that we've probably been taken. It makes acquisition a full-time job. Those who enthuse about the efficiency and productivity, of the mar- ketplace don't place much importance on trust. We can economize on trust; we don't need trust if we've got competition. Competition will drive the dishonest merchants out of the market, for no one will buy from them. But we need more than competition to make trust unnecessary. We also need information. People need to know enough about the things they're buying to know when they're being cheated. When economists formulate their theoretical accounts of the operation of the market, they typically assume that people have the needed infor- mation. They assume that people know the differences between slightly different products and between different brands of the same product. They assume that people know about the prices at which the same product sells in different stores. It's only when people have all this information that they can take advantage of market competition to get the best products at the best prices and drive the cheaters out. "Our best customer is an educated customer," store advertisements sometimes say, as a way of suggesting that if we really knew all there was to know about the products being sold, it would be clear to us that this store provided the best merchandise at the best prices. It costs money-lots of money-to police the marketplace, and, as abuses proliferate, the costs of policing rise. And these costs don't buy us any prod- ucts. We don't usually factor them into the cost of buying and consuming, but that's because we don't pay for them in the restaurant or the department store. We pay for them in our taxes. If we could figure out what we have to pay as a society to keep our merchants behaving honestly (recent estimates are that fraud and abuse in retail trade costs us over one trillion dollars a year, excluding the cost of enforcement of regulations), and add these costs
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