Tuesday
(2)Australian Libertarian blogger Tex waxes lyrical on free markets:
For me, nothing - nothing - in recent years has confirmed my faith in the wonders of markets and competition more than one humble little sector of our economy: the pizza industry.I'm a pizza addict. Ten years ago, I would have to part with the best part of twenty bucks to get one large pizza delivered. Suppliers in my area were limited and it sometimes arrived cold. When in Sydney a few years ago - in an area not well serviced by the Pizza men - I shelled out nearly fifty bucks for two delivered pizzas + a drink. Nowdays, I can get two large pizzas - easily enough to feed three people - for less than $15. It arrives quickly, is great quality, and there are a far greater variety of pizzas to choose from.
So in ten years, pizza prices have more than halved, the quality has gone up, the delivery times are quicker, and there's a greater menu to choose from. And it's 100% the result of competition. As a couple more suppliers moved into the area, the "coupon wars" began. Maybe a couple of coupons per month would arrive in the mail, offering a few bucks off per pizza. Then other companies started to price-match. Nowdays, my letterbox is flooded with pizza coupons, each subsequent one outmatching the last.
As another example of the benefits of free markets, I was in Melbourne on the weekend. Melbourne is justifiably proud of it's food- I'm not a well travelled man by any means but it does seem to be one of the world's leading cities for fine dining.
In the restaurant strip in Lygon Street, for example, you will find that the establishments there actually have hired people to stand outside and make offers to passers-by, to entice them in, and in this way you can get yourself, for example, a free bottle of wine. Australians don't haggle much, but the visitor who has this skill can make good use of it there.
In Melbourne's Chinatown on Little Bourke Street, the same practice has come into vogue.
This hot-house atmosphere of competition isn't just a boon from the point of view of the diner's wallet either. Restaurants don't just compete on price- they compete on quality as well, and reputation is as important as price in these markets. For they are dealing with a clientele that is, on the whole, very well educated in dining.
And this also encourages risk-taking, to provide new and innovative ways of presenting and preparing food. Bon apetite!
Australians don't haggle much
I don't actually agree with you there. Compared to British people and Americans, Australians haggle a lot. One thing that disappointed me when I came to England was that prices in shops were far less negotiable than I was used to. In Australia, I wouldn't dream of buying electrical goods or furniture (even in a high street shop) without at least a discussion of whether I was going to pay the sticker price or not. (I very seldom would). In Britain one cannot generally do this, which is why I have more or less abandoned making significant purchases in high street shops. (Britain's internet retailers are very competitive).
It is certainly true that even in Australia a lot of people still do pay the sticker price: some people just don't like haggling. This is fine by me: these people pay the fixed costs of the business and hopefully I can get the margin the retailer makes on my purchase as close to zero as possible.
Posted by MIchael Jennings at April 13, 2004 07:56 PM
Michael: This very much fits with an amusing tale I heard recently. On a visit to Egypt, a British friend of mine was told by her guide that she would get much better prices at markets if she pretended to be Australian, because Australians were "much better hagglers."
Apparently the trick worked pretty well, despite her not even bothering to fake the accent.
Posted by Recoil at April 14, 2004 01:15 AM
