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The Olive Bar, the State, and Rule Ambiguity

Mises Daily: Wednesday, May 03, 2006 by

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Bourbon for Breakfast: Living Outside the Statist Quo

There I stood with eight olive pits in my cheek, talking to the checkout lady at the grocery store as she waved my half-pound container of antipasto over the scanner light. All the while, I hoped she that she wouldn't notice or ask why I sounded like I had marbles in mouth.

Like many shoppers before and after, I had been standing at the olive bar "sampling" red, green, and black olives — first the ones without seeds, so that there would be no evidence of my deed, then the ones stuffed with cheese and garlic, and then finally the ones with seeds, because I couldn't resist the temptation.

Sure, there is no sign on the bar that says: "do not sample." Nor is there a sign that says: "free samples." It is all kind of vague. The beautiful olives are display in the open, under a small canopy, in this self-service bar that only invites the customer to fill up plastic containers with food and pay based on weight.

Was I stealing? Was everyone? In a sense, yes: the food I ate, I did not pay for. So feeling a sense of guilt, I filled up a tub of olives and bought them — my tribute paid to expiate my grocery-store sin.

I would never do this in the produce section. People don't usually sample the lettuce, carrots, or even apples. Please! That would be tacky and wrong. But an olive bar's status is oddly ambiguous: everything looks immediately edible, almost like the store managers are inviting you to sample.

Maybe they are; maybe they are not.

It later occurred to me that the ambiguity might by the whole point. People eat and then feel a sense of obligation, and then buy. Might this really be a marketing scheme?

Later, with a small team of researchers, I staked out the olive bar to see if this theory holds up.

We pretended to be regular shoppers. Over the course of an hour, we observed unscrupulous people walking by quickly, stuffing a few in their mouths without buying anything; other scrupulous people bought without sampling any. After an hour of watching, our team only saw one other customer who replicated my own behavior.

The next day, our team observed several people who bought olives but did not sample, one man who ate handfuls and walked away, and one person who sampled an olive and proceeded to fill up a container and purchased it.

So while we saw plenty of sampling, only two people in two days both sampled and bought.

Not ready to declare the theory a bust, it was time to interview people who watch this bar all the time: the baker and the wine salesman. The baker said people steal olives all the time, and he laughed about it. I asked why he doesn't put up a sign that forbids it, and he just laughed and shrugged.

The wine guy was more forthcoming. If people ask him, he freely suggests that they try some samples. People who do sample also usually buy. We asked if this was the point after all, and he answered with a general theory of his own.

Paraphrasing: A grocery store lives on the fence, neither claiming their food is their own nor inviting people to freely sample what they want. We create zones of uncertainty and let people wander within them freely, letting people take their own path. The hope is that they will imagine the store's food as their own, and then make that come true. The olive bar is a case in point: it not only lives on the fence; by being so beautifully displayed, it suggests a home environment, and has thus spawned antipasto parties all over town.

At this point, the baker became more open with his knowledge of olive-bar sociology. He revealed that the olive bar is one of the most consistently profitable sectors of the store. "It brings in $1,450 per week" he said excitedly.

Our team of researchers had the theory confirmed: the bar's profitability — which is a measure of how well it serves the public — is related to its shades of gray concerning the legitimacy of sampling from it. We also found that one customer cited an authority for olive sampling: a guy on the Food Network actually recommends that people do this!

Clearly, the rule ambiguity here is deliberate, but it serves a larger social goal of bringing us what we want. Yes, there are those who take advantage, and there is some slippage. But the appearance of generosity, combined with people's sense of fairness, ends up being quite profitable.

Contrast the shades of gray in the private sector with the same phenomenon in the public sector. There is a huge range of government-created rules that are notoriously unclear:

  • Insider trading rules (all profits are based on inside knowledge in some sense);
  • Antitrust laws (how big is too big?);
  • Money laundering (who is to say that a person intends to hide from the state or just exercise privacy);
  • Discrimination (business actors are left to guess what will be considered evil and what will be considered legitimate).

So it goes with a million regulations that live on the fence: regulations on accounting, environmental protection, tax shelters, and on and on. The law depends not on the letter of the law but on the whim of enforcers.

When dealing with the state, we need certain rules, not gray areas — the less discretion the better. But the state doesn't like certainty. There is an obvious advantage to vagueness for the government. It keeps everyone living in a state of fear. The arbitrariness of it all makes us nervous and constantly aware of who or what is in charge.

But to what end? It's not like the olive bar run by the grocery store, where rule ambiguity is concocted with the final goal of serving us. When the state creates legal ambiguity — and it does so with deliberation — it is for the purpose of allowing them to trap us, tax us, coerce us, keep us on edge and living in fear.

If you eat the state's olives, you might get away with it, but you might not, and if you do not, you will not like the result.

Freedom lovers often rally around the idea of the rule of law. But the private sector, where freedom thrives, doesn't always give us that. Sometimes the rule of conscience and guesswork is enough, provided it is administered by a private sector that wants to serve you rather than a state that wants to control you.

Let the private sector live on the fence. But the state should be required to live on one side or the other.