Grocery stores are true marvels of markets. Roast chickens don’t fly into your mouth, but they are roasting on a rotating spit in the deli section. Typical grocery stores carry thousands of items that make the land of Cockaigne look meagre.
Pieter Brueghel the Elder, Public Domain, Via Wikimedia Commons
The centuries old myth and poem about Cockaigne depicts a mythical place that far exceeds the sweet joys of paradise. Sure paradise has grass and flowers and plenty of fruit, but the land of Cockaigne “offers better fare”. The food in Cockaigne is “good” and abundant, enough for lunch, supper, and tea. Abundance is an understatement: Cockaigne has rivers “great and fine” of oil, milk, honey, and wine. Water is there too, but thirst isn’t a common experience so people mostly use it for washing and to enjoy the view.
People in Cockaigne have pies and pasties—they are in the walls—full of “rich fillings, fish and meat”. Cloisters, chambers, churches, and halls have shingles made of flour-cakes, and nails of “rich and fat” puddings. When geese are roasted, they fly away and cry, “Geese, all hot, all hot!” Of course, the geese—cooked with copious amounts of garlic—land in your mouth perfectly cooked.
Cockaigne has plenty of other benefits like gold-plated roads, jewels, fanciful birds, so grocery stores cannot compare to that. The land of Cockaigne is made up, of course, so people don’t face scarcity. They have all they want—at least the standard items like “geese”, “honey”, “garlic”, and “wine”. Their desire for wine, for example, is easily met by the wine river next to the honey river and the pie-walled churches.
People in the real world, however, face scarcity, which has important implications for how we should think about grocery stores. Our desires often outpace our abilities to satisfy those desires. As such we face consequences when we make choices; economists call these opportunity costs. If a grocer can sell a chicken for $5, you and me and a hungry family alike will have to pay at least that amount to cover the grocer’s opportunity cost and acquire the same chicken. Goods at grocery stores are “pricey” in that obtaining them requires a price, but comparing that system to fanciful utopias and negatively judging grocery stores commits a nirvana fallacy. Price-based allocation systems are better than most relevant alternatives, e.g., coercion.
In this world, we are stuck with prices at grocery stores, and that’s a good thing as we obtain immense benefits that outweigh the costs.
Grocery store prices are incentives for farmers, producers, distributors, and grocers to mimic the conditions of Cockaigne. They are also incentives for consumers to adjust their consumption. Higher (lower) prices encourage producers to provide more (less) and consumers to buy less (more). Like in many other markets, these combined incentives ensure grocery stores are typically stocked with a variety of items, especially when those stores operate in market settings where property rights are generally protected. Prices and the price-allocation system are marvelsso says Hayek, as they almost seamlessly coordinate the myriad and conflicting goals of consumers and producers.
Markets and price signals encourage entrepreneurship and innovation too, which hits you over the head as you walk into the grocery store. Grocer-entrepreneurs want to earn net revenue, and such efforts lower prices and encourage innovation. Every characteristic of grocery stores is some entrepreneur’s attempt to do this: the way apples and oranges are placed for customers to sort through (which helps to lower transaction costs), the enticing layout of fresh meats, the prepared meals, the assortment of jellies, the selection of refrigerators and freezers, the bakery operations, floral arrangements, catering services, and so on. There are discounts, international isles, and snack isles too. Many grocery stores work with banks, optometrists, and cleaning services to provide additional services. Grocers also bundle several services into single items for the convenience of customers; a fresh steak includes deliberate choices made about the quality of meat, its age, weight, and cut that all benefit consumers (HT: Vincent Geloso).
Grocery stores don’t have wine rivers, but there are shelves and racks of wine providing myriad options. We might also observe that cooked, seasoned, and warm chickens are cheaper than raw birds—a feat that might have baffled our utopian forebears. It doesn’t matter if this is because there are economies of scale or grocers are using the cooked birds to encourage additional sales. These food items—with different seasonings and there are Kosher-certified ones too—are available for everyone to purchase every day, and they make Utopian visions look paltry.
There are so many available benefits—that likely outpace those in the land of Cockaigne—perhaps we shouldn’t take them for granted.
You might still be concerned about nominal food prices. The figure below on global (on the left axis) and U.S. (on the right axis) annual food price indices shows how a bundle of food prices have changed in terms of percent change from one year ago. Bundles include standard, commonly available and consumed foods like breakfast cereal, milk, coffee, chicken, wine, and so on. With the exception of 2021 to 2023, food price changes in the U.S. ranged from 0 to about 5% since 1990 (and the same pattern is true until the early 1980s). Global food prices, however, rise and fall with a higher variance. For four decades, U.S. food prices have remained remarkably stable compared to global food prices (note the magnitude of the axes too).
Recent food price increases don’t mean people aren’t reeling, but note the following. Price indices try to track the prices of the same goods over time. Despite substitution adjustments for changes in quality, such improvements, bundling, and innovation remain difficult to recognize. 16 oz. ribeyes might have higher nominal prices, but they are most likely better quality pieces of meat; they are probably fresher or leaner or have more marbling. And, again, there are many more options and alternatives. Nominal prices often ignore these qualitative improvements in wellbeing.
While similar to grocery stores of recent decades, grocery stores today are highly concentrated bundles of innovation. There are still discount grocery stores that cater to people with lower incomes, which further softens the blow of higher prices. And grocery stores that cater to higher-income groups and different ethnicities too. Higher prices alone, thus, are not cause for alarm, let alone calls for utopian reconstruction.
Grocery stores sell every single one of the goods mentioned in the land of Cockaigne, except for the fanciful things like the crying geese and most don’t sell jewelry (although Walmart, Target, and other larger box-stores do!). Yet, grocery stores make up for these supposed deficits and potentially higher nominal prices with a dizzying array and variety of food, items, and other innovations utopias cannot fathom. They provide such services because of voluntary market settings that align the incentives myriad farmers, producers, shippers, and grocers face.
We don’t live in the land of Cockaigne, but we do have grocery stores, and that’s a much better deal.
Byron “Trey” Carson is an Associate Professor of Economics and Business at Hampden-Sydney College in Virginia, where he teaches courses on introductory economics, money and banking, health economics, and urban economics.
