Monday, June 12, 2017

Black Market Ramen

Black Market Ramen

My daughter Hannah has told me a fascinating tale about high-school economics. I have asked her to write me more details. Here is the gist of it:
The Jewish Community High School of the Bay has three lunch economies. A student there can get lunch from the official source, from the black market and from gifting.
The official source is the school, which enforces a food monopoly on site, and which not only keeps kosher, but specifically diary-kosher. No mixing meat with milk; so no meat-based foods. So chicken ramen noodle soup is not available to JCHS students.
Unless they buy it on the black market! For as you might expect, two enterprising young men in Hannah’s class saw opportunity there, and decided to meet the demand. So yes, my daughter gleefully informed me, there are black-market noodles in JCHS! These are cheap noodle cups, just add hot water; the lads buy them for 39 cents each and sell them for a dollar each. Cheaper than Walmart’s $1.30. Sweet!
Hannah knows about this, so do the other students, who keep the business humming along. But the administration evidently does not, for otherwise they’d shut it down, ostensibly to keep kosher but really to protect monopoly. And they need to protect their monopoly; according to Hannah, half the time their lunches aren’t very good.
          The lads had a whole locker full of contraband noodle cups; foolishly, they also kept their cash there. Well, what do you know; someone broke into the locker, left the noodles, and took the cash. Hannah excitedly relayed this story to me too.
          I was amused by black-market ramen, but not by theft. I asked if the school knows about this. Hannah says that the boys reported the locker break-in, but they moved the noodles, and the cash, to two other places. A small business must adapt. As for Hannah, she’ll watch but she won’t interfere.
          I told Hannah to keep an eye on this, and report to me, preferably in writing. She pointed out that she can’t submit this writing project to the school, so she has no present use for it. I said that I am her audience this time. She admitted the point. Maybe she’ll tell me more, in writing; for now I write down my memory of her verbal reports.
          I told her that this story is worth watching because it’s educational. It’s a microcosm of larger social forces. For instance there is the rationalization of privilege (i.e. kosher enforcement is really monopoly enforcement), the inevitability of black markets (or as I put it, “the invisible hand is quicker than the all-seeing eye”), and the black market’s difficulties in securing property rights. Also, the dangerous volatility of money.
          She told me there’s a third lunch economy at JCHS. It is as underground as the black market; for it too smuggles in food; not to buy or sell, but to hoard, consume and gift. It’s junk food of course; potato chips, candy and warm soda; no doubt forbidden by officious administration, ostensibly for food-health reasons but really for monopoly protection. It’s not black-market either; money is not involved. It’s aplutic!
          I asked Hannah if the smuggled food is bartered. She says yes, for other smuggled food.
          The school provides hot water in pitchers and by free microwaves; this hot water is key to two lunch economies. The school sells tea in bags, which needs hot water; and the contraband noodles also need hot water. Free-riding on a public good!
          Speaking of hot water, sooner or later those two boys will get into it. Or maybe they’ll get away with it. And even if they don’t, expect other dealers to show up. I await further reports from Hannah.

          UPDATE: the two boys have renewed their stock, expanded their business, and brought a third partner on board.

          UPDATE, May 2016: One of the boys moved to another school. Lately business has been off, so the other boys have suspended operations, though perhaps restart it during finals week. Also the school has been experimenting with its official lunches.

          UPDATE, Fall 2016: Ramen are now out of the black market.

          UPDATE, Summer 2017: Hannah has graduated from JCHS, as have the boys involved, so they got clean away with it.

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