If you’d like to see the future that Alexandria Ocasio Cortez would like for us all we can use this example – her own – of the $7 croissant. It’s possible to do a slightly deeper dive into the underlying economics but then that would require her to have a knowledge of David Ricardo and some clue as to the notion of rental values. As is described here:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Anyone want to take a punt on what the rent is for a croissant stall at LaGuardia? It was actually the section on coffee prices which interested me most in Tim Harford’s The Undercover Economist, in which he pointed out that even in busy London stations coffee sellers don’t make much money because the landowner simply increases the rent. In other words, it’s the landowners via rents who make money in prime locations, not the operators of businesses.[/perfectpullquote]
That chapter of Undercover Economist is indeed the best modern explanation of David Ricardo on rent. One lesson of which might be that old dead European white guys have something to teach us about the modern world. We’ll not be able to understand the prices in Starbucks – nor even why the UK arm paid so little tax for so long – without grasping the principles laid out in Ricardo, published in 1817.
But we can and should go further:
Croissants at LaGuardia are going for SEVEN DOLLARS A PIECE ????
Yet some people think getting a whole hour of personal, dedicated human labor for $15 is too expensive??
— Alexandria Ocasio-Cortez (@AOC) 1 April 2019
La Guardia is owned by the City of New York. It’s managed by a public interest bureaucracy called The Port Authority of New York and New Jersey. Ms. Ocasio Cortez desires that more – if not all given democratic socialism – of the American economy should be owned by government, run by public interest bureaucracies.
That is, the Ocasio Cortez plan for America – $7 croissants for everyone. Not really sure if that beats a chicken in every pot as a campaign slogan.