Tuesday, March 02, 2010

Argentina candy invasion

As my loyal readers know, I am an infrastructure junkie. But I also take some pleasure in noting the country of origin of products I see in grocery stores, but especially in public places like restaurants and hotels. For example, how does New Zealand butter make it to the tables of fancy restaurants in London, when the UK has a powerful dairy sector?

Several months ago, I expressed wonder at the fact that a hotel in Boston could find it commercially reasonable to import bottles of water from the other side of the globe to serve to people attending conferences. As a trained economist, I marveled at this application of the theory of comparative advantage.

Yesterday, another example emerged at another hotel. Sitting in front of me on a conference table were these sucking candies. Look closely and you will see that they are from Córdoba, Argentina, a distance of over 5000 miles. How can this be financially sensible with a surfeit of hard candy manufacturers in the United States?

Now, I know that the peso has been falling in value relative to the dollar, making exports to the US more attractive. But this is a broader story than commerce with the US. From this article, we see that this company exports its candy to 110 countries. From humble origins -- an Italian immigrant in 1924 engaging his children in making caramel at the family bakery -- the company has become a world presence.

The capitalist system has its inequities and demands regulation in many respects, but the "invisible hand" of Adam Smith is truly a wonder to behold. These kind of examples explain why it is impossible for economies with centralized control to replicate the scope, scale, and diversity of the product and service offerings that emerge from free economic systems.


Sally Sampson said...

More importantly than the issue of where the candies were from, why, when there is an obesity epidemic, are you, the CEO of a large Boston hospital, being served candy at a conference?

76 Degrees in San Diego said...


Anonymous said...


It was not a medical conference.

Once upon a time, cigarettes were offered at conferences and dinner parties, remember?

amartin4 said...

A very astute observation. Brings to mind two texts I've recently read: The Constitution of Liberty, and the Fatal Conceit, both by Hayek. Anyone looking to explore this theme a bit more would benefit greatly from reading chapter 2 of the Constitution of Liberty, titled "The Creative Powers of a Free Civilization".

Colin said...

My latest example: Trader Joe's taco seasoning is from South Africa.

Anonymous said...

Ah yes, South Africa is well known for its tacos! :)