The Wire on Mcnuggets, Compensation Schemes and Consumer Surplus

I’ve recently started watching The Wire again, and it’s even better than I remember it. One of it’s amazing qualities is the ability of its characters to transcend their stereotypes and even situations to discuss relevant topics in interesting ways. One memorable incident in the first season occurs when one of the young drug dealers, Wallace, starts pondering the quality of chicken McNuggets:

Wallace: Man, whoever invented these, he off the hook!

Poot: What?

Wallace: Motherfucker had to bone out all the damn chicken. Till he came along niggers been chewing on drumsticks and shit, getting their fingers all greasy. He said, “leave the bone. Snug that meat up and get some real money.”

Poot: You think the man got paid?…

Wallace: Shit, he richer than a motherfucker.

D’Angelo: Why? You think he get a percentage?

Wallace: Why not?

D’Angelo: Nigger, please. The man who invented them things is just some sad ass down at the basement at McDonald’s, thinking up some shit to make some money for the real players.

Poot: No, man, that ain’t right.

D’Angelo: Fuck right. It ain’t about right, it’s about money. Now you think Ronald McDonald gonna go down that basement and say, “Hey, Mr Nugget. You the bomb. We selling chicken faster than you can tear the bone out. So I’m a write my clowny-ass name on this fat-ass check for you.” … Man, the nigger who invented them things – still working in the basement for regular wage thinking of some shit to make the fries taste better.

Wallace: Still had the idea, though.

There’s actually a whole article on why McDonald’s products taste so good, and surely the answer would satisfy D’Angelo’s cynicism: corporations in New Jersey churn out hundreds of flavors, tinkering with tiny quantities of chemicals to replicate tastes ranging from strawberries to root beer. And what makes chicken McNuggets taste so good, of all things, is beef extract (as well, in the US, some less savory ingredients). In any case, it seems that in terms of compensation things probably aren’t as bleak as D’Angelo presents them — these food scientists seem to be making, if not a percentage, than a good wage.

But the real economic story here is Wallace’s reply — the inventor still had the ability to come up with the idea, and it was put to work. Even if the inventor of McNuggets wasn’t fairly compensated – and it’s hardly the case that American innovators are routinely ripped off – the consumer surplus generated by cheap, tasty products is huge. On his own, an innovator could not scale up to make so many products for so many people: as Thomas Thwaites demonstrates, a person working all year on their own couldn’t make a plastic toaster they could purchase for less than 4 pounds. It’s doubtful that on his own a person could even invent chicken McNuggets, considering both the incentives (if you don’t have a way to sell so many pieces of chicken, why create a product designed for speed and easy creation?) and industrial capability (you need a lot of capital and big laboratories to make this complex blend of chemicals). So while corporations may not compensate people perfectly, their size and incentives allow them to generate major consumer surpluses, and improve human welfare.

Photo: Copyright HBO, used under fair use.

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