Senseless Census Ads
Businesses don't count heads.
“Economic calculation can only take place by means of money prices established in the market for production goods in a society resting on private property in the means of production.”
– Ludwig von Mises
For the past several months we’ve been subjected to numerous advertisements shaming us into completing the U.S. Census form. Some of the ads are annoying, but a few are downright absurd.
The ads to which I refer are those that include phrases such as, “If we don’t know how many people are in your community, how will we know how many hospital beds your community needs?” Or: “If we don’t know how many people we have, how will we know how many buses we need?” I’ll ignore the fact that I’m not really sure who “we” are and get to the main point:
The ads present a ridiculously false story.
Has your local grocery store ever been out of food? Do you fear that the store might miscalculate the amount of food needed, leaving residents hungry? Have you ever received a census from your grocer? Has the grocer ever run ads claiming that without your household survey, he won’t know how much food to stock?
The idea that “we” have to count heads to ensure the right quantity of goods and services is falsifiable with very little mental effort. Markets manage to deliver billions of incredibly specialized goods to every corner of the globe with amazing efficiency every day without census forms. They use an ingenious process called the price system.
Unlike the census, the price system in a free market is not the product of human design, but of millions of human actions, spontaneously coordinating to signal producers, consumers, investors, shippers, shelf-stockers, and all the other players in the market what decisions they should make to best achieve their objectives. The free play of millions of individuals, each seeking to better their situation, results in awe-inspiring cooperation and organization.
Of course, inasmuch as things like mass transit and hospitals are run by government rather than by individuals in the market, the census ads have a point. They cannot know how many hospital beds or buses to provide without population data. The dirty little secret is that they cannot know how many hospital beds or buses to provide with population data either.
If it were possible to figure out what type and quantity of goods were demanded by a population by surveying them, businesses would never fail — entrepreneurs could simply ask their target market what it wanted and produce just the right amount.
In reality, even if you are able to count how many people live in a region, that information alone does not determine how many hospital beds or buses they will demand. In fact, chances are those people don’t even know how much of those goods and services they themselves want. If you merely ask, it is costless to answer. If you allow entrepreneurs to offer those goods and services on the market, they will quickly discover customers’ revealed preferences and how much they want compared to other goods. A head count is almost useless at discovering a community’s needs.
If you haven’t completed your census form you needn’t feel guilty that your public bus system will miscalculate demand and over- or underserve your community. It will indeed miscalculate demand, but that has nothing to do with the absence of good census data; it has everything to do with the absence of market competition. Competition is more than just a contest that weeds out weak firms. As economist F. A. Hayek put it, competition is a discovery procedure. It can discover things no census ever could and coordinate resources beyond the ability of any government boards, commissions, or planners.
The solution to surpluses or shortages of buses or hospital beds is not an unleashing of paper surveys and patronizing television ads, but an unleashing of competition.
Comment by Dave Narby on 10 May 2010:
The main purpose of the census seems to be to determine the racial/age breakdown of the US population and the number of housing units.
Comment by Allen on 10 May 2010:
Isaac,
Very coincidental – I posted an article on this very subject a few weeks back when I saw one of those absurd ads.
http://reshapingmisconceptions.blogspot.com/2010/04/how-to-run-successful-business-send-out.html
Allen
Comment by George Schwappach on 10 May 2010:
Every thing you say is completely correct. However, the census is only takenen every 10 years, as proscribed by the constitution (a count, that is, not your name, race or birthdate, or wether your home has a mortgage). However, the US Census is a part of the US Department of Commerce. This government agency, like the post office and amtrack, operates a government business that offers “free” benefits to subscribers, such as survey data. they compete with private businesses like Zogby and Nielsen to offer data, and can only do this because of the billions of dollars in taxpayer subsidies. This is governments effort to encapsulate the capitalization of private business.
It is really the subsidy that makes this activity so very anoying and absurd.
Comment by Daniel Shapiro on 10 May 2010:
Great article:
“They cannot know how many hospital beds or buses to provide without population data. The dirty little secret is that they cannot know how many hospital beds or buses to provide with population data either.”
These people are just going through the motions to justify their existence based upon the incoherent abstraction of “general welfare”. So what else is new.
Is it true that the Feds can fine you for not cooperating in their nose counting ritual?
Pingback by Senseless Census Ads | The Freeman | Ideas On Liberty « The Chocolate Savant on 10 May 2010:
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Comment by James Madison Fan on 12 May 2010:
As George points out it is Consititutionally mandated so as to determine how many Representatives each state receives. Unfortunately the majority of the electorate are apathetic. If we had voting percentages on a par with Iraq fines wouldn’t be necessary but that’s when the majority of people don’t even bother to pull the lever to determine who is going to run the nation. The buses, hospitals, etc. are the carrot portion of coaxing the mule into action and the fines are the stick. Economics is about greed. Democracy is about community will. Sometimes the two don’t interact at all well.
Comment by Shane Coley on 26 May 2010:
Great article. With commenter above labeled James Madison, I disagree on these points. He wrote: “Economics is about greed. Democracy is about community will.”
Economics is Life, Liberty and Property mixed together and defended through the application of Natural Law. This system separates motive from means. I may have greed in my heart, but without theft, I can only satisfy my greed with labor and wise stewardship, which benefits those with whom I coordinate production. Only when motive is combined with means is greed a factor. Costless money or other forms of differing weights, differing measures, theft or force are required in some combination in order to externalize greed and cause economic harm to my neighbor.
Democracy is mob rule and the mob is moved by emotion. The actual will of the community, particularly in terms of desired outcomes, and the impassioned actions of the community often conflict.
We are supposed to function as a Republic, but a Republic consists of governing bodies subject to the same law as each individual, with no rights granted to the fallacious legal entity known as “groups”. Groups don’t need rights and governing bodies are simply agents which act on behalf of all individuals through uniform application of Natural Law or congruent (and essentially redundant) human law.
Comment by Joe on 26 May 2010:
Bravo!!!! Well put Shane!!!
Thanks.
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