The direction of all economic affairs is in the market society a task of the entrepreneurs. Theirs is the control of production. They are at the helm and steer the ship. A superficial observer would believe that they are supreme. But they are not. They are bound to obey unconditionally the captain’s orders. The captain is the consumer. Neither the entrepreneurs nor the farmers nor the capitalists determine what has to be produced. The consumers do that. If a businessman does not strictly obey the orders of the public as they are conveyed to him by the structure of market prices, he suffers losses, he goes bankrupt, and is thus removed from his eminent position at the helm. Other men who did better in satisfying the demand of the consumers replace him. — Mises, Human Action
Mises never ventured into one of Bill Yerkes’s pizza shops. For if he had, he never would have written those words above. You see, Yerkes — the self-proclaimed “Pizza Nazi” of Central Ohio — takes orders from no man. In his shops, he alone is supreme.
OK, to be exact, Yerkes does take food orders, but he determines what he produces in his shops; he determines the menu and the presentation. And if you don’t like it, take a hike. Do not believe me? Visit a Bono Pizza shop and test him yourself … if you dare.
Now, Yerkes is not the only recalcitrant entrepreneur. Pittsburgh has its Primanti Brothers. In these restaurants, each sandwich is topped with fries and coleslaw — that’s right, the fries and coleslaw go between the bread. And if you ask for either on the side, they’ll direct you out the door and to the Wendy’s across the street.
Given that these two examples seemingly refute Mises, I have to ask this question: How could Mises have built the science of economics on such a glaring error? The consumer as the captain. Huh!
Ok, so what is really going on here? Both of these business models have been successful in their respective cities. Oh, sure, the owners and employees huff and puff on their turf, but they can do so only because the consumer is willing to enter their stores in order to purchase their offerings. And what offerings indeed.
Bono pizza is a blend of imported cheeses, delicious meats, and fresh vegetables, cooked in one of Yerkes own patented wood-fired ovens. The crust is a handmade, hand-tossed delight. And then there is the sauce. Bono Pizza is the best pizza around.
Primanti sandwiches are also tasty meals. While I am not a big fan off fries, adding them to a mess of coleslaw and a grilled meat, all smashed between slices of Italian bread, creates a sloppy, hearty mess. Very Pittsburgh, and very good.
It is amazing the number of sins that good food can cover. However, I am being too harsh. Yerkes is an excellent host, as long as you play by the house rules — his rules. And Primantis is always a warm spot to relax and eat. Of course, they both have to be.
Mises never claimed an entrepreneur could not decide what he produces. Mises simply noted the truth that an entrepreneur can stay in business if and only if he produces that which the consumer desires. Should the product that the entrepreneur desires to produce coincide with the product that the consumer desires to purchase, all the better. However, life does not have to be so Pollyannaish.
In the market, the entrepreneur does not need to have a great attachment to his product, certainly not to the extreme of the Yerkes and Primantis of the world. The entrepreneur likely does not care what he produces. Oh, sure, he may enjoy making a certain product in a certain manner, but most companies with staying power are more sensitive to the wants of the consumer than to the products they produce.
If they were not, the consumer would seek out the entrepreneur willing to satisfy current desires. You see it all the time as stores and restaurants come into favor, and then quickly go out of favor. The entrepreneur who senses changing preferences can keep his position at the helm. Not the captain, mind you, just the helmsman keeping the ship on the ever-changing course of consumer desires.
Mises was not refuted, and his passage above remains correct. There is room for Yerkes and Primantis in the science of economics. They will keep their shops only as long as the consumer desires their food. Should preferences change, and Yerkes and Primantis remain obstinate, they will be forced to relinquish the helm — and their capital — and become captains once again.
