On a recent trip to Krakow, Poland, I had the opportunity to spend a week (inter alia) walking the Old Town and observing a very fascinating aspect of the market in action – or inaction, as it appeared at times. On my strolls through this historic district, I focused my economic eye on the street mimes – performers who provided me with entertainment and a muse to ponder the market.
Now this was not the first time I witnessed street mimes in action. But it was the first time I saw so many in such a relatively small area. For those unaware, a street mime dresses in an exaggerated costume and remains motionless, approximating a statue, until someone drops a coin1 in the box situated at his feet. Triggered by the clang of the coin, the mime begins moving in hyperbolic motions. He reaches down and picks up the coin, looks at it, and then deposits it in his pocket. Finally, the mime quickly readjusts his costume and returns to his statue-like position, remaining motionless until the next coin is dropped.
The first time I saw a mime, I was pleasantly surprised – a statue that came to life before my eyes. Soon, however, as I noticed more mimes, my surprise diminished. Nevertheless, the details unique to each mime continued to draw my attention and subtle amazement.
Free riding through Krakow
During my visit to Krakow, there were a large number of mimes working the Old Town, each homesteading his own little area. And being that the streets and sidewalks of the Old Town are the public commons, so to speak, homesteading occurred anew, every morning.
Daily, the Old Town filled with tourists. While each mime staked his claim, the area around him remained open for all. So his performance could be observed by those whose view was not blocked by others – exclusion from the mime’s standpoint was impossible. Every so often, someone would drop a coin and the mime would entertain all who could see. In essence, there were 25 or so free riders for every coin dropper. Yes, I dropped some coins in boxes, but I was entertained for free many more times than I paid. And from my accounting, most observers never dropped even one coin. Still, the market worked – and it worked without government intervention, despite the supposed free rider problem.
An equilibrium
Just like all aspects of the greater market, I assume the market for mimes tends toward equilibrium. Tourist resources are limited, so there are only so many coins falling into boxes on any given day. And each mime is subject to the realities of alternate costs, since each forgoes some other source of income in order to stand motionless in the (during my trip, anyway) hot sun.
Each additional mime staking a morning claim reduces the amount of take-home coins for the returning mimes (for some mimes, anyway). As these new mimes, looking for an income better than their next best alternative, enter the market, other mimes exit the market in order to seek their best alternate income.
This healthy competition improves the quality of mimes in any given area. The best – as defined by the market – survive. And this is important: the best from the standpoint of the market survive, given alternate costs, etc. Not the best from my point of view, but the best from the view of the market in general.
I note this because some of the mimes I thought were not even worth a grosz were receiving more zlotys than those I rated much higher. Of course, I voted my groszy and zlotys based on my preferences, just like everyone else. And then the market decides who returns to the Old Town the following morning and who seeks alternate employment.
Creative destruction
Overtime, as more tourists experience street mimes, and as more mimes enter the market, the entertainment value of street mimes in general is reduced. In addition, a mime only owns his unique delivery since every other aspect of his performance – costume, movements, etc. – can be copied. Because of this, each mime is pressured to improve or innovate in order to continue attracting tourist dollars. And if the mime does not react to the market, in a manner that pleases the market, the process of creative destruction forces him to seek an income elsewhere.
A bad dream, or a regulatory nightmare
For some mimes, this pressure to improve and innovate must be a burden. And the vagaries of the market must add additional stress. If only the market could be controlled and the wants of the individual tourists trumped, then the life of mimes would improve. Or so the thought goes.
I can easily imagine a group of mimes seeking government regulations in order to obtain government protection – government protection from the consumer. The mimes may ask, “Should anyone be allowed to become a mime? Is that really best for the community – for the Old Town?” With a little effort and some elbow bending, a sympathetic government official might be found. And this man could initiate the process to hamper the market – all in the name of the greater good.
The government official would think, “Who better to assist with the regulations than those closest to the profession?” So the current mimes would have a seat at the table and would grant themselves carve-outs and grandfathered exemptions, all with the implicit goal of discouraging new mimes from entering the market.
Of course, those who gained entry would be afforded government protection because they are now “qualified.” But never confuse “qualified” as defined by the government with quality as defined by consumers acting to satisfy their individual wants in the market. These two are worlds apart.
Sadly, the tourists, unable to know the potential entertainment value lost to regulations, may even come to accept the hampered market as best, viewing the supposed public good of government control as being beneficial to the market in general.
The market is still relatively free
Of course, my preceding vision is not reality – for the market of mimes, anyway. Instead, this market mixes scarce labor and resources in a manner that produces value. But that conclusion is simply a tautology.
Notes:
1. Technically, these are tokens.
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