Mises Daily Articles
That Taco Bell Boycott
The Jesuit Volunteer Corps (JVC) has joined up with the Coalition of Immokalee Workers (CIW) to launch a nationwide boycott of Yum Brands Inc. Yum Brands is the owner of many successful fast food chains including; Kentucky Fried Chicken, Pizza Hut, A&W Root Beer, and Taco Bell. Taco
Most of the migrant laborers are not legal citizens and do not fall within the confines of minimum wage requirements and typical employment regulations. They receive per bushel wages rather than hourly or salaried compensation. For each bushel picked a migrant worker receives an average of 45 - 50 cents.
These wage rates have outraged the likes of human rights activists and anti corporate individuals alike. The boycott on Taco Bell was announced in 2001 for "its refusal to meet with farmworkers and discuss its role, as a major buyer of Florida tomatoes, in perpetuating farmworker poverty."
This boycott is not focused around lobbying efforts to seek government mandated wages. It is a group of activist individuals voicing their opposition to allegedly morally unacceptable practices of a company. At first glance the typical anti-statist may be prone to wish the JVC and CIW groups good luck with their cause and call it a day.
This effort has more implications than just the noncoercive actions of free individuals. It is an attack on capitalism and an attempt to impose moral connotations to simple purchasing actions of consumption goods. The question arises, how should today’s libertarian or free market supporter side on this issue? Should he support or condemn these boycott efforts? The answer falls in the latter. An understanding of basic economic principles exposes these efforts as rabble rousing anti-capitalism at its worst.
The link between CIW and the JVC has served most effectively for CIW in attracting young college students to their cause, coincidently the same market demographic focused on by Taco Bell marketers. So far Notre Dame, UT Austin, UCLA, and
At first glance CIW is right; staging a boycott against Taco Bell will certainly diminish the demand for their products and could seriously hurt Taco Bell’s profits. Why does CIW want to decrease the demands and profits of Taco Bell? How is this helpful for the Immokalee migrant workers? CIW expects the boycott to put pressure on Taco Bell to pay more for its tomatoes and thus more for migrant laborers. But this would not be a sustainable market scenario. Prices are not set by arbitrary moral standards, but rather by available levels of supply and demand in the market.
Free market advocates attribute the drive of technological advancement, the intensity of market prices, and the availability of goods and services to the power of consumer demand. It is this demand that influences the prices of finalized goods and services on store shelves and the prices of their factor inputs earlier in the production process. The market price of migrant labor results from the market price of tomatoes which further stems from the market price of finished tacos.
When directed in the appropriate direction, consumer demand can make or break a single firm or an entire industry. This is why companies spend millions of dollars on marketing and advertising campaigns. While anti-corporate activists such as CIW point out high marketing expenses as injustice, a more enlightened analysis calls for CIW to thank the marketing efforts of Taco Bell as they wouldn’t have their jobs without it. Activists from the Jesuit Volunteer Corps speaking at Loyola University New Orleansdrew attention to the imbalance of Taco Bells 50 million dollar marketing expense but their reluctance to pay higher wages.
The value of a chalupa is not imputed through the sweat equity of the Immokalee migrant workers. When the typical college kid is watching his favorite episode of The Simpson’s and a Taco Bell commercial comes on, he does not pause and reflect on the condition of the plighted migrant laborer; rather he sees a funny Chihuahua that speaks Spanish, standing next to a greasy bundle of cheesy goodness, and his stomach growls accordingly.
Sure the tomatoes in Taco Bell may be delicious but it is not their quality that drives Taco Bell’s profits but rather that silly
Staging a boycott against Taco Bell does not change the guided self interest of taco eating teenagers. In the short run it has the exact opposite effect of its intended purpose. Boycotting Taco Bell lowers the demand for tacos, which in turn lowers the demand for the inputs required to make them, which in turn lowers the prices for wages paid to migrant workers needed to pick tomatoes.
A more effective method of raising the wages of Immokalee migrant workers would be to stage the exact opposite activist campaign. If college students were to buy more tacos and ask for extra tomatoes on those tacos the demand curve would be moved in the appropriate direction, raising migrant workers wages. But this realization seems farsighted from the anti-capitalists.
The Jesuit Volunteer Corps seems to be burning the migrant workers match at both ends. We’ve seen how the boycott would have a lessening effect on the migrant workers’ wage rates, what we have yet to mention is that the JVC regularly encourages college students to gain the cultural experience of being a migrant worker. While lowering the demand for their goods and services, JVC kids travel to south
Boycotts are an integral part of the free market economy. They provide for the expression of consumer preferences over the products and services that get produced. A boycott is an attempt to rid the market of the inferiority represented by a particular firm. Every individual has the right to buy that which he values and avoid buying that which he does not. It is this relationship that maintains the satisfaction of felt uneasiness and creates wealth in a capitalist economy. Frederic Bastiat (1848) spoke about what is seen and what is unseen. Without this understanding a boycott could be more destructive than productive.
In the Taco Bell example, the proposed purpose of the boycott is to raise the wages of workers used to produce the inputs of its products. This action will achieve the opposite effects as guided by the two forces of lessened demand and an increased labor supply. The only way the boycott could continue and achieve its intended results would be the condition of an existing competitor. Calling for a shift of consumer spending from one company to another is a drastically different statement from "boycott Taco Bell!" Stopping the market transactions of mutually benefiting exchange in the name of moral obligations does not produce anything of lasting value to assist in capital accumulation or increasing standards of living.
The CIW and JVC have mobilized thousands of activists to take action against Taco Bell, inhibiting market interaction. All the while CIW members face day to day strife paying high rates for housing, supplies, food, and clothing. If these thousands of people were buying, selling, and trading products and services with the Immokalee workers rather than stomping their feet in protest, how much more effective would they have been at raising migrant workers’ living standards?
CIW has also begun to teach communalistic practices to the workers. They have organized worker co-ops in which individuals provide tools, supplies, food and clothing at cost levels for one another. They place value on people rather than profit and imply a depravity towards profit. While guided by noble intention these practices do not seem sustainable for the conditions of a dynamic resource environment. The only way to create conditions of lasting wealth and improving standards of living is through capitalism and mutually benefiting exchange.