Truck and Barter: Cross Border Goods Arbitrage

November 09, 2004

Cross Border Goods Arbitrage

By Bob

Appearantly, a small town in eastern Germany, Görlitz, has the equivalent of Wal-Mart in its area, Poland(If the link doesn't work go to this post at the Corner where I found it):

In addition, East Germans, to a much greater degree than West Germans, fail to see the causal relationship between their actions and the results of those actions. In Görlitz, for example, a city on the Polish border, people normally do their shopping in Zgorzelec, on the Polish side of the Neisse, because things cost almost half as much there. At the same time, stores are going out of business in Gorlitz and more and more people are leaving because there are no jobs. Gorlitzers complain about this and expect the state to do something -- but they keep going to Poland, where things are much cheaper and business is booming, to shop, fill their gas tanks, and get haircuts.

Posted at November 9, 2004 08:48 PM

Comments

Perhaps this is a case where the government really does need to do something. I doubt this is a situation where it is more efficient to have your hair cut on the Polish side of the river, whereas with Wal-Mart, it actually is more efficient to purchase socks from Wal-Mart instead of from the local Mom & Pop retailer. Why is there such a dramatic difference in price on either side of the river? The reponse by the government shouldn't be to prevent people from purchasing goods from the Polish side, but rather, to reduce whatever barriers to business that currently exist in East Germany.

Comment by Rob at November 10, 2004 02:45 PM | Permalink

Rob, you're probably right. A better way to put it might be that the government needs to *undo* something!

Comment by Brian St. Pierre at November 19, 2004 01:34 PM | Permalink