Earning Our Trust

Yesterday when I turned the key to start my Subaru I trusted that the car would start. When I cook a pot of Lundberg organic brown rice I have trust that the taste and quality will be the same as the many pots of Lundberg rice I have made before. When I turn on a lamp that has been inspected by Underwriters Laboratory I trust that I will not be electrocuted. My trust is based on many past encounters and the fact that corporations have an interest in maintaining the reputations of their brand names.

When I read that an expert from the medical monopoly urged that all Americans over the age of six months get seasonal flu shots I have no trust that I am getting reliable information on which to base my decision. When the Japanese government and the Tepco electric monopoly tell the world that they have the Fukushima situation under control I don’t trust their assurances.  If I have to call a government agency I have no trust that my call will be handled expeditiously or professionally.  My lack of trust is based on many past encounters and the understanding that organizations that do not have to compete in the marketplace have no incentives to serve the best interests of the consuming public.

Driving from Maryland to New Hampshire this past Saturday we encountered an almost two-hour delay on the New Jersey Turnpike. The delay was puzzling because it was Saturday afternoon; there were no accidents; no lanes were blocked due to construction. The road was simply not able to handle the flow of traffic.

As we drove on, my ego imagined this conversation at the toll plaza where a toll of $13.85 was due. “May I speak to your supervisor?” I imagined myself saying to the toll collector.  I continued in my head, “There was a very long delay on the Turnpike today; traffic snaked along at about 5 miles an hour.  Since you didn’t deliver a reasonable service, I believe the toll should not be collected.”

Had I engaged the conversation I imagined, I would have argued that because there are alternate routes, New Jersey Turnpike authorities had an obligation to warn motorists about delays via already installed electronic signs before the point of choosing their route.

Had I engaged the conversation I imagined, the result would likely have been a further delay in our travels or perhaps worse.  With a monopoly comes the power to use coercion and force.

New Jersey Turnpike authorities do not make decisions in the same way as business people who must compete for customers. Turnpike authorities do not have to earn the trust of consumers in order to earn revenues.

If FedEx or UPS fails to deliver on a promised shipping time, they cheerfully refund your shipping charges. If L.L. Bean or Lands’ End sells a piece of clothing that is flawed, they cheerfully refund your purchase price or replace the item.

Business people are eager to earn your trust. Recently we purchased an elliptical that has needed multiple service calls. We were surprised that the the owner of the local Sears franchise contacted Sears on our behalf so that he could offer financial compensation for our troubles. His behavior was not prompted by our complaints; his behavior was prompted by his desire to earn our trust and retain our customer loyalty.

I’m not amazed when individuals who have a vested interest in expanding government chose to support more government. So I’m not shocked that most academics support more government spending on higher education or that building trade unionists applaud when government expands construction programs.

I am amazed when individuals who have no vested interest in supporting government monopolies embrace top-down, centrally-planned solutions that are based on coercion and undermine consumer choice. I’m amazed because it is almost as though they ignore the everyday evidence that government supported monopolies lead to poor results.

An old story tells of a man searching for his house key under a street lamp. A neighbor comes out to assist him. After searching without results, the neighbor inquires, “Are you sure you dropped the key here?” The searching man responds, “Actually, I’m not sure; but I’m looking here because this is where the light is brightest.”

Despite evidence accumulated over a lifetime, too often we look away from the source of our well-being and instead look in the direction of political noise. We mistake that noise for the source of well-being.  It is as though hypnotized by the siren call of politicians, we fail to see how our lives are made better by beautiful actions taken every day by ordinary Americans working for countless firms who want to earn our trust.

4 Responses to Earning Our Trust

  1. Tom Kelley says:

    I thought you were going in a different direction with the Turnpike example. It’s not that the Turnpike provides poor service. It’s that they under price their product. People love the Turnpike. Look at all the customers they have. They could improve service by kicking all the cheapskates out by raising the tolls. A pure example of supply and demand. Even though demand may be extremely inelastic because most people have given up on maps.

    By the way where did you see that the Turnpike promised a minimum miles per hour. I only see a maximum.

    How about examining the following claim made by a company in a competitive market: “Wonder Bread builds strong bodies in 12-ways”. Should we trust this claim because Wonder bread is chasing profits?

    • Barry Brownstein says:

      Tom,

      I appreciate your points.

      Saying the Turnpike is under-priced because it is crowded is like saying automobile registration fees are too low because the MVA is crowded. Neither the MVA or the Turnpike has an economic incentive to set rational policies.

      As for Wonder Bread, they were part of subsidized agribusiness and they too have not earned our trust.

      • Tom Kelley says:

        So, by your analogy, are yous saying the toll takers inefficiency were creating the congestion?

        If not higher tolls, how would an unfettered market respond to a congested highway? Build more roads? If so where?

        I just don’t get your point about a loss of trust with the New Jersey Turnpike Authority. Was the road unsafe? They promise a paved road that so many miles long, so many lanes wide, that is safe for a price. I don’t think they promised you a certain transit time. There are other routes that lead between Baltimore and New Hampshire that have much less congestion.

        The entity that you should lose trust in is the other drivers (road consumers). They failed to adjust to market conditions. The NJ Turnpike has been a parking lot on every three day weekend for the past 30 years. So it shouldn’t have been a surprise. Theory would predict that consumers would adjust and change their travel route or schedule. I think that drivers, including yourself, were comfortable with the costs (tolls and time).

  2. Barry Brownstein says:

    Tom,

    When you come off the Deleware Memorial Bridge there are electronic signs. The signs could have warned motorists to consider taking I-295. The Turnpike didn’t warn motorists because either it never occured to them or they were more concerned about revenue.

    Asking how a unfettered market would respond is like standing in line for food in Moscow in the 1970s and asking how the market would respond. The answer is that the there is a discovery process that can’t be predicted.

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