Conservative News & Commentary

Mar 18, 2012 — by: J. Madison
Categories: Government, Culture

Dutch Bros Coffee CupHello. My name is J. Madison. Well,... not really, but that is my pen name and I'm new to Below is my first blog here and I hope you will provide feedback. One of the hallmarks of this site is to promote conservative ideas and then to show why they make more sense than the conventional wisdom paraded around as the only reasonable game in town. Part of that process is to get feedback from readers, so I would encourage you to enter the arena of ideas and let me know what you think. We may agree; we may disagree. The point is for robust discussion and finding the truth of a matter, rather than a complacent nodding of heads.

So onto my question: What If Government Ran Dutch Bros? What would we expect? Well first we would see an option for "free coffee." The government would claim that there are some people who can't afford a cup of coffee and that is not fair, and government must be fair. So there would be "free coffee". But really it wouldn't be free, because government has to pay for the coffee and the labor to make and serve it — and of course that labor would be union labor. Therefore a special levy would need to be passed. It may start as a seemingly harmless three year ballot initiative. It may be as little as $0.03/$1,000, but it would be there and everyone would pay it, even those who don't like coffee or don't drink coffee. The paper and government officials would claim that the Klamath County resident would only pay $75/year. Those who would stand opposed to this tax would be demagogued as mean spirited, selfish and the privileged class that don't care about the less fortunate.

How about the other coffee shops in the area? What would happen to them. Well one of two things: they would close shop or their prices would increase. In our market economy when a competitor (in this case the government) offers something for free, others in the industry lose business. So to make up for lost business and in order to stay profitable, either costs need to be reduced and/or prices must increase. Expect a little of both. Moreover, expect the quality of the coffee to decline. Since coffee is now free, the government will offer the minimal USDA and FDA level coffee in order to say the coffee is "safe". Whether it tastes great or not, is far less important. Government has a budget too and with unlimited demand, quality will be the first thing to suffer.

However, the real question that needs to be answered is whether the public is better served by government running Dutch Bros? Will there be better access to coffee? Yes. The barrier of price has been removed. But that doesn't answer the question in totality. Access to something does not equal the public being better served. The public is everyone, not just a few who like coffee and now decide that others can pay for their habit. The public is better served when all benefit by a service government provides. So let's quickly outline the outcomes and then you can decide whether this is a good idea or not. 

With Government Run Dutch Bros we get:

  • Free coffee
  • Worse quality
  • Some people enjoy a benefit while all people pay for the benefit
  • Some coffee shops go out of business (higher unemployment), while others charge more for coffee to stay in business
  • Less competition, less variety

My opinion is this is a bad idea. It doesn't pass the test of benefiting all the people. In addition this act will inherently build a free coffee special interest group that will be loud and active. When the three year levy has completed, it will need to be renewed and probably for just a bit more, say $0.05/$1,000. And then again and again and again because government programs rarely cease and almost always increase.

While this story may seem like a odd exercise, start applying these ideas to other reasons why our city, county and state governments tax us. Try public libraries, try public museums, try public schools, try public health (free contraception),... the list goes on and on. Remember if government weren't to offer a particular service doesn't mean the private sector wouldn't fill that void. Again ask yourself, does everyone benefit, or do only a few? And, what are the unforeseen consequences of government providing free products and services in the name of compassion and fairness?

1 Comment

  1. Jefferson Bourne ~ Mar. 18, 2012 @ 8:43 pm

    Well said, to say the least! #

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