Why we Indians don't like queues ?

It’s a very common scene in India . People trying to skip queues and get in front of you until nudged. Seen all over the country. Its become a second nature for us.

The same Indians change their behavior when out of India . They will not only stay in queues but even maintain enough distance from those in front of them .

What is it that has, in a sense evolved us Indians into this kind of behavior ? Lets step back a moment to understand what is  going on here.

Free markets

Free markets are based on the principle of voluntary exchange. The price of any commodity is decided by mutual agreement between seller and buyer without external coercion. Both buyer and seller are free not to have the deal if any one of them does not want to .

This system has a very special property. What is it ? Only those people get to consume a commodity who were willing to pay an equal or higher price than the price at which the transactions are finally made . The people who don’t get the commodity are those who were not ready to pay or cannot pay the price at which the transactions were finally made. Economists say that this results in supply equaling demand at the given price.

What does this mean for the buyer? This means that in cases where the seller determines the price according to the market , if I am ready to pay the price advertised by the seller, in most cases (not in all cases)  I can be reasonably sure that I will get the stuff whenever  I reach the seller.

Price controls

A favorite device of most politicians to win elections is to promise price controls to the electorate. In literal terms they promise to , by exercising their eventual executive or legislative powers, force the market to provide a commodity at a lower price than the market price. In almost all cases these promises yield rich political dividends . The kind of commodities on which such policies are generally applied are those which are considered ‘necessities’ for everybody.

Let us see how price controls affect the psychology of the buyers.

Most sellers  generally choose the investments they make by evaluating options and preferring those which give them the maximum profits. For example if producing rice and wheat require similar inputs and rice sells at a higher price that wheat , more farmers will move towards producing rice than wheat . Economists say : Other things remaining same, the quantity of a specific product produced increases with the price at which it sells in the market.

What do price controls on a product , result in ? As we saw above , when we put price controls on any product, less people will be willing to invest in producing it . The supply decreases compared to what it would have been in the free market .

The number of people who want a product becomes more than the amount available at the given price . As shown above, the rule as to who gets the product in the free market was simple . If you can pay what the seller sets the price to, you will get it. What is the rule by which these price controlled products are distributed ? No other mechanism remains other than to make it random because there is no other differentiating criteria : all these people are ready to pay the advertised price. Well, not exactly random!

I know all this crap, you didn’t talk abt queues!

What does this mean for the buyer?  Given the price advertised by the seller (forced by the government) , a buyer is less sure  that the product will be available for him to buy, by the time he/she reaches the seller.

In many cases even if the product is available at the time  the buyer reaches the sellers premises , it might go out of stock by the time he is actually ready to make the transaction .

What happens when queues are formed for products with shortages?  Among the people standing in the queue , a group at the beginning of the queue will get the product and another group at the back will not despite they being ready to pay the same price at which the others got it .

When prices are decided by the free market, the people chosen to receive the product are chosen by the amount of money they have . When we have price control induced scarcities, the people chosen to receive the product are determined by their position in the queue.

How does this change the set of incentives for different societies ?

Societies where prices are determined by markets provide an incentive for people to become more productive and earn more money when they are not in a queue and not skip queues when they are in queues.  

Societies where governments choose to control prices,  reduce the incentive for people to become more productive when they are not in the queue (because earning more does not improve their chances of getting the product) and increases their incentive for skipping queues, for obvious reasons.

Humans, like every species, evolve . Darwin talked about survival of the fittest. Specimens of a species which adapts better to the prevailing conditions are chosen by the process of evolution. Specimens which are not as apt, given the circumstances, either change or vanish.

Indians as you see this day, are the result of this process of evolution.

Black Friday deals

The best test bed for this theory is not in India but thousands of kilometers away in the USA,  a few weeks before Christmas.  Its amusing to see how easy it is, to reproduce the same Indian behavior in Americans (otherwise known for their queuing etiquette) , just by doing exactly what the Indian socialists have been imposing on the Indian ‘junta’ for decades. Few announcements by few shops to sell products at prices below the market price, result in this . Its high time we stop blaming Indian queuing habits on ‘we - the junta’ and put the blame at the doorsteps of those who deserve it, the Socialists who got hold of our country after independence.