Test for people and cows!
With reference to the protests of the milk producers in the country, IME offers to your attention a special test to evaluate your position on this important problem.
1) Imagine that you are a milk producer and you have the following problem: the price of fodder (to feed the livestock) is increasing and at a given moment becomes higher than the price of milk itself. What would you do?
А) Increase the price of milk even if it would reduce the quantity of milk sold.
B) You go in front of the Parliament and insist for state subsidies – in other words the increase to be covered by all taxpayers in the country rather than the actual milk buyers.
C) Insist the state should finance the production of special high quality fodder for cows, which should be given free of charge to the livestock
2) The above mentioned problem remains and you are force to act. The cows are hungry and things look really serious. What do you do?
А) Increase the price of milk to be able to feed the cows. If necessary, sell some of the animals to somebody who could feed them (respectively make business with them) and with the revenue from the sale sort out the difficult situation.
B) You wait until the cows die and transport the bodies in front of the ministry, insisting for additional subsidies. To celebrate the brave move, demonstrative spill half a ton of fresh milk on an arbitrarily selected road in the country.
C) Insist that the cows are immediately employed as government employees (with the respective salaries and benefits). Naturally you keep the subsidy.
3) In this critical situation one could no avoid asking the question about your vision of the market organization?
А) You know about the supply and demand curves and have heard about the "invisible hand" (although you have never seen it). You do not think that any subsidies are required – neither for the cows nor for the milk itself. It sounds a bit strange that there is a "buying price" and "licensed buyers". Up until now you have herd mainly about a "market price".
B) Economic theory is a bit foggy for you, but you are sure about one thing – it is necessary to have high subsidies (for the cows and the milk) which come from the state budget, the budget of EU or in general any other place which uses the money of other people.
C) You agree that the idea of cows state employees sound a bit crazy, but you are convinced that all subsidies are given for the cow itself or its products, which gives you the foundation to ask for complete autonomy of the cows from the milk producers, which exploit the labor of the animals and take away their subsidies.
Answers A predominantly) – Congratulations! There is a very high probability that you have seen the famous phrase of Adam Smith – "our lunch is not dependent from the good will of the butcher, the brewer and the baker, but from the way these three defend their own interests".
Answers B predominantly) – You are definitely a milk producer and think, that in the economic theory the profit is formed on the basis of some redistribution of funds – preferably for your benefit.
Answers C predominantly) – It is very likely that you are the famous cow "Milka", which has come from Switzerland to solve the problems of the sector in Bulgaria.