Self-checkout - Why markets work Part MMCXV

Blog: Blog - Adam Smith Institute

Open Access

Abstract

That there seems to be an awful lot of dithering in markets can be seen - is seen by some - as an example of their faults. Why not replace that havering with the thwack of firm planning. One decision taken once and all that waste gets removed from the system.The comeback to that is, well, yeees, but which decision?Morrisons "went a bit too far" with self-checkouts, its chief executive has admitted, as the supermarket chain cuts back on the technology across a tranche of its stores.Rami Baitiéh, chief executive of Morrisons, said that it is "reviewing the balance between self-checkouts and manned tills" and removing some from stores after installing too many.He said: "Morrisons went a bit too far with the self-checkout. This had the advantage of driving some productivity. However, some shoppers dislike it, mainly when they have a full trolley."So we've this new technology. Computing has reached the stage that we can, with greater or lesser success, remove paid labour from the checkout process and replace it with customer - and unpaid - labour at the self-checkout. Well, could be a good idea, might not be. As with most technological advances we're likely to find out that some is good, more could be better or worse and all and only worse. So, how do we find out that optimal position? Folk have to try it. Different folk have to try different amounts of it too. So that we can see the real life and real time reaction of consumers. No, planning doesn't work. For of course every single one of these varied companies has done all that planning. They've surveyed and asked and prodded and thought and come up with what research and planning says is the optimal solution. Absolutely every single one of those plans has been wrong - no business plan ever does survive first contact with the market.The one single central plan would not have had that experimentation, that trial by error and we never would haver and mither to the optimal solution. Which is, of course, that reason for using markets. Haver, mither and dither are not inefficiencies of markets they're the point. Because only by fiddling about a bit do we actually find out what those difficult things, human beings, actually find the best solution. We also can't stop doing this because technology changes, perhaps only by some insubstantial in any one day, all the time. Therefore we are continually trying to find the correct mix and thus must continually fiddle about. Sure Morrisons is ripping out some self-checkout lines. That's the whole damn point of using markets, to find out that they should.Tim Worstall