Category: Food and Drink
Gross(ery) Confusion
Zephyr Teachout’s NYTs op-ed on grocery store prices is poorly argued.
The food system in the United States is rigged in favor of big retailers and suppliers in several ways. Big retailers often flex their muscles to demand special deals; to make up the difference, suppliers then charge the smaller stores more.
Let’s be clear about what is actually going on. Costco offers its suppliers lower prices in return for bigger orders. There is nothing anti-competitive about volume discounting. Moreover, are firms dismayed or are they eager to sell to big, bad Costco? Google AI gives a good answer:
…firms are eager to sell to Costco because of the immense potential for sales and brand exposure, but they must be prepared to meet stringent requirements, negotiate competitive pricing, and be able to handle high volume and demanding logistics.
Would Americans be better off without Costco? Doubtful given that more than one-quarter of all Americans pay for a Costco membership (either individually or as a family).
Teachout’s idea that suppliers “make up the difference” by charging smaller stores more is also economically incoherent. Profit-maximizing firms already charge what the market will bear. If Costco’s volume justifies a discount, that doesn’t mean suppliers can or should charge higher prices to other buyers. Yes, there are models where costs change with volume but costs could go down with volume and, in any case, those models don’t rely on the folk theory of “making up the difference.”
That’s one of the subtler mistakes. Here’s a more glaring one:
Consider eggs. At the independent supermarket near my apartment, the price for a dozen white eggs last week was $5.99. At a major national retailer a few blocks away, it was $3.99. (For an identical box of cereal, the price difference was $3.) Any number of factors may contribute to a given price, but market power is a particularly consequential one.
Read that again: the firm allegedly abusing market power is the one charging less.
It gets stranger:
New York City has a strong price gouging law on the books, which forbids anyone — suppliers and retailers — from jacking up prices during a state of emergency unless the seller’s own costs have gone up accordingly. The city couldn’t have stopped the bird flu that devastated flocks, but maybe it can stop suppliers from cynically exploiting a crisis to justify exorbitant prices.
This makes two errors. First, she acknowledges it’s not gouging if costs rise—then cites egg prices rising due to the bird flu devastating flocks. That’s literally a textbook case of a supply shock. Maybe some firms exploited the crisis—but eggs rising in price after millions of chickens are killed is the best example you’ve got???
Second, within the span of a few paragraphs, the op-ed veers from claiming large retailers charge prices that are unfairly low to blaming them for charging prices that are too high. I’m surprised she didn’t go for the trifecta and accuse them of colluding to charge the same price.
The Paradox of India
Tyler often talks about cracking cultural codes. India is the hardest—and therefore the most fascinating—cultural code I’ve encountered. The superb post The Paradox of India by Samir Varma helps to unlock some of these codes. Varma is good at describing:
In 2004, something extraordinary happened that perfectly captured India’s unique nature: A Roman Catholic woman (Sonia Gandhi) voluntarily gave up the Prime Ministership to a Sikh (Manmohan Singh) in a ceremony presided over by a Muslim President (A.P.J. Abdul Kalam) in a Hindu-majority country.
And nobody commented on it.
Think about that. In how many countries could this happen without it being THE story? In India, the headlines focused on economic policy and coalition politics. The religious identities of the key players were barely mentioned because, well, what would be the point? This is how India works.
This wasn’t tolerance—it was something deeper. It was the lived experience of a civilization where your accountant might be Jain, your doctor Parsi, your mechanic Muslim, your teacher Christian, and your vegetable vendor Hindu. Where festival holidays meant everyone got days off for Diwali, Eid, Christmas, Guru Nanak Jayanti, and Good Friday. Where secularism isn’t the absence of religion but the presence of all religions.
But goes beyond that:
You might be thinking: “This is fascinating, but I’m not Indian. I can’t draw on 5,000 years of civilizational memory. How does any of this help me navigate my increasingly polarized world?”
Here’s what I’ve learned from watching India work its magic: The mental moves that make pluralism possible aren’t mystical—they’re learnable. Think of them as cognitive tools:
The And/And Instead of Either/Or: When faced with contradictions, resist the Western urge to resolve them. Can something be both sacred and commercial? Both ancient and modern? Both yours and mine? Indians instinctively answer yes.
Contextual Truth Over Universal Law: What’s right for a Jain isn’t right for a Bengali, and that’s okay. Truth can be plural without being relative. Multiple valid perspectives can coexist without canceling each other out.
Strategic Ambiguity as Wisdom: Not everything needs to be defined, categorized, and resolved. Sometimes the wisest response is a head waggle that means yes, no, and maybe all at once.
Code-Switching as a Life Skill: Indians don’t just switch languages—they switch entire worldviews depending on context. At work, modern. At home, traditional. With friends, fusion. This isn’t hypocrisy; it’s sophisticated social navigation.
The lesson isn’t “be more tolerant.” It’s “develop comfort with unresolved multiplicity.” In a world demanding you pick sides, the Indian model suggests a radical alternative: Don’t.
In our age of rising nationalism and cultural purism, when countries are building walls and communities are retreating into echo chambers, India stands as a glorious, maddening, inspiring mess—proof that diversity isn’t just manageable but might be the secret to civilizational immortality.
After all, it’s hard to kill something that contains multitudes. When one part struggles, another thrives. When one tradition calcifies, another innovates. When one community turns inward, another builds bridges.
It’s not a bug. It’s a feature.
And maybe, just maybe, it’s exactly what the world needs to remember right now.
Read the whole thing. Part 1 of 3.
Tyler Cowen travel tips
That is my latest column in The Free Press. Here is one excerpt from the middle:
I am a fan of going places where things are happening, whether good news or bad, at least if the locales are sufficiently safe. When communism fell, I rented a car and drove around Eastern Europe for one of my most interesting and memorable trips. More recently, I visited El Salvador and Argentina (repeat visits in both cases) to see what was going on with El Salvador president Nayib Bukele’s radical imprisonment policies and the free-market reforms of Argentina’s Javier Milei. I do not pretend to completely grasp the problems of either country, but my understanding is richer than before. I also found that the locals are keen to narrate their points of view, which makes the trip more interesting.
And from the very end:
Finally, I have a radical travel suggestion. Perhaps it is not for families or for the frail, but seasoned travelers should consider it. Imagine you have been to many places, and you are wondering where to go next. Select a country (putting aside danger) where you are quite sure you do not want to go, simply because it does not interest you much. Go there.
The point is that your instincts can be quite wrong about places you have not seen. What’s more, if you go with low expectations, there is a high likelihood you will be pleasantly surprised. Under my proposed method, you will not be disappointed.
When I started traveling, I thought I would love Southeast Asia most, but over time my true affections turned toward Latin America. A few years back I ended up in Baku, Azerbaijan, not because I really wanted to go, but because going through Baku was the easiest way to get to my final destination. The same was true for my trip to Pristina, Kosovo (“where can I fly direct from Zurich airport, where I have not already been?”). Both were fantastic experiences, more interesting, and also easier than I had been expecting.
So often in travel, our greatest enemies are inertia and status quo bias. Recognize that change is real, and that you need some yourself. Isn’t that why you are traveling in the first place?
Do it!
The anti-alcohol campaign in the USSR
Although alcohol consumption remains high in many countries, causal evidence on its effects at the societal level is limited because sustained, society-wide reductions in alcohol consumption rarely occur. We take advantage of a country-wide 1985-1990 anti-alcohol campaign in the Soviet Union that resulted in immediate, substantial and sustained reductions in alcohol consumption. We exploit regional differences in precampaign alcohol related mortality in the Russian republic and show immediate declines in male and female adult mortality in urban and rural areas across the entire age distribution, which translate into a rise in life expectancy. The campaign led to a substantial decline in deaths that are both directly (alcohol poisoning, homicides and suicides) and indirectly linked to alcohol consumption (respiratory and infectious). We find a decline in infant mortality rates among boys and girls due to causes most affected by post-natal parental behavior (choking and respiratory). Finally, both divorce and fertility rates rose, while abortions and maternal mortality due to abortions declined. This study provides novel evidence that alcohol consumption not only directly affects the mortality of drinkers but can have spillover effects on family outcomes.
That is from a recent paper by Elizabeth Brainerd and Olga Malkova.
Calgary is resuming with fluoride, and Quebec fact of the day
The taste and smell won’t change, but starting on Monday something was different about Calgary’s water supply — fluoride is back in the taps across the city in Western Canada.
Fluoride, a mineral found in water, has widely established dental benefits shown to strengthen the tooth surface, or enamel, and help prevent decay.
Calgary stopped adding fluoride to its water supply in 2011, deciding that the cost to treat its system with the mineral outweighed the benefits.
But a push by city residents coupled by worsening oral health among children has led Calgary officials to reverse course…
In Canada, roughly 39 percent of Canadians have access to fluoridated water, a government report says, and availability varies greatly across provinces. Less than 2 percent of the population in Quebec and British Columbia, the second- and third-largest provinces in Canada after Ontario, fluoridate their water.
Here is more from the NYT.
Flying on Frying Oil
The ever-excellent Matt Levine points us to the amusing economic policies that connect the international jet-set to Malaysian street hawkers of fried noodles. The EU and the US have created strong economic incentives to create sustainable aviation fuel (SAF) and a good way to do this is to recycle used cooking oil (UCO). What could be better, right? Take a waste product and turn it into jet fuel! The EU and US policies, however, are so strong that all the EU and US used cooking oil cannot meet the demand. Here’s a great sentence, “Europe simply cannot collect enough used cooking oil to fly its planes.”
In the US, credits under the Inflation Reduction Act can account for up to $1.75 to $1.85 per gallon of SAF. Meanwhile cooking oil is subsidized in some 
parts of the world. The result?
It turns out that restaurants, street food stalls and home cooks in Malaysia — which is “among the world’s leading suppliers of both UCO and virgin palm oil” — will pay less for fresh cooking oil than the international market will pay for used cooking oil. Fresh cooking oil is more useful to cooks than used cooking oil (it tastes better), but it is less useful to refiners and airlines than used cooking oil (it doesn’t reduce their carbon impact). Also fresh cooking oil is subsidized by the government in Malaysia: “Subsidised cooking oil sells for RM2.50 per kg versus the UCO trading price of up to RM4.50 per kg.” So if you run a restaurant, you can buy fresh cooking oil for about $0.60 (USD), use it to fry food a few times, and then sell it to a refiner for $1, which is a nice little subsidy for the difficult, risky, low-margin business of running a restaurant.
The noodle hawkers in Kuala Lumpur are getting a nice little bump in profit but who is going stall to stall to check that the oil is in fact used? And what counts as used? One fry or two? Clever entrepreneurs have cut out the middleman. Virgin palm oil can be substituted for used cooking oil and voila! Sustainable aviation fuel is contributing to deforestation in Malaysia. Malaysia exports far more “used” cooking oil than oil that it uses. No surprise.
All of this illustrates a broader point: externalities suggest policy interventions may improve outcomes but markets are complex and politics is blunt. It’s easy to make things worse. If intervention is necessary, a uniform carbon tax beats a patchwork of production-specific subsidies. A price is a signal wrapped up in an incentive. Send everyone the same signal and the same incentive to ensure that the cheapest emissions are cut first and total costs are minimized.
Crucially, a carbon tax rewards any effective solution, even ones a planner would never think of–lighter planes and cleaner fuels sure but also operational tweaks like jet washes. In contrast, subsidies tether policy to specific technologies, like used cooking oil. That invites rent-seeking and inefficiency.
Tax carbon, not inputs. Avoid games with paperwork. One verification point at the fuel supply point is simpler than tracing global waste-oil chains. Don’t subsidize the fry oil and audit the street hawkers. Tax the emissions.
Canine supply was elastic, too, South Korea edition
South Korea has now banned the dog meat trade:
Chan-woo has 18 months to get rid of 600 dogs.
After that, the 33-year-old meat farmer – who we agreed to anonymise for fear of backlash – faces a penalty of up to two years in prison.
“Realistically, even just on my farm, I can’t process the number of dogs I have in that time,” he says. “At this point I’ve invested all of my assets [into the farm] – and yet they are not even taking the dogs.”
By “they”, Chan-woo doesn’t just mean the traders and butchers who, prior to the ban, would buy an average of half a dozen dogs per week.
He’s also referring to the animal rights activists and authorities who in his view, having fought so hard to outlaw the dog meat trade, have no clear plan for what to do with the leftover animals – of which there are close to 500,000, according to government estimates.
“They [the authorities] passed the law without any real plan, and now they’re saying they can’t even take the dogs.”
…A spokesperson from the Ministry of Agriculture, Food and Rural Affairs (Mafra) told the BBC that if farm owners gave up their dogs, local governments would assume ownership and manage them in shelters.
Here is the full BBC story, via Rich Dewey.
Have Appliances Declined in Durability?
Many Americans believe that their appliances have become less durable and reliable over recent decades. Rachel Wharton at Wirecutter has an excellent piece pushing back. Her conclusions mirror what I found when looking at clothing quality: yes, there has been a modest decline in durability, but the main drivers are customer preferences, regulatory shifts, and Baumol effects—not corporate malfeasance or cultural decline.
“Everybody talks about the Maytag washing machine that lasts 50 years,” said Daniel Conrad, a former product engineer at Whirlpool Corporation who is now the director of design quality, reliability, and testing for a commercial-refrigeration company. “No one talks about the other 4.5 million that didn’t last that long.”
The available evidence suggests that appliance lifespans have decreased only modestly over the past few decades. Recent research from the Association of Home Appliance Manufacturers trade group shows that in 2010 most appliances lasted from 11 to 16 years. By 2019, those numbers had dropped, to a range of nine to 14 years. (In some cases, such as for gas ranges and dryers, the lifespans actually increased.)
The modest decline is partially explained by regulation:
Every appliance service technician I spoke to — each with decades of experience repairing machines from multiple brands — immediately blamed federal regulations for water and energy efficiency for most frustrations with modern appliances.
…The main culprit is the set of efficiency standards for water and energy use for all cooking, refrigeration, and cleaning appliances.
The regulations change often and push producers to make changes that consumers don’t necessarily want like switching to lighter plastic parts rather than metal or by adding sophisticated computer controls that increase efficiency but also introduce new break points. See my previous posts on these issues here and here.
But as with clothing, another reason for reduced durability is that many consumers don’t want durable appliances–instead consumers want the latest model with all the whizz-bang features. (Sure, I don’t want this and you don’t want it but heh, they sell!) In other words, appliances and their colors, features and styles have become items of fashion.
And people’s desire for new things only appears to be growing. Petrino Ball said her sales research at AJ Madison showed that today consumers are buying new appliances every eight years, even if what they had before hasn’t fully failed.
…Whitney Welch, a spokesperson for GE Appliances, told me that its research showed consumers are often replacing appliances for aesthetic reasons….
If many customers don’t want to keep appliances for more than 10 years then it doesn’t pay to make them last more than 10 years.
The big story isn’t declining durability but declining price:
In 1972, Sears sold a clothes washer for $220 and a dryer for $90, per 2022 research by AARP Magazine. That’s about $2,389 in 2025, adjusted for inflation. Today you can get a washer-and-dryer pair on sale from Sears for around $1,200.
The Baumol effect means that repair is rising in price relative to buying new which is another reason why we don’t keep products around as long as we did when we were poorer and it it made sense to fix broken goods:
….prices on most new models are so low, his first suggestion to customers is to just replace the appliance. “If the cost of repair is 50% of replacement, throw it cleanly away,” he said. “If it’s 40%, consider the option.”
“Labor is highly skilled,” he added. “It can’t compete with low prices.”
In many cases, it can’t compete with lost time, either. Repairs often require waiting a few days or weeks for parts, said Petrino Ball. “Even one day without a washer-dryer or fridge is really hard for many families,” she said, “but if you buy one, you can have it the next day.”
Moreover, as I argued with clothes, it is possible to find durable appliances if you shop carefully. Interestingly, Wharton notes that you can either go high or low. The top-of-the-line appliances from Sub-Zero and Wolf do last longer but they are very expensive and often do not include whizz-bang features. Alternatively, you can go low–buy a GE or Sears refrigerator and get it without frills–no ice or water dispenser, no electronics, no lux colors and chances are it will last a long time.
In short, appliance durability hasn’t collapsed—it’s evolved to meet consumer demand. We’re not being ripped off. We are getting better products at better prices. Rising incomes have simply redefined what “better” means.
Bordeaux observations
The central core is one of the most consistent eighteenth century cities you will find in Europe. Until the visit, my first there, I had not realized how much of the town’s growth came during that time, in part because of some special trade privileges, and in part because of the slave trade. Here is some 18th century economic history of Bordeaux. The central plazas and radiating streets are splendid, as is the large Girondins monument nearby.
The main museum is subpar, with some good Redons (he is from there), and the main church is pretty good but excelled by other locales. In this sense there is not much to do in Bordeaux. There is, however, some good modern and also brutalist architecture near and across the main river bank. Check out this bridge. I enjoyed these creations, as they injected some element of surprise into my visit.
You can still get an excellent meal at the nearby country chateaus, but if you just stop for normal French food in the town it is pretty mediocre, not better than say WDC. The classic French food traditions are moving more and more into corners of the country, and away from everyday life.
Typically I am surprised by how normal France feels. People want to say “The French this, the French that…” but to me they are fairly Americanized, often speak good English, and have few truly unique cultural habits these days. They also seem reasonably well adjusted, normal mostly in the good sense, and thus of course somewhat boring too.
Walking and driving through the less salubrious parts of town is a useful corrective, but I do not feel the place is falling apart. And the best estimates are that six to nine percent of the city is Muslim, hardly an overwhelming number.
I learned just before leaving that Kevin Bryan was in town too, here are his observations. Bordeaux is certainly worth visiting, but I also am not surprised it is the last major French city I have been to in my life.
Hayek Goes Supersonic
When I post about lifting the ban on supersonic flight, smart commenters show up with charts: optimal fuel burn is at Mach 0.78–0.84, they say, or no one wants to pay thousands to save a few hours. Maybe. But my reply is always the same: Bottled water!
In 2024, Americans spent $47 billion a year on H₂O that they could get for nearly free. That still boggles my mind—but bottled water has passed the market test. I argue for lifting the SST ban, and similar policies, not because we know supersonics will work but because we don’t. Hayek reminds us that competition is a discovery procedure. Like science, markets generate knowledge by experiment—hypotheses are posted as prices, and the public accepts or rejects them through revealed preference. Fred Smith’s FedEx plan got a “C” in the classroom, but the market graded the experiment and returned an A in equity. Theory is great, but just as in science, there is no substitute for running the experiment.
Travel bleg for Avila, Salamanca, Segovia, and other smaller places nearby
Your suggestions are most welcome, thank you!
The Bank of Starbucks
Connor Tabarrok points out that Starbucks is also a bit of a bank:
In 2011, Starbucks rolled out the ability to load money onto a virtual card via their mobile app. purchases made with these pre-loaded dollars earned extra rewards points, which could eventually be redeemed for free drinks. According to their quarterly report from this March, through the app pre-payment system and physical gift cards, Starbucks owes almost $2 billion in coffee to it’s customers.
…The company can treat this money as a 0% interest loan, and with about 10% of funds eventually being forgotten, it’s actually a negative interest loan.
Starbucks can make money on the float and it makes more money as interest rates rise. At $2 billion and 4% they can earn about $80 million annually on the float. Moreover, breakage (some money on the cards is never redeemed) is running at about 10% so that’s another $200 million a year for a grand total of $280 million or a little over 5% of the $5 billion in operating profit. Not a game changer but also not bad for free money.
As interest rates rise, the value to Starbucks of pre-loaded cards increases. So does the cost to users but I suspect supply incentives will dominate here so you can expect to see Starbuck’s pushing these cards.
H5N1 Hasn’t Gone Away
Trump dominates the news cycle but it’s important to remember that events continue even when not watched. In particular, we are not winning against H5N1. Here’s a summary of a recent paper in Science:
High-pathogenicity avian influenza subtype H5N1 is now present throughout the US, and possibly beyond. More cattle infections elevate the risk of the virus evolving the capacity to transmit between humans, potentially with high fatality rates. Nguyen et al. show that from a single transmission event from a wild bird to dairy cattle in December 2023, there has been cattle-to-poultry, cattle-to-peridomestic bird, and cattle-to-other mammal transmission. The movement of asymptomatic dairy cattle has facilitated the rapid dissemination of H5N1 from Texas across the US. Evolution within cattle, assessed using deep-sequencing data, has detected low-frequency sequence variants that had previously been associated with mammalian adaptation and transmission efficiency.
Our non-eggcellent regulations
Germany, Italy, Poland and Sweden are among the nations the U.S. Department of Agriculture approached to address the shortage brought on by a bird flu outbreak, according to European industry groups.
But supplying Americans with eggs would be complicated for foreign producers — but not because of political tensions over the myriad import tariffs President Donald Trump has imposed or threatened to impose on his nation’s top trading partners.
Even if they were eager to share, European countries don’t have many surplus eggs because of their own avian flu outbreaks and the growing domestic demand ahead of Easter.
One of the biggest obstacles, however, is the approach the United States takes to preventing salmonella contamination. U.S. food safety regulations require fresh eggs to be sanitized and refrigerated before they reach shoppers; in the European Union, safety standards call for Grade A eggs to be sold unwashed and without extended chilling.
Here is the full story, via Rich Dewey. So no, American scientists will not be moving to Europe — their eggs are too dangerous. And yes it is Germany too:
It is common in parts of Europe, for example, for consumers to buy eggs that still have feathers and chicken poop stuck to them.
Here is Patrick Collison, comparing the virtues of America to the virtues of Europe. I do not mind that he left out the chicken poop, for me it is a sign of authenticity. As for eggs, the best ones I ever had were in Chile.
America’s Tourism Deficit: How the French Are Winning the Currency War One Croissant at a Time
Every year, American tourists pour billions of dollars into France, wandering the Louvre, sipping overpriced espresso in Montmartre, and snapping selfies along the Seine—while far fewer French tourists bother making the reverse pilgrimage to admire, say, Disney World. The result? A massive tourism deficit.
On paper, this reflects wealth differentials and revealed preferences – Americans, being richer and more numerous than the French, express a high demand for old world Parisian experiences. But behind this innocent wanderlust is something more sinister. When Americans vacation in France, that’s counted as a US import of tourism. When French people vacation here—fewer, more begrudgingly—that’s a US export. So voilà, the tourism deficit creates a trade deficit, an excess of imports over exports!
The tourism deficit means there is a steady leak of the world’s reserve currency into the hands of a nation famous for its cheese, wine, and suspicion of American capitalism. France, using little more than museums and moodiness, is accumulating dollars from innocent American travelers. And they’re not just hoarding them for kicks. Those dollars are claims on real assets. First it’s a Napa vineyard. Then a Brooklyn fintech startup. Eventually, who knows? The Port of Long Beach? The Federal Reserve’s snack bar?
Make no mistake: France’s true comparative advantage isn’t wine or luxury goods—it’s the ruthless extraction of tourism dollars, performed with flawless precision, a disdainful shrug, and a little help from Emily in Paris. We’re being out-traded, one overpriced pastry at a time, by a nation whose strategic horizon spans centuries—and whose Netflix marketing is impeccable.
The political implications are, shall we say, obvious.
From now on, we demand a tourism balance. No more visa waivers, no more jet-setting to Provence until they send an equal number of French tourists to Branson, Missouri. It’s high time the French get over their Napoleon complex and start to appreciate American corn dogs and Dolly Parton. France needs to treat us with the same respect as the friendly countries that enthusiastically dispatch high-spending tourists to our shores.
It’s one-for-one, or the deal is off. Tourism parity or rien! Point final.