Healthy food, unhealthy economics

by Rob Roper

A small story out of Bennington provides a terrific insight into the danger an activist government poses to a healthy free market, and why we shouldn’t be seduced by the promises of taxpayer subsides. According to Vermont Today, a food co-op is set to open in Bennington during the fall with the help of a federal grant. Sounds good. The grant is available because Bennington has been designated a “food desert” by the U.S. Department of Agriculture. Not so good (and really bizarre), but that’s another story.

Here’s the problem: there’s a health food store in the neighborhood, Spice ‘n Nice Natural Foods. According to its website, since 1970 Spice ‘n Nice has been offering the local community “alternatives that improve health and nutrition, support farming, advocate for our environment, and sustain our economy…. [A] wide selection of natural and organic grocery items, bulk grains, nuts, vitamins, herbs, organic produce, dried and fresh fruit, fresh artisan breads, books, yoga supplies, wheat-free products, fair-trade and organic coffees, and much more.” The owner of Spice ‘n Nice, Lucinda Bedard, rightly points out that her having to suddenly compete with a business that’s being propped up by taxpayer dollars creates an “incredibly unfair” situation. Bedard is also cited as saying she fears this unfair playing field could bring about the end of her business. Forty plus years making it work, and the government comes in and kills the thing with one “well-meaning” program.

If Bedard is right, this government investment would put her and her employees out of work. This would remove a healthy business that has proven it can survive on its own from the local economy, and would replace it with a business that is unsustainable without artificial government support. More than likely the real cost of the food in Bennington (the cost paid by the consumer plus the cost of the subsidies paid by the taxpayers) would go up. It’s a lose, lose, lose proposition.

This is this same dynamic at work with Vermont’s “universal” preschool policies. The government subsidizes favored operations with the ostensible reason of increasing the supply of care in the community. The politically favored programs use the taxpayer-funded advantage to undercuts their competition. When the unsubsidized businesses can’t compete and fold, the community ends up with fewer overall childcare spaces than it had to begin with.

This dynamic is also what is so worrisome about the Working Landscapes bill we got courtesy of the 2012 legislative session, which essentially creates a slush fund for politically favored agriculture projects. As that money gets dolled out to eager, politically connected recipients, look for more Spice ‘n Nices to go under.

Unfortunately, it’s easy for the media to follow around the politicians handing out the oversized checks at the ribbon cutting ceremonies for new, taxpayer subsidized businesses. All the public sees from those photo-ops are smiling faces – the jobs created. What the press doesn’t usually hang around for or search out are the pictures and the stories of jobs destroyed (or the taxpayers fleeced). Let’s hope Spice ‘n Nice with a little media attention can save itself and serve as an example of how the free market works — as well as how activist government ultimately doesn’t.

 

One thought on “Healthy food, unhealthy economics

  1. Government wants to think it knows best and throws money around for favored purposes. Intrusive government overreach is not the friend of business nor the economy as your story points out. Enterprise free of government interference provides the best hope for a robust economy.

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