How is it that services are available on the interstate highway system when and where I need them? Image courtesy of Adobe Stock.
I took a road trip from the Los Angeles area to Williston last week. My wife and I drove there with our son and his family.
A few questions came to mind on the trip
Questions
1. What economic system provides a gas station within a few miles of the point that we decided we wanted to fill up the tank?
With four drivers in the car, we were planning to drive on through the night. We were too tired to do that so we decided to stop for the night.
2. What economic system provides multiple hotels and motels half an hour down the road from where we changed our mind?
3. Furthermore, when we wanted to stop, what economic system provided motels at multiple price points so we could pick the one that fit our price range and taste?
4. Why is it that the motel we choose included a full breakfast for all of us in the price?
5. Why did the motel even have two upgraded lamps on the night stands each with 2 USB charging points and two electrical outlets on the base of each lamp?
Answers
1 . I suggest that it is capitalism that provided gas stations where we wanted them.
2. It is capitalism that makes lots of hotels and motels available where travelers want them.
3. The varying budgets and tastes of consumers leads businesses to position themselves at different places on the price and quality scales.
4. It is the competitive pressure of the capitalist system that pushed the motel to include a full, hot breakfast in the price of the room.
5. As for the lamps with USB ports, that motel want something nicer to gain a small competitive edge over the all the other motels.
Bonus answer: Furthermore it is the competitive pressures of wanting to get my business that forced the gas stations to have bathrooms available.
One reason those things did *not* happen
I will also point out it is not from the goodness of the heart that these businesses did all these things.
No.
It is instead their self-interest of wanting to make a buck that pushes all those business owners to provide for my needs.
They each want to make a buck.
Who benefits?
I benefit because I get the goods and services I want, at the time & place I want, at a price that is acceptable.
The business owners benefit because they get my business.
The employees benefit because they have a job that produces value to their employer.
All the vendors benefit. And the vendors’ employees.
What made all those things happen?
No government agency planned any of those things.
No conspiratorial back office consortium divided up the territory or standardized the offerings.
No heavy-handed bureaucrat assigned the business locations.
What made all that possible?
Capitalism.
What a fantastic, fabulous, wonderful system.
Government provides the infrastructure
Providing the foundation for all this to happen is the interstate freeway system. An entire economic structure had built up around the freeways that spread across the country.
Where did that infrastructure come from? The federal government funded it. That is the limited job of the federal government. (Please note the private sector built all of the roads.)
There is a school of thought that has been around since way back when Abraham Lincoln was a part of the Whig party that believes the national government should empower the economy by building the infrastructure and then getting out of the way.
Congressman Lincoln and his allies wanted to fund canals because they knew canals would result in an expanding economy and increased wealth for everyone.
What a fantastic team!
The federal government built the interstate highways.
Capitalism built the gas stations, restaurants, motels, and light fixtures with 2 USB outlets.
What a fantastic system!
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