🇬🇪 The Dancing Milk Prices: Why a “Weak” Government Makes Us Happier (Field Report)

In South Korea, a mere 100-won hike in ramen prices triggers a media frenzy, decrying a “crisis in the working-class economy.” The government immediately draws its bludgeons—tax audits and Fair Trade Commission investigations—to beat corporations into submission. People believe “Jam-papa” (the President) is protecting them from evil, predatory corporations.

But is that the truth? Here in the rural Georgian town of Gori, I witnessed the reality behind this systemic gaslighting. The truth is that “Weak” Government Makes Us Happier.

---

1. The Hunt Begins: 2.99 GEL Milk and the Blessing of Volatility

Two days ago, milk was 3.5 GEL. A few days before that, it skyrocketed to 5.5 GEL—a 57% surge. But this morning? The price tag reads 2.99 GEL. This isn’t a story about volatile crypto coins; it’s the dairy aisle of a neighborhood mart in Gori.

I scooped up three cartons, savoring the victory. Someone with a Korean mindset would grumble: “What is this government doing? Why aren’t they controlling prices?” But the locals don’t whine. They simply fill their baskets with whatever is on sale. Excess supply is consumed, and scarce goods are restocked through further distribution. To these people, price volatility isn’t “incompetence”—it’s a hunting opportunity for the wise consumer. Through individual rational choices, the market breathes its way toward equilibrium.

---

2. The Secret of Downward Rigidity: State Intervention Freezes Prices

Economists in advanced nations call the phenomenon where prices rise but refuse to fall “Downward Rigidity.” The Left, in particular, labels this a market failure to justify state intervention. Let’s dissect their excuses.

(1) Menu Cost Theory? Not in the Digital Age.

In school, I was taught that firms don’t lower prices because it’s too much of a hassle. They claim the cost of printing new menus, updating ads, and reconfiguring systems—Menu Costs—outweighs the benefit of a price cut.

As someone who has actually run a business, I can tell you that’s a lie. Prices don’t fall because fixed costs don’t fall. When you’re forced to pay a minimum wage that exceeds productivity, you look for every excuse to raise prices and have zero incentive to lower them.

But the reality in Gori is different. When employees clock in, the first thing they do is update price tags and input the daily adjustments into the POS system. In our digital era, Menu Cost Theory is a fossil. It simply doesn’t exist in the real world.

---

(2) The Myth of Oligopolistic Tyranny

The Left’s favorite narrative is that “Evil Big Tech/Corps” control the market and squeeze consumers dry because they have the power to set prices at will. Wrong. True monopolies and oligopolies are created by state-mandated tariffs and entry barriers. In a truly free market, a low-cost competitor would emerge and slap the face of any big corp trying to overcharge. However, the state blocks this under the guise of “consumer protection”—imposing hygiene regulations, facility requirements, and licensing hurdles.

Since corporations must pass these compliance costs onto the consumer to survive, they never lower prices even when raw material costs drop. Downward Rigidity is not a market disease; it is the result of state-administered anesthesia. Furthermore, in a system like Korea’s, where the government brandishes tax audits every time a price moves, firms learn to live in fear. They think: “If I lower prices now and try to raise them later when costs go up, I’ll be slaughtered by the state.” So, they stay frozen.

In contrast, the Georgian government doesn’t care about milk prices. Consequently, prices breathe in real-time with supply and demand. The 2.99 GEL price tag is an honest signal, delivered directly to the consumer.

---

3. Why Low-Cost Milk is Extinct in Korea, and Why Prices Only Move Upward

(1) The Extinction of Low-Cost Milk

The disappearance of low-cost milk in Korea isn’t due to a lack of technology. It’s the result of legal barricades and a state-mandated price floor for raw milk. The government slaps high tariffs on imported sterile milk while imposing insurmountable hygiene certifications (HACCP) on small-scale producers. The price floor is decided through backroom negotiations between the state and massive dairy cartels. Naturally, these compliance costs are passed on to the consumer, making low-cost milk a structural impossibility. Only the giants survive, while the taste and quality of milk are leveled down to a mediocre average. The state’s certification system has devolved into a gatekeeping license that blocks small producers and guarantees profits for oligopolies. In reality, major Korean convenience stores carry only two measly types of milk.

Many consumers, including myself, worry that without minimal hygiene regulations, externalities like mass food poisoning would occur. A system where the state uses massive resources to restrict entry beforehand (such as HACCP) appears safe on the surface. However, it ultimately creates oligarchies for a few large corporations, causing prices to skyrocket. From a producer’s perspective, this creates a temptation: “As long as I meet the regulatory standards, the raw material costs are actually very low; if I can just cheat the regulations, I can enjoy massive margins.” Consequently, they rarely invest in areas devoid of regulation, which paradoxically leads to frequent accidents in those very sectors. Even if a problem occurs, corporations dodge responsibility by claiming, “We met all the standards mandated by the government,” and feel no need to strengthen their competitiveness by creating safer products.

In fact, during my childhood, mass food poisoning incidents rarely happened. In the past, local consumers immediately consumed food made by neighborhood bakeries, butcher shops, and rice cake shops. Even if a hygiene issue occurred, it ended as a “localized stomachache” affecting only a few people who frequented that shop, and the business naturally went out of existence through neighborhood reputation.

Conversely, massive regulatory costs like HACCP wiped out small, local producers, allowing a few giant food factories to control supermarkets and institutional food services nationwide. In this oligarchic structure, the moment a single main line in a giant factory is contaminated, or a single corporate OEM supply chain that cheated regulations breaks down, it escalates into a massive food poisoning disaster where tens of thousands of children across the country collapse simultaneously.

Similarly, restaurants that manage their operations poorly would normally disappear naturally through consumer choice if government regulations did not exist. Instead, they exploit regulatory loopholes, realizing that local district offices rarely conduct hygiene inspections on delivery-only establishments. They shift to low-profile business models to continue unhygienic manufacturing. Consumers also slacken their vigilance and act complacently because they trust government oversight. The physical immunity of consumers who use only products conditioned by regulations has dropped significantly compared to the past. Consequently, they are physically vulnerable to even minor variations, leading to more allergies and infectious diseases, which in turn prompts the government to increase regulations even further. Nevertheless, Producers learn that as long as they deceive the regulations, they face no consequences.

In a free market, however, intense competition paradoxically gives rise to archetype products that everyone must acknowledge. Products with a quality lower than their prestige and reputation are expelled immediately. Because consumers know the government provides little protection, they have an incentive to develop their own connoisseurship, inspect choices thoroughly, and trade with trusted businesses. Therefore, hygiene issues occur less frequently.

Nevertheless, modern democratic citizens are so accustomed to government protection that they do not know what to do without regulations. Rather than spending their own money to judge, taking risks to build survival knowledge, and participating in spontaneous information-sharing networks, they simply conclude that it is more convenient to buy what the state has already approved.

In contrast, Gori—a small town of 40,000—boasts over seven varieties of milk in its marts. At the traditional market, you can buy milk and cheese squeezed directly from the cow. Facebook Marketplace is flooded with photos of local merchants selling their own cheese. I visited a shop known for its large-holed cheese and bought a tub; it was a flavor I had never experienced in Korea. Because it’s made from unpasteurized milk using wild bacteria, the layers of flavor are infinitely richer. No emulsifiers, no preservatives, no acidity regulators. And the price? Significantly cheaper than the supermarket.

For the consumer, if big dairy companies act like tyrants, they can simply walk to the market and buy fresh milk. Hygiene is handled not by a scrap of paper from the government, but by the community’s reputation (Data)—the collective knowledge of “whose cow is healthy.” Since the price is low, the responsibility to judge the food’s condition and boil the milk yourself lies with the consumer. Without government shackles like taxes, regulations, licenses, and minimum wages, local small-scale producers jump into the fray the moment prices rise, acting as a natural price ceiling. Even as wages remain stagnant, the emergence of low-cost suppliers increases real purchasing power. This is Producer-Led Deflationary Competition. In a normal market economy, the one who sells the same product cheaper wins.

---

(2) Why Prices Keep Rising in the Democratic Welfare State

People in democratic welfare states rarely experience deflationary competition. Even if producer competition lowers production costs by 2%, if the overall cost rises by 5% to pay for the state’s welfare expenses, a 3% price hike becomes inevitable. Even if firms make existing products cheaper through performance improvements, they cannot lower prices because the government constantly triggers inflation. Yet, reflecting those cost increases directly into consumer prices invites the government’s wrath.

The optimal answer then becomes hiking the price of New Products that lack a baseline for comparison. This is why modern capitalist firms are obsessed with advertising and marketing—they are going all-in on persuading you why this product deserves to be expensive. The branding costs? Passed on to the consumer, of course. Prices keep rising.

The state takes taxes from these firms to build barricades of regulations, kicking away the ladder for small producers who could make things cheaper and better. Since no one dares to enter the market for deflationary competition, oligopolies can rest easy. All they have to do is keep launching new products at higher prices.

I personally spent years developing a Medovnik (honey cake) recipe that was recognized for its authenticity by locals in the Czech Republic and Russia, and even the owner of the Hotel. But when I tried to start a small business supplying local cafes, I hit a wall: a 300 million KRW (approx. $220,000) HACCP certification fee. It is absurd that while fake Medovniks flood the market, someone who can make the real thing cannot even enter. But in Korea, this absurdity is the law.

---

4. Why the Market Works Without the State

When prices move wildly and “wildly,” producers return to their fundamental goal: lowering prices and improving quality.

(1) The Hunt: The Survival of the Value-Driven

Why are there hundreds of marts in a tiny town like Gori, with a traditional market always open at the foot of the fortress? It’s a stark contrast to a place like Taebaek in Korea, which became a ghost town after the mines closed. Here, every mart has a unique curation of goods and prices. One shop excels in imported snacks; another focuses on canned goods. Producers must maximize their strengths, curate their inventory, and use discounts or bundles to lure customers. Those who do this well, thrive.

The same applies to side dishes. A shop that piles up old inventory that doesn’t rotate will fail. Because there are no useless regulations or taxes, families run their businesses with their lives on the line (Skin in the Game). Unsold dishes are pulled immediately, and they find better ingredients from somewhere else.

Now, look at Korean restaurants. They don’t cook; they increasingly buy OEM (Original Equipment Manufacturer) products and just swap the tags. It’s not because they are lazy. They are caught in a High-Cost, Low-Efficiency Trap designed by the state. The moment the minimum wage exceeds productivity, the sincerity of simmering broth for 8 hours becomes a highway to bankruptcy. Chefs drop their knives and are demoted to microwave operators. After pouring money into ads to stay at the top of delivery apps, there’s no money left for ingredients. To cover platform fees and review event costs, it becomes survival logic to flip three factory-made frozen packs instead of making one handmade dish that takes 20 minutes. Ultimately, consumers aren’t eating food; they are eating frozen fodder seasoned with advertising costs and platform fees.

---

(2) The Neighborhood Where People Put Their Names on the Line

The Importance of Reputation

A key feature of a local community is mutual reliance for survival. Everyone is connected by one or two degrees of separation. In a place like Gori, selling bad bread isn’t just bad business; it’s social suicide. To the owner, bread isn’t just a commodity; it is their Name (Aura). The moment the rumor that “their bread sucks” hits the market floor, you are slaughtered by the community. This is a social punishment far more terrifying than government hygiene inspections. Because they sell under their own names, they take final responsibility for their production.

For example, shops near the Stalin Museum serve “one-time” tourists and generally taste terrible. Conversely, the places where locals go—while perhaps lacking in kindness—always deliver on taste. Messing up a single Lobiani (bean-filled bread) means losing a 30-year regular. Honestly, even the Shoti (traditional bread) shops seem to be struggling lately. You can see closed shops around town because of the “invasion” of supermarket bread. To compete, they lower prices and pivot to Shop-in-shops, selling vegetables and cheese alongside their bread. In Korea, it is illegal for a restaurant to also act as a mart. Instead of letting businesses freely expand their sectors, the Korean government regularly hands out subsidies or encourages them to take out loans. The Georgian government doesn’t hand out small business subsidies or “local currency incentives.” It tells them to survive on their own. Thus, the person selling yesterday’s stale Shoti is instantly slaughtered. The producer must innovate—bake fresh every morning, sell cheaper, or diversify their goods.

Why Innovation Vanishes

It was different when I ran a business in Korea. If local business was down, the state would periodically sprinkle pocket money, pay for electricity, or provide loans. Doing this dozens of times across the nation pours capital into inefficient places, raising taxes and creating a high-cost society. When merely breathing becomes expensive, any new challenge carries a massive opportunity cost. Researching and developing new food is a grueling task; you might have to sleep in a tent on the kitchen floor for weeks.

Thus, Korea obsesses over Branding, where the development risk is low and the investment effect is clear. It’s easier to buy a standardized product, swap the tag, and go all-in on branding for higher scalability. I once stood in line at one of “Seoul’s Top 3 Croissants,” only to find they were just reselling factory-made bread. Yet, they made a fortune. In such a system, who would bother actually making the bread?

---

Comparison: The Reality of Production

Category	Gori’s Shoti (Bread)	Korea’s Tag-Swapping (OEM)
Core Asset	Oven Temperature, Freshness (Data)	Interior Design, Logo, SNS Reviews (Hype)
Failure Result	Immediate Bankruptcy & “Slaughter”	Brand Renewal or Change of Industry
State Intervention	None — “Wild” Competition	Subsidies & Loans (Zombie Longevity)
Consumer Relation	Organic Reputation — Reputation Capital	Temporary Dopamine via Marketing

---

(3) In a Free Market, “Fake” New Products Vanish, and Only Insane Archetypes Prevail.

Economics textbooks teach that “free markets overflow with innovation and new products.” In reality, however, under heavily regulated economies, products from monopolistic corporations have occupied shelves for decades. Because they merely change the packaging, “new” products appear abundant on paper, but fundamental innovation in quality and performance is rare. This happens because the government continuously interferes in the market, protecting incumbents.

Conversely, Georgia minimizes government intervention. Because this lowers barriers to entry, even a small town with a population of only 40,000 (such as Gori) features abundant supermarkets and local markets, offering a hyper-diverse range of goods spanning from corporate giants to hyper-local backyard producers. In contrast, in a South Korean town of 40,000, one must drive to the downtown area just to visit a generic, corporate-owned grocery store.

The price ranges in Georgia are also diverse, spanning from extreme budget to premium. Paradoxically, this raw price-and-quality competition makes long-recognized classic products shine even brighter. This ruthless environment birthed and sustained archetypes known throughout the former Soviet economic bloc, such as Kindzmarauli wine, Sulguni cheese, and Borjomi mineral water.

Furthermore, this free competition forces even these titan archetype products to constantly lower their real prices to defend their turf. For instance, within the Soviet economic system during Stalin’s regime (mid-1920s to 1953), Borjomi was not a simple bottled water; it was a state-controlled luxury good and medical mineral water. A bottle of Borjomi cost about 1 to 2 rubles. Given that the average monthly wage of a Soviet worker at the time was around 500 to 700 rubles, buying a single bottle required a substantial portion of a day’s earnings (about 0.3% to 0.4% of the monthly wage).

Today, the average monthly wage in Georgia is approximately 1,800 to 2,000 GEL. A bottle of Borjomi costs a mere 2 GEL, which is only about 0.1% of the average monthly wage.

In short, in a free market devoid of government regulation, even high-performing legends must lower their prices to expand their market footprint. As new challengers constantly enter from the bottom to capitalize on price flexibility, the absolute volume of consumer choice explodes.

Yet, because the consumer’s benchmark is fixed on these absolute archetypes, competing products will not sell unless they are genuinely cheaper or superior in quality. The market gives birth to infinite varieties, but zero tolerance for bullshit. Consequently, fake new products that merely change labels quickly vanish from the market. Even without a single scrap of government regulation, the market

The Economics of the Welfare State: A Flood of Fakes and Tag-Swappers

In contrast, in countries like Korea or China—dominated by regulation and populism—true performance improvement is impossible. When the regulatory costs and taxes are already staggering, what is the point of lowering production costs? From the producer’s perspective, it is far more profitable to take an existing mass-produced item, swap the tag, change the branding, and sell it as a new product at a hiked price.

A deceptive play unfolds: “The insides are the same OEM, but the packaging is pretty, so let’s charge 5$ more.” From this point, packaging becomes the only technology. New products flood the market every day, but their quality is atrocious.

Hip-hop is no different. In 90s East Coast hip-hop, they dug through Jazz and Soul vinyl to find samples and refined every single lyric to madness. Everyone tried to be a rapper, but if you sucked, you were purged immediately. No one does that anymore. New beats pour out every day, but there are no real new rappers. Who practices to master rhymes or split the beat today? Only fakes and has-beens remain in the market. They drench themselves in Auto-tune, drop a half-baked album, and focus only on selling merchandise through fashion branding.

Regulated Market → Difficult Entry + No Exit = The Should-be-Dead Survive = A multitude of Mediocre Tag-swappers.

---

5. Conclusion: The Expansion of Consumer Sovereignty

The shabby administrative power of Georgia has paradoxically created an abundance of choice. Someone might buy expensive pasteurized milk—while an obscure writer like me hunts for the 2.99 GEL opportunity by putting in the legwork.

Refraining from price control and deregulation is, in fact, the most efficient form of price management. That is how prices breathe toward equilibrium. The infinite competition where producers hold a knife to each other’s throats to cut prices is the only engine that increases the real purchasing power of consumers. When the state begins to castrate choice under the guise of safety and equality—as seen in Korea—prices get stuck at the ceiling, suffering from Policy Frostbite.

The Dancing Price Tags of milk in Georgia are asking you:

“Will you be satisfied with a variety of new frozen fodder? Or will you eat one insane, ‘Real’ product at a lower price?”

---