The Ultimate Business Model
Killing and harming customers are the best actions a business can take to further the entrepreneur’s lifestyle and reputation.
I’m kidding… but some people aren’t joking. Those people are the proponents of anti-capitalist systems. They argue that without state-enforced regulations businesses would regularly serve poisoned water, drink, and food either accidentally or purposefully. This is patently absurd.
Alignment of a business’s interests and consumers’ interests would exist in a capitalist, private law society. What makes the consumer satisfied is what makes the business money. It is not in the consumers’ interests to be poisoned, and thus there is an incentive for the entrepreneur to provide safe products.
This incentive is stronger than many other market incentives because both parties are harmed greatly when a customer is poisoned. First and foremost, the customer sustained injury, and this injury might result in vomiting, horrible pain, or death. Obviously, a consumer would prefer to eat at safer restaurants than at restaurants known for having served poisoned drinks or food in the past.
Following this, a business would prefer to keep a clean slate as to not lose customers and revenue, and it might voluntarily request or allow inspections to prove their cleanliness. If a business did serve poisoned drink or food then not only would they lose money directly by having to pay restitution to the unfortunate consumer, but their reputation would also be negatively affected. A loss in reputation for a business results in a loss of revenue, possibly to the point of becoming an unprofitable business.
Additionally, it is in the capitalists’ best interests if the businesses they funded did not harm their consumer base. If a business was found to poison drinks or food, then the investors would quickly sell their shares of the business and invest elsewhere.
Free markets would often serve poisoned drinks, lacking government regulation, if and only if government regulation magically created and sustained an invention that would be the only way to detect and filter out the poisons. Otherwise, it would be in the entrepreneur’s best interest to serve safe drinks and food.
I am Nick Sinard, an amateur economist and philosopher that follows in the rationalist tradition, specifically the Mises-Rothbard-Hoppe tradition. You can find my material at www.NickSinard.com and www.Facebook.com/TheNickSinard . I'll soon be putting up videos on YouTube about an array of topics, including "What is libertarianism?" You can find my YT channel at https://www.youtube.com/channel/UCFGA8_Ti30AbYiADPCo8Qgw
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Good to see a fellow market anarchist on here.
I encountered something similar in South America. When I would go out to eat, I would regularly eat at the road-side barbecues. They sound like the most dangerous places to eat, but I never got sick by eating there. I noticed that there were people who would frequent these places and provide an incentive to make safe food by their patronage.
No inspectors, no food handlers permits; just me and the owner. I used my head (you know, that thing that tells you if something is dangerous or not) and could usually tell by the customer base if I was going to get sick or not.
I ate at those stands for about $1 to $1.50 for a big meal. Now tell me where you can find that in the States?
Hi! This post has a Flesch-Kincaid grade level of 12.0 and reading ease of 42%. This puts the writing level on par with academic journals.