Queue is now a game. But not always.
In Poland, during the 1970s, you might have taken an hour or two off from work, rotating with a brother or sister, to stand in line. Everyone could have been waiting for a pair of shoes but if a shampoo were available, you bought it. There were even queue rules like mothers with small children got to go first. So people temporarily borrowed small children.
The creators of the game Queue want to remind us that while the game is “great fun, … Queue reconstructs a reality which, for the people who lived it, was no fun at all.” So players have a shopping list that is virtually impossible to locate. To win they need to outsmart meat shortages, surly salespeople, long lines and dishonest officials. They experience corruption, a black market, and frustration. And unintentionally, there really were shortages because Queue’s developers had not produced enough games.
I downloaded a free English version of the game that includes a fascinating description of the Polish Communist-era command economy. It even includes several pages of Polish political jokes about Communism:
- A symptom of memory loss: when you find yourself standing with empty shopping bags in front of a store and cannot tell whether you were going in or coming out.
- What is it: a many-legged creature that is at least 20 meters long and eats meat yet has to make do with potatoes? The queue in front of the meat store.
Or here is their quote from a Polish citizen who describes his trip to London:
- “…when I first went to London–on an official visit–I photographed sausages, ham, and meat displayed in store windows. Later, I would show these photos to friends, explaining that you really can go into a store and buy these things just like that. These were shocking revelations.”
Our bottom line? Through Queue, we can see the perverse incentives that a command economy creates. The game reminds us that when a small group of people tell all of us how to answer the 3 basic economic questions (below), we respond to counterproductive incentives. The result is multiple inefficiencies and wasteful transaction costs like queues.
3 economic questions that all economies answer:
- What goods and services should be produced?
- How should goods and services be produced?
- Who should receive the income?
Sources and Resources: I first read about Queue in this WSJ article. However, the English translation of the game says it all. Finally, to identify contemporary command economies, the Index of Economic Freedom is always a handy resource.
A Communist Queue
I suspect that the incentives in New York’s doctor quality plan will have unexpected consequences.
An incentive for results, bonuses will be given to NY hospitals that they share with their doctors. Described as a reward system and P4P, Pay for Performance, for quality care, really it’s a quota system. A hospital will get higher reimbursements if goals like patient satisfaction, moving quickly through the system and using certain medical protocols are met. The NY Times says there are 13 criteria ranging from doctor communication to speedy discharges.
Sadly, the plan reminded me of the former Soviet Union, when the economy was run by government committees. With output predetermined, quotas were the rule. If you had 1,000 apartments then maybe 4000 light bulbs were the manufacturer’s lighting quota. Pajamas? Size and quantity could be the quota.
The good news is that the quotas were met. The bad news is the unrewarded details.
If only the number of light bulbs mattered then then many did not work. As for the pajamas, the sizes might have been fine but they had neither buttons nor buttonholes. I actually had a friend who stayed in a college dormitory room where the lamps were so heavy that she could not lift one. The reason? The lamp manufacturer’s quota was expressed in weight.
You see. When people have to meet quotas to get pay or bonuses, other non-rewarded details get ignored. The result is unintended consequences.
Problems with quotas returns me to the market system. Not ideal, still profits seem create the most effective incentives. As Adam Smith explained, “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner but from their regard to their self-interest.”
Sources and Resources: Bill Keller’s insightful NY Times Op-Ed and this NY Times article were the sources for my NY hospital incentive plan.
You might find it interesting to ponder the implications of the sign in a Venezuelan shopping mall which I saw on Harvard’s N. Gregory Mankiw’s blog. Called Mercado Bicentenario, the store was a part of a chain that had recently been nationalized by the Venezuelan government. The sign said the following:
Description of the product: Diana oil
Fair Price: 4,73 Bfs
Capitalist Price: 7,00 Bfs.
% of Savings: 32%
The Economic Lesson
Please consider for a moment what you think when you hear that a t-shirt is $10. What if the price is $50? As market determined prices, $10 and $50 convey a message to sellers and buyers.
Market (or as stated in Venezuela, “capitalist”) prices provide crucial information. They tell us about value and efficiency and affordability. They let consumers and businesses and government decide what to do, what not to do, and what they can do better.
A government established price conveys no signals to sellers and buyers. The supply side can no longer determine a connection among price, profits, and using resources efficiently. On the demand side, consumers can neither assess quality nor indicate what they want and do not want.
The long lines, pajama tops without buttons, and grouchy salespeople that characterized the former Soviet Union are perfect examples of what happens in a centrally controlled economy.