Hayek's Got the Juice
If you are at all a business/economic geek, you will love this speech by a former Coca-Cola packaging executive highlighted by Don at Cafe Hayek. Here is a really fun tidbit:
"In the early nineties, the northeast states from Maine to New York formed an organization called CONEG or Council of Northeast Governors. This council came together to discuss issues relating to solid waste, recycling and packaging. At one point the council was on the verge of concluding that government should establish packaging specifications for all products. In fact, one of the first products that they considered was a product of great importance to one of my prior companies—Orange Juice.
I was asked to present a paper on orange juice packaging, which I did. As I began my presentation, a young woman from Maine immediately challenged me, as she thought that I was essentially an immoral brigand for packaging orange juice. She thought that the orange was a great example of a product which required no packaging, and that was the way it should be sold.
Let’s examine the thesis being expressed by that individual. In the view of the individual, fresh oranges would appear to be an excellent example of a product that exemplifies the CONEG concept of no packaging or “reduce” in the mantra of reduce, reuse or recycle.
Upon closer examination, this is not the case. Fresh oranges are packaged in rather substantial corrugated containers for distribution to retail outlets. But that is not the place to begin one’s analysis.
Even though common sense makes it clear that fresh oranges are only available during a few months of the year, I will set that issue aside.
Industrial juice processors squeeze oranges more efficiently than consumers’ because of the equipment they use to perform the task. A consumer will, at a minimum, require about 20 percent more oranges than an industrial juice processor to yield the same amount of juice.
So, home squeezing of fresh oranges is less efficient of oranges and, therefore, less efficient of agricultural land, fertilizers, pesticides, herbicides, water resources, agricultural capital, and agricultural labor than packaged orange juice. "
Wow. Talk about a fact that illustrates so wonderfully the Hayekian concept of widely dispersed knowledge that ultimately puts the fatal in "the fatal conceit." This little tidbit about the juicing of oranges is amazing. No bureaucrat could or would know this before the businessperson who is concerned with every last cent and thus every last drop of juice from an orange. The world is full of these amazing tidbits. At my ripe-but-not-too-ripe age I continue to be in awe of our Hayekian world with meaningful tidbits, details and nuggets buried under mountains of putative macro-all-knowingness.
"In the early nineties, the northeast states from Maine to New York formed an organization called CONEG or Council of Northeast Governors. This council came together to discuss issues relating to solid waste, recycling and packaging. At one point the council was on the verge of concluding that government should establish packaging specifications for all products. In fact, one of the first products that they considered was a product of great importance to one of my prior companies—Orange Juice.
I was asked to present a paper on orange juice packaging, which I did. As I began my presentation, a young woman from Maine immediately challenged me, as she thought that I was essentially an immoral brigand for packaging orange juice. She thought that the orange was a great example of a product which required no packaging, and that was the way it should be sold.
Let’s examine the thesis being expressed by that individual. In the view of the individual, fresh oranges would appear to be an excellent example of a product that exemplifies the CONEG concept of no packaging or “reduce” in the mantra of reduce, reuse or recycle.
Upon closer examination, this is not the case. Fresh oranges are packaged in rather substantial corrugated containers for distribution to retail outlets. But that is not the place to begin one’s analysis.
Even though common sense makes it clear that fresh oranges are only available during a few months of the year, I will set that issue aside.
Industrial juice processors squeeze oranges more efficiently than consumers’ because of the equipment they use to perform the task. A consumer will, at a minimum, require about 20 percent more oranges than an industrial juice processor to yield the same amount of juice.
So, home squeezing of fresh oranges is less efficient of oranges and, therefore, less efficient of agricultural land, fertilizers, pesticides, herbicides, water resources, agricultural capital, and agricultural labor than packaged orange juice. "
Wow. Talk about a fact that illustrates so wonderfully the Hayekian concept of widely dispersed knowledge that ultimately puts the fatal in "the fatal conceit." This little tidbit about the juicing of oranges is amazing. No bureaucrat could or would know this before the businessperson who is concerned with every last cent and thus every last drop of juice from an orange. The world is full of these amazing tidbits. At my ripe-but-not-too-ripe age I continue to be in awe of our Hayekian world with meaningful tidbits, details and nuggets buried under mountains of putative macro-all-knowingness.
posted by Donny Baseball at 10:04 AM
1 Comments:
Mr. Teasley's command of relevant facts and clear-headed, rational approach are hardly a surprise. His formative years at Coke were under the leadership of Roberto Goizueta, arguably one of free enterprise's most capable and successful managers.
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