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Black markets in everything
With candy sales banned on school campuses, sugar pushers are the latest trend at local schools. Backpacks are filled with Snickers and Twinkees for all sweet tooths willing to pay the price. "It’s created a little underground economy, with businessmen selling everything from a pack of skittles to an energy drink,” said Jim Nason, principal at Hook Junior High School in Victorville.
Here is more, with a thanks to Eric Nielsen for the link. I would put it this way: school kids are more economically advanced than astronauts.
Posted by Tyler Cowen on March 24, 2008 at 03:45 PM in Education | Permalink
Comments
Maybe they learned from Randy on The Wire: http://en.wikipedia.org/wiki/Randy_Wagstaff
The lil hopper who slang candy.
Posted by: Joel W at Mar 24, 2008 3:55:33 PM
Unintended consequence: Networks established in the candy trade will transform into drug dealing networks. Skittles are the new gateway drug.
Posted by: Christopher Monnier at Mar 24, 2008 4:00:40 PM
South Park did it! Cartman was sent to fat camp and would sell snacks to all the kids in camp after hours.
As for me, I just used to use my reduced lunch fare to buy at the reduced price and sell at some price less than the market price. Wait, is that not what was intended by the policy?
Posted by: AZ at Mar 24, 2008 4:00:48 PM
You simply cannot suppress a market.
Posted by: Mike Fladlien at Mar 24, 2008 4:03:51 PM
Actually, I wonder if incidents of violence will increase at schools that institute such a ban. Crime went up during [alcohol] Prohibition and drug prohibition; why not during candy prohibition? Seriously, I'm very interested to see if this is true.
Posted by: Christopher Monnier at Mar 24, 2008 4:08:57 PM
I think it was Orwell who said there are some ideas so preposterous that only an educated person will believe them. The idea that you can prevent children from eating candy is one of them.
Posted by: John S. at Mar 24, 2008 4:18:10 PM
Another unintended consequence: Gov. Schwarzenegger pushed for this legislation to pass. The backlash will create a generation of libertarian-minded children and drive them away from the Republican party and into the arms of the Democratic party.
Posted by: MostlyAPragmatist at Mar 24, 2008 4:23:18 PM
This is nothing new. 15 years ago, in middle school (6th-8th grades), the percussion section of the orchestra was famous around my school for running a candy ring. We sold Jolly Ranchers and Pixie Sticks, pretty much anything that was small, individually wrapped, and could bought in bulk, typically for about a 400-500% markup. We quickly learned to take advantage of buying power (using our parent’s BJ’s Club cards rather than grocery or convenience stores) and avoided selling big ticket items like candy bars because students were more aware of the retail price and would scoff at anything above 2x that (squished or melted chocolate also was a problem). It was also easier for students to eat those items in class w/o getting noticed by the teachers. We had 2 inherent competitive advantages, as we were centrally located within the school and the orchestra class coincided with the mid-morning 15min break that gave us time to provide the service. We also learned it was important for all us to be available to sell on Mondays and Tuesdays as much as possible, since many students’ parents gave them their full weeks worth of lunch money on Monday. This went on for almost 2 years until the school administration told us to shut it down after others kept trying to set up their own selling scheme (albeit with much less success), but the assistant principal in charge of disciplining us laughed and quietly praised our entrepreneurial spirit after we told him how much we made. Each drummer took a net profit of about $3-5 per day on average. Not bad for 15 minutes of work.
Posted by: Shaun M. at Mar 24, 2008 4:28:45 PM
I, too, resold gum at school at a 400% markup in eighth grade to support my video game habit.
Posted by: mobile at Mar 24, 2008 4:40:48 PM
Yep, me too. I sold Now and Later's at 150% mark-up in elementary school in the 80s.
Posted by: joe at Mar 24, 2008 5:17:47 PM
How long till we hear calls for the "War on Candy" and the C.E.A? Sorry I could not resist.
Posted by: john pertz at Mar 24, 2008 5:56:40 PM
Well, students get to play the game every day and quickly figure out the opportunity. Astronauts have a couple at best? Although astronauts the group should have figured it out--maybe their thinking is too narrowly focused.
My anecdotes are that I sold shark's teeth my dad used to pick up from a coastal industrial site and in high school I used to serve detention for other students for money.
Posted by: Arnie at Mar 24, 2008 7:40:58 PM
What a great educational experience for them!
Posted by: Jacqueline at Mar 24, 2008 7:41:33 PM
Certainly everybody heard about the honor roll student a few weeks back who almost got expelled for allegedly buying candy in such an underground market? It was the quite the flap for a few days, but was resolved properly, it seems.
http://www.upi.com/NewsTrack/Quirks/2008/03/12/honor_student_suspended_for_buying_candy/4469/
Posted by: Ben at Mar 24, 2008 8:09:21 PM
Following on John Pertz's zingers, what about a Cali candy cartel? How long until Uncle Sam will be bombing sugar cane fields in Central America? Can it grow in Afghanistan, so that the Taliban can diversify from poppy seeds into ... the new heroin, candy?
The first Bill Clinton didn't inhale; the next one might not suck. Or maybe he will, politically at least.
Posted by: Bill Stepp at Mar 24, 2008 8:09:38 PM
Imagine: a reprimand from a principal for running a candy ring might become *the* invaluable reference letter needed to get into top-tier B-schools.
Posted by: 72 km/h at Mar 24, 2008 10:20:46 PM
Way back when, a buddy of mine was always hustling something in school. Candy, jerky, novelty pens, anything that would sell. This was in the early 80s, at a Catholic high school. He funded a fancy clothing habit that way. He did get caught on a couple occasions, had candy confiscated. ISTR he was compelled to give up that day's earnings to the chapel fund or some such thing. But it never stopped him altogether.
Posted by: shecky at Mar 24, 2008 10:31:52 PM
I was a teenaged candy peddler. I would sell, under the winking eyes of friendly teachers, plain and peanut M&Ms and Snickers (all king sized) to breakfast-deprived honor roll students. I bought boxes of 36 candies for $24 (friendly parents with Sam's membership), which I sold at a dollar each, and I was able to push 2-3 sets (of each variety) a week. It started as a Boy Scout fundraiser, but after the fundraising ended, the profit began. Of course, I never actually told my customers that they were supporting such an organization; all they cared about was the candy.
Back then, I called it profit. Now, I'd call it arbitrage.
Posted by: Patrick at Mar 25, 2008 1:56:00 AM
"The backlash will create a generation of libertarian-minded children and drive them away from the Republican party and into the arms of the Democratic party."
Out of the pan and into the fire, huh? I doubt it.
I do agree with the first part of your statement, though.
Posted by: Tom at Mar 25, 2008 9:19:02 AM
I believe that this is actually a pretty cool thing to have available to kids in public schools. If a student has the intellectual ability to advantage of a market place in which he is forced to be involved with, on top of which the administration makes the targeted item illegal on campus. Who wouldn’t capitalize on a situation like this? Maybe the slower weaker kids that do not have the foresight to bring a whole box of candy bars to an area where they are worth twice as much is an indication of them being consumers in the equation. Why should this trend even be a problem, when did people of any age start having to answer to anyone but their mother about what they decide to snack on. I believe, even with candy out of schools the majority of kids go home and eat candy out of the jar on the counter. Apparently, they are still eating candy at school to, just for a little higher price! Let the smart ones make money off of the situation and let the dumb ones get fatter.
Fletcher King
Posted by: Fletcher King at Mar 25, 2008 11:12:16 AM
Or are we teaching our children to mimic lower primate behavior? (both left and right side politics seem interested in seeing these outcomes made real).
Based on certain studies done by certain economic institutes (laughing), it sounds like they are mimicking the "rational" behavior of lower primates, and moving away from traditionally more advanced higher modeling/signaling primate (us) "irrational" behaviors?
And of course a modern economic prof would view lower primate behavior to be more "rational" than the behavior of primates capable of leaving their planet.
Interesting juxtapositions, all in all.
I'll stick with primates capable of reaching space, and give up king rat philosophies of the lower primates.
But that's just me. I like heated water. Something the "rational" primates haven't managed to achieve yet. (snicker)
Posted by: Lawrence at Mar 25, 2008 11:21:52 AM
I'm not sure why rewarding the rent seeking behavior of criminal monopolists is a sign of economic advancement??? (No offense to those who engaged in this behavior in high school) A rational student would wait the 7 or 8 hours to go to the convenience store and get the same items at up to 75% discounts.
An astronaut who engaged in this rent seeking would probably find himself waking up in a different orbit from his M&M's, even though the other astronauts have to wait much longer!
Posted by: ideogenetic at Mar 25, 2008 12:32:27 PM
Imagine: a reprimand from a principal for running a candy ring might become *the* invaluable reference letter needed to get into top-tier B-schools.
Supposedly, the first interview question for those interviewing for entry-level trader jobs at the Chicago Mercantile Exchange/Chicago Board of Options Exchange is "Did you run the football pool in high school?"
Posted by: Dave at Mar 26, 2008 10:11:27 PM
I thought of doing this, but I decided not to. I regret that decision. It seems like fun. But I've never been a social person, and those were awkward adolescent years. Anyway, I think it's a good opportunity to learn about business and opportunity. It may be a tad unethical, but so's banning candy, in my opinion. Besides, like it or not, that's the way the world works nowadays. Businesses are always looking for unethical stuff to get away with--at least, that's what the media would have us believe. I'm no expert on corporate dishonesty or human morals. I just wish I'd tried to get away with more as a child. I was a good child, and while that's a good thing, I'd say I missed out on a lot of mischief. After all, childhood's the time when you're allowed to get in trouble, and I wish I'd realized that sooner.
Posted by: Anon at Mar 27, 2008 12:25:32 PM
