The concept of “market failure” or “imperfect markets” is well-beloved by liberals, providing, as it does, one pretext or another for government intervention in the economy. (Joseph Stiglitz’s book, Principles of Microeconomics, the text my daughter has been assigned for her introductory economics course in college next fall, is divided into four parts. One of the four–or roughly a quarter of the textbook–is devoted entirely to “market failure.” Not a single chapter, so far as I can tell, discusses the persistent problem of “government failure”; that is, the overwhelming tendency of government economic interventions to make matters worse, not better.) Free market conservative that I happily am, I’ve spent a lot of time over the years inveighing against claims that markets are subject to systematic failings and imperfections. But every so often, I have to admit, I have an experience that triggers a certain, odd reaction.
One of those experiences took place last night.
My wife and I went looking for a new mattress. (A typical mattress, according to various consumer websites, is good for about ten years. We’ve kept ours for twenty.) We went to a mattress store–let us call it Sleep Highway–where we discovered scores of mattresses, all of which looked virtually identical but which varied in price from a few hundred to ten thousand dollars. We began hopping onto one mattress after another, as a salesman followed us, chattering incessantly while trying to nudge us, all the while, upmarket. (“Oh, that mattress? That’s really intended for kids just out of college. What you’ll want to look at is right over here. This mattress has intelli-coils. And this one has smart latex. And this one? This one has both.”) As confusing as the showroom appeared, in about an hour we’d figured out the basic market: There are only three or four major mattress manufacturers in the country, each makes about three different lines of mattresses, and each line comprises three or four models running, not surprisingly, from soft to medium to hard.
Once we’d figured that out, we found a couple of medium mattresses in our price range, one manufactured by Stearns & Foster, the other by Simmons. Then we headed home, thinking that we’d do a few price comparisons online. (On Consumer Reports I’d come across a guide insisting that mattress markups tend to be one hundred percent or more. If you shopped carefully, the guide asserted, you’d never have to pay more than 50 percent of list price.) What did yours truly quickly discover? Madness. Sheer and utter madness. Even though all retailers carry the same couple of dozen mattresses manufactured by the same three or four firms, none carries precisely the same lines. Sears, for example, carries a very slightly different line of Stearns & Foster mattresses–with slightly different trim and slightly different stitching–from Mattress Discounters, which in turn carries a very slightly different line of Simmons mattresses from Sleep Train. In what should be a free and highly competitive market, in other words, manufacturers and retailers have made it impossible–simply impossible!–for ordinary consumers to compare prices. Have you decided on the Stearns & Foster ultra plush in the “Eureka” line? And wonder whether Sears offers a better price than Sleep Train? Silly you. Nobody carries the “Eureka” line but Sleep Train. What you’ll find when you look up Stearns & Foster at Sears is the “Hearthstone” line. Which, in turn, you’ll be unable to find at Mattress Discounters. It’s a pretty good guess, I suppose, that the mid-range Stearns & Foster mattress at Sears is comparable to the mid-range Stearns & Foster mattresses at Sleep Train and Mattress Discounters, but–and this is the point–you can’t really be sure. If the mattress costs less at Sears, is that because Sears is offering a better deal? Or a worse mattress? You, humble consumer, have no way of finding out.
Tell me, my Ricochet friends–tell me. When you read my tale of mattress woe, don’t you, too, almost–almost!–find yourself wishing the FDA or the FTC or some other government agency simply stepped in and forced the manufacturers to establish simple, straightforward labels that made comparison shopping possible? Don’t you, too–admit it!–feel the first stirrings–not that you won’t suppress them!–of a certain historical tendency? Don’t you feel–just slightly! For a moment!–like a socialist?