Who do CAMRA belong to? What does the existence of this Campaign imply for capitalism and society?
Rick argues that the brewing industry’s failure to anticipate CAMRA and forestall its demands represent a failure of capitalism. Because…
according to the classical economic theory that is still fetishized in some parts of the blogosphere, an organisation like CAMRA should be unnecessary. Markets react to supply and demand. If there is enough demand for traditional beer, so the story goes, new firms will enter the market to satisfy that demand. However, when you look at what firms actually do, rather than what the theory says they do, the reality of markets is different. In many sectors, firms adopt industry standards which enable them to promote their collective interests at the expense of customers.
Tim disagrees, and argues that the voluntary pressure group is a natural part of capitalism. He characteristically caustically launches a broadside in defence of textbook economics with his “The stupid, it hurts!” Personally, I think Rick has called this wrong, but he has done so in an interesting way. I also think Tim is a big fat meanie, and he is too quick to use others’ interesting mistakes to cement his biases, rather than using them to test them.
Most academic economists and economic textbooks have very little on firms, invention, innovation, and entrepreneurship. Despite this year’s Nobel Prize winners interest in search costs, that too is still under-researched. It doesn’t have to be this way, Schumpeter knew the importance of innovation, but many others have forgotten, or never learned. A lot of vulgar libertarians fall into one of these two groups.
Some insist that the market will deliver so long as the state gets out the way, however they usually offer precious little detail on how the market will in fact operate (often using the excuse that predicting things is hard as an excuse not to bother, rather than giving it their best shot, as an actual entrepreneur would).
Others insist entrepreneurs will fill any void worth filling, but these have the opposite problem of offering precious little detail on the macro consequences of this. Entrepreneurs may well delivery, but when and what happens in the meantime are usually left out of these analyses.
Rick was railing against an all too common misconception that markets are automatic and that good things happen when government gets out the way. That is expressly not the case. There is no market, merely endless experiments, many failures and a few successes. Libertarians very often exaggerate the speed with which markets achieve equilibrium and the costs and difficulties of them doing so, and it is right that this be made clear.
However, CAMRA are not so much anti-capitalist as a subsidy for capitalists. They are a completely free market research council which the drinks industry has used to reduce the costs of finding out what market to (re)enter. If CAMRA had flopped we would still all be drinking “Australian” Fosters brewed in Wales, but as they have gained members they have revealed the existence of a profitable market which brewers once thought it best to leave.