On the Inefficiency of Small Money

On the Inefficiency of Small Money

 

          Consider yard sales vs. Goodwill. I have learned that a yard sale is an extremely inefficient way to get rid of your stuff, as compared to donating to Goodwill, if you value your time at more than zero cents per hour.

For a yard sale you must print flyers, post them all over the neighborhood, set up tables and chairs, then sit there for hours and wait. If anyone shows up, they’ll pay pennies on the dollar if they buy at all, and they’ll never take everything.

Whereas with Goodwill or Salvation Army you need only load up your car, drive to the place, unload everything there, sign a form, and claim it all as a charitable deduction on your taxes. Simple, easy, efficient, profitable. More frictionless than Craig’s List! That’s right, tax-subsidized altruism makes better economic sense than the freest of free markets.

When the money amounts involved are small, money is inefficient. When the money amounts are large, money is corrupt. It’s only in the middle range that money is both efficient and honest.