The Wall Street Journal published an article about high school students in Citronelle, Alabama using the Wi-Fi at McDonald’s restaurants because they did not have internet connectivity at home. It’s a real story of low income families creatively making ends meet for the sake of their children’s education.
It may seem surprising that companies like McDonald’s and Starbucks are offering free internet. They are unexpected places to find people’s needs being met. If you told someone twenty years ago that McDonald’s, Starbucks, and other companies would provide free internet access, they probably wouldn’t have believed you. But market innovations have ways of surprising us.
The WSJ article outlines two important economic principles that help us see how these companies are meeting needs in unexpected ways.
1. Economic value is subjective.
Christians often shy away from the use of the word “subjective” because of our belief in an objective truth which comes from God. Yet in the realm of goods and services–the realm of economics–people value different products and services differently depending on their personal or “subjective” valuation.
We were all created by God with different preferences, gifts and abilities. We are all objectively valuable because we are made in the image of God. Psalm 139 is testament to God’s creation of who we are and His intimate knowledge of each of us:
You have searched me Lord, and You know me…For you created my inmost being.
However, we subjectively value things because of innate and unique preferences and characteristics. In addition, in a world of scarce resources, our subjective valuations inform how we exercise dominion over the resources God has given us charge over.
For the families mentioned in the article, they made choices about where to spend their money that directly impacted the students’ need to visit McDonald’s for Wi-Fi. The author points out how one parent made the choice to discontinue a land-line telephone and internet, and keep their satellite television and mobile phone subscription. The fact that the parent kept these two services speaks to their valuing them more than the others.
2. Self-interest can benefit others.
McDonald’s and other companies providing “free” Wi-Fi, like Starbucks, are seeking to draw customers in to buy their products (I place “free” in quotation marks because nothing is truly free, as discussed before).
The companies’ franchise owners make this sentiment clear in the WSJ article. The reporter quotes Jonah Sigel, who oversees Starbucks’ Wi-Fi program:
Before I started working here I always felt guilty for not at least buying a bottle of water. I hope people act similarly.
Sigel is making a calculated bet that most people will not use their Wi-Fi without paying for some product. The company still leaves access open to those who choose not to pay anything in exchange.
Motivated by their self-interest, these companies are providing a useful tool to the public. In this case, these businesses are fulfilling a need in their communities by providing internet access for people without connectivity at home. The local government provides access at public libraries, but after the library closes, Starbucks and McDonald’s help fill the gap.
This is a strong example of how self-interest can benefit others. As this article illustrates, people’s needs can be met from unexpected places and aid in their self-guided improvement.
Editor’s Note: On “Flashback Friday,” we take a look at some of IFWE’s former posts that are worth revisiting. This post was previously published on May 3, 2013.
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