A Crime Beyond Denunciation
The works of the roots of the vines, of the trees, must be destroyed to keep up the price, and this is the saddest, bitterest thing of all. Carloads of oranges dumped on the ground. The people came for miles to take the fruit, but this could not be. How would they buy oranges at twenty cents a dozen if they could drive out and pick them up? And men with hoses squirt kerosene on the oranges, and they are angry at the crime, angry at the people who have come to take the fruit. A million people hungry, needing the fruit–and kerosene sprayed over the golden mountains.
And the smell of rot fills the country.
Burn coffee for fuel in the ships. Burn corn to keep warm, it makes a hot fire. Dump potatoes in the rivers and place guards along the banks to keep the hungry people from fishing them out. Slaughter the pigs and bury them, and let the putrescence drip down into the earth.The Grapes of Wrath, John Steinbeck
I had used the double auction experiment to teach the lesson of price floors many times prior to teaching Humanomics, but never as effectively as when in the context of reading chapter 25 of The Grapes of Wrath. It is one thing to use a graph and an experiment to explain why some people do not get to buy a commodity because the government is supporting higher prices for farmers, but it is quite another when that same policy is ruthlessly enforced while people are starving.
In the above graph from the classroom experiment, the red triangles are offers to sell and blue triangles bids to buy with the restriction that all bids and asks must be greater than or equal to $4.75. The blue step function is the induced demand for poker chips and the red step function the induced supply. When I conduct the experiment, I go around, after the buyers stop buying, and purchase all the poker chips that the sellers are willing to sell at the price floor. Then I put them in a bowl and announce, in front of the buyers who haven’t bought anything, that I’m burning them. Cheesy, I know, but it raises the important point for discussion that government officials and farmers had convinced themselves that they were doing the right thing when people were starving right in front of their very eyes. Somehow they reasoned aside their humanity with misguided intentions to jumpstart the economy. Their anger towards the starving blinded them from the immediate, gut-wrenching consequences of their actions.
Whenever the New Deal is glorified, remember this:
There is a crime here that goes beyond denunciation. There is a sorrow here that weeping cannot symbolize. There is a failure here that topples all our success.The Grapes of Wrath