Supply, Demand and English Food. (1) The Krugman Thesis

In July 1998, the Nobel prizewinner and New York Times columnist Paul Krugman had a blog that featured English food. Then in December of last year, Tyler Cowen of George Mason university, whose economic ideas are usually quite at odds with Krugman’s, gave Krugman’s discussion of English food his endorsement on his very influential blog, Marginal Revolution.

Now that’s a pretty big deal.  English food does not usually draw the attention of world-famous economists.  But in this instance, both of them use English food history as evidence for the Krugman thesis of a bad free-market equilibrium.  So what’s that, you may ask.

Krugman explains.  “A freemarket economy can get trapped for an extended period in a bad equilibrium in which  good things are not demanded because they have never been supplied, and are not supplied because they have never been demanded.”  In other words, if people don’t know what quality goods and services are, they won’t ask for them; if they don’t ask for them, the market won’t supply them.

OK, you can suspect what is coming.  English food used to be “deservedly famous for its awfulness.”  And why?  “The country’s early industrialization and urbanization was the culprit.”  To fill in, early industrialization and urbanization meant the delivery of awful food.  Once this pattern was established (by when?), it continued. Hence because “your typical Englishman, circa, say 1975, had never had a really good meal, he didn’t demand one.”

In short, the persistence of bad food in England is evidence for the thesis of a bad free-market equilibrium.

So here’s what I want to do.  I am going to take for granted that English food was awful from early industrialization and urbanization (say the 1780s) until the 1980s when Krugman grants that it improved.  Krugman does not define awful, taking it as a self-evident description of English food.  And I am going to let that stand, since so many people, Americans in particular, are of one mind with Krugman.

So please, no comments saying that really English food is terrific. In these circumstances, defending English food is a bit like fending off the question “When did you last beat your wife.”

My task is to see whether, even granting that English food is awful, that fact supports the Krugman bad equilibrium thesis. I plan two or three blogs over the next week or so.  They will deal consecutively with early industrialization, early urbanization, and the underlying assumptions about the units of food history.

I think they throw doubt on the use of awful English food as evidence for the bad equilibrium thesis.  That of course still means the thesis itself may be true. That’s for economists to decide. Perhaps, though, it needs better evidence.

And if you are still with me after all that, I will go on to what I think may be the kernel of truth in the awful English food story.

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