Important Economic Debate Continues

Yesterday, the debate on milk bags vs milk jugs came up yet again.  A newspaper story about a regulatory fight between different factions within the milk industry led to a twitter conversation which led to a newspaper story.  And this led to an appearance on a radio program this morning.

It kind of comes off that I am a zealot:

Although Saideman has lived in Canada for more than a decade, he’s drawn a line in the sand over his national dairy identity.
“I have never bought milk in plastic bags and I never will.”

That much is true. I will not buy the special pitcher that holds a milk bag (the smaller one that is one of three in the big sack they sell in the stores).  The need for heaps of milk in my house are waning as Frosh Spew is weeks away from going off to college.  If the pilot program is expanded to allow more choice of milk conveyance, I will not be buying gallon jugs of milk either--we just are not drinking enough.

The reality is this is both an identity thing and a principle thing.  The identity thing is that I see a bag of milk and it reminds me that I am an alien to this province, just as it did in Quebec (other provinces in Canada don't have bags of milk).  It is a principle thing in that we have restricted choice thanks to the milk industry forming a cartel that lobbies for policies that lead to higher prices (blocks of cheese are most visibly over-priced) and less choice. 

The logic as always is that small concentrated groups tend to have more political power than large diffuse ones because the smaller can organize and the larger are likely to focus on other issues.  In the US, this means a set of very counter-productive prices that limit competition in the sugar industry.   While it raises the price of our cheesy poofs and frosted flakes by a smidge with each bag/box, it deprives poor Caribbean countries of a key market, producing foreign policy problems as well as protecting an awful industry in Florida.