The Free Market in Cultural Context

Over lunch at a restaurant table, sitting by myself, I happened to be thinking about a detailed logic puzzle. But my thought process was interrupted.

A fellow Indian decided to seat himself beside me at my table because all the other tables were taken during the rush of the lunch hour.

It is a rather common practice in India for total strangers to share a table, no matter how small, during their meals. However, this practice is mostly restricted to low-end eateries and Indian fast-food joints. They usually get a rush of people during the lunch hours and after-work evening hours.

What struck me about this practice was that it was a simple but elegant expression of free market operations. During the peak meal times, there is a large demand for fast and inexpensive food, which brings hordes of hungry patrons to these restaurants at the same time.

More people seated at one table means more people are quickly served their meals. More incoming customers are given seats to have their meals quickly. The restaurant makes double or triple the normal money per table. The waiters make more money in tips due to several checks per table.

All this extra and efficient earnings per table, plus the low cost of wages for waiters earning handsome amounts in tips, allow the restaurateur to control prices and provide cheap meals for his patrons. Which keeps the patron satisfied because he is getting a quick and inexpensive meal. Which means the patron will continue to patronize the restaurant, thus sustaining a business in the economy.

And in the end everyone is satisfied. The transaction has benefited all the parties involved.

Of course, a huge part of this transactional chain is a cultural inclination of Indians, who are extremely flexible with their notions of private space ... if they even have one. Such a practice would not work in the United States. Americans have a very rigid notion of private space and consider it invasive and offensive to violate this space.

But the beauty of the free market is that it allows such cultural considerations to seamlessly guide the transactional operations without external regulation, monitoring, or coercion.

On the other hand, even though Indians have few qualms about the invasion of personal space when it comes to inexpensive fast-food eateries, they become highly attuned to space issues when they visit expensive restaurants.

This is again the operation of the free market creating transactions that factor in cultural considerations. In expensive restaurants, the extra money you pay is intended to ensure not only exotic food but also a unique experience. And the money buys you the privilege to control who comes within the sphere of your pleasurable experience, who invades or shares your personal space, whether it be a stranger or your companion.

The restaurateur has to respect this demand from his customers if he intends to continue his business of charging expensive rates for the food and ambience of his restaurant. Thus, the items on the menu are pricey and the tips given to servers are generally higher.

Customers do not complain about this because it is a legitimate exchange of value for value. Both they and the business are benefiting from the transaction.

Now, such a thing cannot be expected from an Indian low-end, fast-food eatery because the items on the menu are not priced to provide you a value beyond just the meal. And as a customer, you are well aware of this and you do not complain. As an Indian, you are also aware of the fact that cultural mores here do not permit you the luxury of personal space at a place not intended to be luxurious.

Thus, the free market in Indian contexts provides such a wide variance in the practices observed among customers while eating out.

This is because the essence of the market is that everyone sorts out his own problems, devises his own solutions, and engages in the trade of values or ideas with others on a voluntary basis. If you don't like what you're getting, you have the right to withdraw from the transaction.

A free market in the American context means that Americans will not practice sharing tables with strangers in restaurants — no matter how inexpensive — because very few are willing to do so. As Americans, they feel that personal space is not a matter of luxury but an expression of their individuality.

Thus, the free market system is not culture-bound. It is not a uniquely western phenomena unsuited for the needs and mores of non-western cultures.

The free market need not be modified, tampered with, controlled, or monitored by government "checks and balances" simply because they distrust this free-for-all "western" system. The free market is simply a term designated to denote individual freedom in economic matters.

And all individuals across the globe — regardless of their culture — have the right to be free.