WEBVTT NOTE 35. The Economics of Happy Feet 1 00:00:00.000 --> 00:00:04.000 The Economics of Happy Feet 2 00:00:04.000 --> 00:00:10.000 Gary North recently suggested that we count our capitalist blessings and name them one by one, 3 00:00:10.000 --> 00:00:16.000 while inviting people to add to a list that would be inexhaustible. 4 00:00:16.000 --> 00:00:20.000 My addition, shoes. 5 00:00:20.000 --> 00:00:23.000 For years I've read to my kids a story about a cobbler and his wife, 6 00:00:23.000 --> 00:00:29.000 who can't seem to make enough shoes to bring in enough revenue to put food on the table. 7 00:00:29.000 --> 00:00:34.960 One day they wake to find a pair of fabulous, fully finished shoes on the work table. 8 00:00:34.960 --> 00:00:36.360 They put them in the display case. 9 00:00:36.360 --> 00:00:39.480 The shoes sell immediately and for a high price. 10 00:00:39.480 --> 00:00:42.960 The same happens the next night. 11 00:00:42.960 --> 00:00:47.200 They stay up the next night to discover tiny elves have taken pity on this hard-working 12 00:00:47.200 --> 00:00:51.040 couple and made shoes for them to sell. 13 00:00:51.040 --> 00:00:55.800 Once prosperous, they pay back the elves by making tiny shoes for them. 14 00:00:55.800 --> 00:01:01.960 And thus is the old saying that, him that makes shoes goes barefoot himself, made false, 15 00:01:01.960 --> 00:01:08.400 by the intervention of benevolent visitors from the world of fantasy. 16 00:01:08.400 --> 00:01:12.840 These days, the fantasy of such a story stretches in every direction. 17 00:01:12.840 --> 00:01:17.840 There are no more cobblers who make shoes – well, there are some who cater to highly 18 00:01:17.840 --> 00:01:20.200 specialized foot issues. 19 00:01:20.200 --> 00:01:26.220 There are people who repair shoes, and we call them cobblers for nostalgic reasons. 20 00:01:26.220 --> 00:01:31.480 If we go back far enough in time, we can see that, in the greatest portion of known history, 21 00:01:31.480 --> 00:01:38.080 shoes consisted of nothing but wrapped animal skin, bark or leaves. 22 00:01:38.080 --> 00:01:43.720 The stage of economic development that permitted people to specialize in making shoes was itself 23 00:01:43.720 --> 00:01:45.920 a great step forward. 24 00:01:45.920 --> 00:01:52.040 And yet today, the specialisation of shoemaking itself has been displaced, but for eccentrics 25 00:01:52.040 --> 00:01:57.960 who choose to re-enact their making and even pay for them, just as some people like vinyl 26 00:01:57.960 --> 00:01:58.960 records. 27 00:01:58.960 --> 00:02:04.560 We've all had the experience of reading old works of literature and finding that various 28 00:02:04.560 --> 00:02:10.600 shoe miseries and dramas play a huge factor in daily life. 29 00:02:10.600 --> 00:02:15.340 We read long details of the way in which shoes are falling apart and bringing about terrible 30 00:02:15.340 --> 00:02:19.940 People, pains, and how difficult it was to find a new pair. 31 00:02:19.940 --> 00:02:24.620 They were expensive and the wait was long. 32 00:02:24.620 --> 00:02:27.500 Shoes are the subject of great longing. 33 00:02:27.500 --> 00:02:28.500 Cinderella. 34 00:02:28.500 --> 00:02:29.500 Sin. 35 00:02:29.500 --> 00:02:30.980 Anderson's red shoes. 36 00:02:30.980 --> 00:02:31.980 Magic. 37 00:02:31.980 --> 00:02:33.260 Dorothy. 38 00:02:33.260 --> 00:02:34.380 And suffering. 39 00:02:34.380 --> 00:02:36.140 Valley Forge. 40 00:02:36.140 --> 00:02:41.540 They are made and presented at major turning points in life, communion, confirmation, 41 00:02:41.540 --> 00:02:42.920 weddings. 42 00:02:42.920 --> 00:02:46.600 State ceremony was attached to their acquisition. 43 00:02:46.600 --> 00:02:55.480 They were the defining mark of class, nor no more shoes than feet, Shakespeare on poverty. 44 00:02:55.480 --> 00:03:03.360 They were the subject of comment, regulation, sumptuary laws, envy and crime. 45 00:03:03.360 --> 00:03:09.900 Today, because we take the availability of shoes for granted, we can only wonder what 46 00:03:09.900 --> 00:03:12.080 all the fuss was about. 47 00:03:12.080 --> 00:03:18.780 From Data, FYI Americans bought two billion pairs of shoes 48 00:03:18.780 --> 00:03:23.940 last year, mostly women's shoes and sports shoes, made in China. 49 00:03:23.940 --> 00:03:31.240 On this, we spent about 0.65% of our budgets, a figure that has been falling precipitously 50 00:03:31.240 --> 00:03:33.240 for decades. 51 00:03:33.240 --> 00:03:41.520 This is a period when domestic production of shoes has fallen by 75% in 10 years. 52 00:03:41.520 --> 00:03:49.740 Concerning China accounting for 80% of imports, how interesting a turn of events is this? 53 00:03:49.740 --> 00:03:54.320 When capitalists of old used to speak of China, they imagined all the shoes that could be 54 00:03:54.320 --> 00:03:57.620 sold to a country so populous. 55 00:03:57.620 --> 00:04:02.240 Who would have imagined that it would be China that would turn out to be the maker and seller 56 00:04:02.240 --> 00:04:04.720 of shoes to the world? 57 00:04:04.720 --> 00:04:10.200 This represents a reversal of the open-door policy that led to the Marxist rebellion, 58 00:04:10.200 --> 00:04:28.240 The History of Shoes online assumes that in the Middle Ages there were women's shoes 59 00:04:28.240 --> 00:04:33.440 and men's shoes, both dreadfully uncomfortable, and that there were either low-quality or 60 00:04:33.440 --> 00:04:38.960 high-quality shoes available for peasants and elites, respectively. 61 00:04:38.960 --> 00:04:42.920 Those were a coveted mark of social advancement. 62 00:04:42.920 --> 00:04:46.880 That was true for most of history until very recently. 63 00:04:46.880 --> 00:04:52.880 If you enter a shoe store today – and actually even my local grocery store sells shoes – you 64 00:04:52.880 --> 00:04:59.080 find a seemingly infinite variety produced not by elves, but a coordinated international 65 00:04:59.080 --> 00:05:04.820 marketplace of corporations and suppliers and factories that make shoes for all the 66 00:05:04.820 --> 00:05:07.320 feet of the world. 67 00:05:07.320 --> 00:05:12.680 For men, there are what are called work shoes – which today, strangely, means shoes for 68 00:05:12.680 --> 00:05:18.680 manual labour – which are made of hard rubber soles, dress shoes, meaning leather soles 69 00:05:18.680 --> 00:05:24.200 or the faux version with leather uppers with rubber soles, office shoes of hundreds of 70 00:05:24.200 --> 00:05:30.040 varieties of styles that most men wear, and sports shoes designed specifically for leaping 71 00:05:30.040 --> 00:05:35.600 or running or playing tennis or basketball or baseball or anything else. 72 00:05:35.600 --> 00:05:41.080 All chain stores are devoted to selling the hundreds and thousands of styles of sports 73 00:05:41.080 --> 00:05:43.400 shoes alone. 74 00:05:43.400 --> 00:05:49.200 And lest we are tempted to think that this is an example of capitalist redundancy and 75 00:05:49.200 --> 00:05:54.560 repackaging, try running a few miles in a racquetball shoe, as compared with the brilliance 76 00:05:54.560 --> 00:06:00.440 of a running shoe proper, and you discover that there really is a point. 77 00:06:00.440 --> 00:06:02.800 And prices! 78 00:06:02.800 --> 00:06:09.160 You can go to the military surplus store and get excellent dress black for a dollar or 79 00:06:09.160 --> 00:06:10.160 two. 80 00:06:10.160 --> 00:06:14.920 You can pay between $6 and $600 for a pair of sports shoes. 81 00:06:14.920 --> 00:06:17.820 You can do the same for men's dress shoes. 82 00:06:17.820 --> 00:06:23.960 It seems, too, that the prices are always falling for shoes, but it is more likely that, 83 00:06:23.960 --> 00:06:29.620 as always in a market economy, yesterday's luxury good becomes tomorrow's sale item 84 00:06:29.620 --> 00:06:32.120 at Big Lots. 85 00:06:32.120 --> 00:06:36.700 If wearing status shoes is what you seek, you have to act fast, since the poor will be wearing 86 00:06:36.700 --> 00:06:40.860 next week what only the rich wore last week. 87 00:06:40.860 --> 00:06:45.500 As for women's shoes, I would guess that the average consumer has more in her closet 88 00:06:45.500 --> 00:06:49.860 than Marie Antoinette ever dreamed of owning. 89 00:06:49.860 --> 00:06:52.900 And this is true all over the world. 90 00:06:52.900 --> 00:06:59.400 Even in the poorest countries, shoes are available everywhere and at rock-bottom prices. 91 00:06:59.400 --> 00:07:03.200 One of the great miseries of living in the Third World used to be the aches and pains 92 00:07:03.200 --> 00:07:08.000 associated with poor-quality footwear, if you could find it at all. 93 00:07:08.000 --> 00:07:09.880 But no more. 94 00:07:09.880 --> 00:07:15.320 American capitalist excess, which led entrepreneurs to pay workers in China and Indonesia to make 95 00:07:15.320 --> 00:07:20.900 shoes for American consumers, has yielded surpluses that spread affordable shoes to 96 00:07:20.900 --> 00:07:24.680 all corners of the globe. 97 00:07:24.680 --> 00:07:31.080 Today, a peasant in the fields of a Guatemalan village wears shoes that medieval lords would 98 00:07:31.080 --> 00:07:35.180 have traded for their own models made of wood and leather. 99 00:07:35.180 --> 00:07:39.980 Even bums who beg for a living in big cities and want to do their best to look the part 100 00:07:39.980 --> 00:07:45.700 have a hard time finding shoes that look appropriately worn and ragged. 101 00:07:45.700 --> 00:07:51.480 The trash bins are filled not with leather shoes taped and tied together, but only mildly 102 00:07:51.480 --> 00:08:04.880 Shoes all over the world are all of extremely high quality as compared with previous times. 103 00:08:04.880 --> 00:08:09.640 Even in my youth, I can recall that track shoes were black with white stripes and had 104 00:08:09.640 --> 00:08:14.560 a thin little layer of rubber on the bottom that would allow you to feel every pebble beneath 105 00:08:14.560 --> 00:08:15.840 your feet. 106 00:08:15.840 --> 00:08:22.120 Today, a running shoe is a spectacular thing. 107 00:08:22.120 --> 00:08:28.040 With the proper fit, it goes on with a suction sound, hugs and holds your foot, seems to 108 00:08:28.040 --> 00:08:33.040 put jet propulsion at your back, and creates the illusion that you can run up a wall and 109 00:08:33.040 --> 00:08:38.560 across a ceiling, all this without creating a blister even on the first wearing and for 110 00:08:38.560 --> 00:08:41.680 less than forty dollars. 111 00:08:41.680 --> 00:08:48.420 Now, quality might not be the same as long-lasting, of course, which is a feature that is dictated 112 00:08:48.420 --> 00:08:50.680 by consumer preference. 113 00:08:50.680 --> 00:08:56.440 A handmade shoe of the 19th century might have lasted two generations, but we no longer 114 00:08:56.440 --> 00:09:01.560 need or want shoes to last that long, any more than we want our houses to have the enduring 115 00:09:01.560 --> 00:09:05.640 power of medieval churches. 116 00:09:05.640 --> 00:09:10.360 Mostly people would rather buy new, rather than apply new soles. 117 00:09:10.360 --> 00:09:16.320 Of course, for those who do prefer shoes that live generations, those are available too. 118 00:09:16.320 --> 00:09:22.280 And yet this is all rather new to our time, and crucially important for health and wellbeing. 119 00:09:22.280 --> 00:09:26.600 Podiatrists tell us that the bones and tendons in the feet begin to weaken severely with 120 00:09:26.600 --> 00:09:29.360 age, especially past 40. 121 00:09:29.360 --> 00:09:35.400 Now consider that the average life expectancy didn't pass the age of 40 until 1850 in 122 00:09:35.400 --> 00:09:37.400 the US. 123 00:09:37.400 --> 00:09:42.540 Throughout the whole of world history, when shoes were so shabby and miserable, most people 124 00:09:42.540 --> 00:09:46.660 didn't have to worry about weakened foot bones and tendons because they were dead long 125 00:09:46.660 --> 00:09:49.500 before this became a problem. 126 00:09:49.500 --> 00:09:54.600 But now that we are living twice as long as our great-great-grandparents, it becomes crucially 127 00:09:54.600 --> 00:10:00.280 important that we have shoes that treat our feet with loving attention. 128 00:10:00.280 --> 00:10:07.380 How interesting, how marvelous, that the coordinating powers of the free market grant us comfortable 129 00:10:07.380 --> 00:10:13.540 healthy pain-reducing shoes in the very time when we are living longer and longer, and thereby 130 00:10:13.540 --> 00:10:19.940 requiring even more sophisticated ways of forestalling or otherwise dealing with bodily decay. 131 00:10:21.460 --> 00:10:26.420 It is conventional to credit medicines and hospitals for long lives, but we should also 132 00:10:26.420 --> 00:10:32.740 give due regard to such conventional consumer products as shoes that make life past the age 133 00:10:32.740 --> 00:10:50.620 The Great Irony of Living in the Age of Entrepreneurship is that we no longer have to put thought into 134 00:10:50.620 --> 00:10:55.660 life's necessities such as the production and acquisition of shoes. 135 00:10:55.660 --> 00:11:01.500 It has made a problem that has vexed all people in all times obsolete, and so much so that 136 00:11:01.500 --> 00:11:07.100 But to even write about the topic is considered frivolous and obsessive. 137 00:11:07.100 --> 00:11:13.280 There are even whole interest groups calling for shoes to be less plentiful and more expensive. 138 00:11:13.280 --> 00:11:18.860 In a world without markets such as these people seek, many things would be missed, but I'm 139 00:11:18.860 --> 00:11:22.300 Assessing that footwear would be at the top of the list.