Thursday, November 21, 2013

Bacon Crisis?

You may recall Tommy from Norway and his despair over the predictable results of his country's benighted trade policies.

You may also recall reports of predicted bacon "shortages" last year.

What you might not recall are reports of supermarket fistfights over those glorious rashers. The difference? Prices were allowed to adjust, trade barriers were kept (relatively) low, and we enjoyed the bacon shortage that wasn't. Ditto with the hand-wringing we've heard about wine in the past few months.

Anyway, enjoy the gloat if you've not already seen it.

There's some good economic wisdom at the end: "you could try eating something else, like falafel."

Yes, one of the roles of prices is to encourage substitution where appropriate. See? Tommy's not the goofy goof you all thought he was.

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Do you have suggestions on where we could find more examples of this phenomenon?