Here’s another “aha” moment to remind us why we may want to be giving thanks this Thanksgiving to economic liberalism as well as the grocery store. Mark Perry of the Carpe Diem blog notes that in real dollars the cost of a Thanksgiving turkey in 2016 is 1.7 percent less than last year, and 20 percent less than in 1986. And the “time cost” used to prepare the traditional meal is also more affordable.
According to the American Farm Bureau Federation, a 16-pound turkey costs an average of $22.74 this year. That’s about $1.42 per pound, or 2 cents less per pound than in 2015.
Pumpkin and milk prices also fell this year due to improvements in production. Looking at a traditional basket of 12 food items served on Thanksgiving, the AFBF notes that for 10 people to eat to their heart’s content and have leftovers, the cost of a Thanksgiving dinner this year is $49.87. That may be only a few dimes lower than last year, but at the same time, overall consumer prices and hourly earnings both rose in the past year.
Perry notes the savings not only in dollars but in time.
Measured in time worked at the average hourly wage for all private production workers of $21.72 in October 2016, the “time cost” of this year’s classic turkey dinner is only 2.29 hours, down by 3 percent from 2.37 hours last year and at the lowest level since 2010. Compared to 1986 when the average American would have worked 3.21 hours to earn the income necessary to purchase the turkey dinner for 10, the “time cost” for a worker today (2.29 hours) is nearly 29 percent lower.
In a separate piece on how lucky we may want to consider ourselves, Perry notes that the average time spent is not only a matter of hours worked but convenience. He notes that you don’t have to call ahead to the grocery store or go down to the farm to order your bird. Everything you need is waiting for you at the supermarket in the size and quantity you need it. In fact, a Thanksgiving meal can be ordered and delivered in some cities through Amazon Prime.
The reason your Thanksgiving turkey was waiting for you without an advance order? Because of the economic concepts of “spontaneous order,” “self-interest,” and the “invisible hand” of the free market. Turkeys appeared in your local grocery stores primarily because of the “self-interest” (maybe even greed in some cases) of thousands of turkey farmers, truck drivers, and supermarket owners and employees who are complete strangers to you and your family. But all of those strangers throughout the turkey supply chain co-operated on your behalf and were led by the “invisible hand” to make sure your family had a turkey on the table to celebrate Thanksgiving this year. The “invisible hand” that was responsible for your holiday turkey is just one of millions of everyday examples of the “miracle of the marketplace” where “individual selfish decisions must lead to a collectively efficient outcome,” as economist Steven E. Landsburg observed.
Perry quotes a 2003 Boston Globe column by Jeff Jacoby that cites how the beauty of what Adam Smith termed “the invisible hand” is the ability of the free market to work in a coordinated, yet spontaneous manner. In other words, innumerable people, each working for his own gain, … promote ends that benefit many. Out of the seeming chaos of millions of uncoordinated private transactions emerges the spontaneous order of the market. Free human beings freely interact, and the result is an array of goods and services more immense than the human mind can comprehend. No dictator, no bureaucracy, no supercomputer plans it in advance. Indeed, the more an economy is planned, the more it is plagued by shortages, dislocation, and failure.”
Certainly, the economics question leads some to note the massive influence government has played in the agricultural sector (not to mention other markets). Between subsidies, rural zoning, food inspections, and other rules and regulations, who knows what the actual price of a turkey would cost without all the interference? This is not to say all the impacts of intervention are good or are bad, but that the true price could even be less.
But at the very least, Americans can eat well and cheaply despite all the market variables. In the meantime, getting to the meaning of gratitude, consider that a small donation to feed people in less fortunate circumstances goes a much longer way than it used to do.
Kinda makes you want to pay if forward and give thanks for all that you have.
Happy Thanksgiving.
