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Thursday, November 10, 2005

Instant umbrellas and the miracle of free trade 

There I was, walking out of the "W" Hotel on Lexington Avenue last night in the teeth of rush hour, staring at the rain, contemplating how I was going to get across town to Penn Station without getting soaked to the skin. Demand for taxis outstripped supply by a huge ratio, and I have not sufficiently untangled the mysteries of cross-town subway routes to consider that option seriously (in the matter of New York subway riding, I ride strictly north-south).

Fortunately, there was an Asian guy right in front of me selling umbrellas for $3 each. That's a great thing about New York. It starts to rain, and all of a sudden a zillion guys appear seemingly from the ether to sell umbrellas for less than a latte. And they are all made in China.

How is it that we can manufacture an umbrella on the other side of the world, sell it to a distributor, ship it across the Pacific, distribute it throughout the United States, sell it for $3 on the streets of Manhattan precisely when there will be demand for it, and still leave profit for all involved?

It's a wonderful world.

13 Comments:

By Blogger Rob, at Thu Nov 10, 09:45:00 AM:

We can't...

The guy stole the umbrellas from a vendor on 6th Avenue.  

By Blogger Veeshir, at Thu Nov 10, 10:00:00 AM:

How is it that we can manufacture an umbrella on the other side of the world, sell it to a distributor, ship it across the Pacific, distribute it throughout the United States, sell it for $3 on the streets of Manhattan precisely when there will be demand for it, and still leave profit for all involved?

Slave labor.  

By Blogger Catchy Pseudonym, at Thu Nov 10, 10:02:00 AM:

lol... I think Rob nailed it.  

By Blogger TigerHawk, at Thu Nov 10, 11:26:00 AM:

Nope. In the walk from Lex to Penn Station I passed at least twenty guys selling umbrellas, and the prices ranged from $3 to 2/$5. And it is always that way. If theft is involved, the umbrella distributor is pretty damned stupid.  

By Anonymous Anonymous, at Thu Nov 10, 12:02:00 PM:

I think the real answer is 'No Unions'.  

By Blogger Cardinalpark, at Thu Nov 10, 12:53:00 PM:

If you walk into Duane Reade (a drug store), the same umbrella costs $9. I suspect that the truckload bound for Duane Reade, which probably costs them $3.00-4.50 all in, has a lot of boxes fall off the back. Those out the back are street retailed at around cost. Duane Reade gets a little hosed. Some of their margin winds up on the street and in customers market. Retail's a tough business. The guy on the street didn't pay transportation or rent...  

By Blogger Gordon Smith, at Thu Nov 10, 01:47:00 PM:

I think all y'all are right. The umbrella was manufactured by cheap/slave labor, sans unions, then stolen off the truck and sold to you, Mr. Consumer!

You're dry as a bone. But there's a moral weight to it all that goes unaddressed through our consumer joy at your good fortune.  

By Blogger Catchy Pseudonym, at Thu Nov 10, 01:56:00 PM:

I personally have skipped the cost of the umbrella and now just hold a small asian person over my head when it rains. It averages out to about $5.00 a year. Is that wrong?  

By Blogger TigerHawk, at Thu Nov 10, 02:09:00 PM:

I am ashamed to admit that I laughed out loud at that last crack, Catchy.  

By Blogger Counter Trey, at Thu Nov 10, 02:09:00 PM:

TH had it right in the original post. Put human ingenuity to work in a free economy and it will find a way to get it done.

There are many examples, but the one I like to use to explain economics to my liberal friends who think capitalism is bad for the environment has to do with forest products. Fifty years ago it would take a lot of trees and some expense to make kitchen tables. Now, it takes a lot of sawdust, scrap and glue, and they can be made cheaper, faster, and better (less warping) than before. Little of the tree is wasted. Why not? Not because table makers care about the environment (although they might), but because their competitor will find a way to make that table less expensively and with less waste if they do not.

I suspect there are a lot of Chinese in China working on ways to stretch nylon over larger areas today, so that your umbrella will be even cheaper tomorrow.  

By Blogger Roy Lofquist, at Thu Nov 10, 02:30:00 PM:

Amazing! That's he same price I used to pay when I worked in Manhattan 15 years ago.  

By Blogger Cardinalpark, at Thu Nov 10, 03:53:00 PM:

Catchy - I'm with TH. I spit the soda outta my nose when I read that one...


Comment of the day...  

By Blogger Gordon Smith, at Thu Nov 10, 09:05:00 PM:

lol @ catchy  

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