March 4, 2019 Reading Time: 5 minutes

You are strolling around a thrift store — op-shopping, as they call it in Australia — and happen upon a beautiful mechanical clock from the turn of the 20th century. So charming! Here it sits alone and unloved, begging to tick and chime again. It needs you so badly. (If you are confused why, read my past two tributes to mechanical clocks.)

The dealer is asking $40. It’s a steal! You adopt it, get it home, and then discover a few problems. It ticks but not reliably. The chime is pretty, but the gears are noisy. It loses or gains 10 minutes per day.

No problem, right? There is a clock repair shop not far from here. They can probably fix this while I wait.

Time Preference

Here is where the confusion begins. You have entered into the strange world of clock repair, where you can wait up to two years before getting your clock back, and you have absolutely no assurance of how much you will pay. Could be $100. Could be $1,000. Somewhere in between those two numbers, you have the realization that you could have purchased a newly restored clock that is sitting right there at the repair shop for $350. And you could have taken it home that day.

The wait times are heartbreaking. It’s not unusual. Based on conversations I’ve had with other clock repair places around the country, a wait time of eight months is considered short. Why do people go along, rather than buy a restored one off the shelf? I suspect it has to do with the sunk-cost fallacy: you are so proud that you paid so little for the used clock that you are irrationally willing to pay vast amounts to prove you got a good deal.

Regardless, time is money. Maybe you would rather pay double the amount to speed up delivery. We do this with shipping all the time. The laundry or tailor will get your clothes back to you in one day, but you are going to pay a premium. It’s fine, so long as we know.

The price charged is a reflection of what economists call “time preference” — which in this context takes on all new meaning. Everyone prefers to realize his preferences sooner rather than later. The extent to which that is true for any particular individual can be rendered in terms that codify the cost you are willing to pay. This is the interest rate in financial markets.

In the market for repairing clocks, it could be reflected in the price: $5,000 for a one-day turnaround, but $500 for one year. So far as I can tell, this pricing model hasn’t yet made it to this industry.

High Skills

To be sure, the consuming public is wildly confused about what the required skill level is for clock repair. There are whole schools devoted to this. The masters of the craft combine skills of the jeweler and the engineer in what is really an obsolete technology. So, yes, I can understand how one must be willing to pay to engage such skill.

I spoke with one such specialist at some length. He was positively maudlin about the disappearance of the craft. He said that the people who go to school to learn are typically retired. Once they learn, they sit at home and fix their own clocks but have no interest in the disciplined life of showing up to a repair shop daily. Why no apprentices? He says that he is too busy repairing clocks himself to spend time teaching someone else.

Still, he does worry that his is a dying art. What happens when he is gone?

Money and Motivation

He, like most people in this industry, assured me that he is not in it for the money. He is devoted to the skill as art and the preservation of these amazing innovations of the past.

That’s a beautiful thought. Then again, that might be the very source of the problem. The skilled craftsmen are so focused on the realization of the dream that they haven’t noticed the most obvious thing: these wait times are intolerable. They wouldn’t be tolerated in any other industry: not cars, not sprinkler systems, not clothing, not medicine.

Somehow we have the equivalent of Soviet-style bread lines for clock repair, and no one seems particularly enthused about fixing it.

The economist in me believes the answer to the problem is simply to raise prices. This is how you ration a scarce good or service. This shifts the quantity demanded. Fewer people will get their clocks repaired, but that is precisely what is needed. Instead of paying for repairs, people will turn their attention to the refurbished models sold on the sales floor. Then at a higher level of profitability, more people will be incentivized to enter the industry and the market can eventually clear again so that clock repair becomes affordable again.

Now, obviously there is no legal restriction preventing this from happening. So why isn’t it happening? It strikes me that we have an evolved skill set here in an industry with a single maladaptive but persistent trait. This trait amounts to what my colleague Max Gulker calls a “cultural price control.” It is sustainable only because the industry is not competitive in the perfect sense you find in textbooks.

Then again, let’s forget the textbook model and observe that markets are imperfect, especially highly specialized ones like this. They never work in real life the way they do on paper. This is especially true of an industry that is geographically diffuse, and will necessarily remain that way, simply because people will always choose the local clock mechanic over the distant one. And it does appear that most cities have one or two service providers at most.

In other words, we have a case of local monopoly here. What’s surprising is that the monopoly power results not in high prices but rather in extremely long wait times. This is a choice that the providers make, in a manner consistent with their preferred trade-off of revenue vs. job stress. It’s not up to the economists to wag a finger of disapproval here.

That said, my own sense is that the industry could use a bit of commercial derring-do. Chelsea Clock, Clockworks, and Master Clock Repair seem to be moving in this direction. The limitation of all these services is that they require something of the owner. You need to submit a detailed request for an estimate, be prepared to disassemble the clock yourself, ship it off to them, and so on. It goes without saying that there are no house calls!

There is a lesson here. Even the freest market — I can’t think of any regulatory restriction on these institutions — will be academically imperfect simply because we live in a world of information asymmetries, high transaction costs, and geographical limitation.

The liberal order never promised a fully stress-free world that makes every dream come true instantly. What we have instead is the best-possible world of the moment that is always trending toward improvement, provided the consumer demand and capital and labor resources are there to make it happen.

The lesson is revealed in the audible tick of these remarkable little machines, each tick and each chime uniquely different from the previous one because it exists in a different moment in time that the machine itself is dedicated to chronicling in the service of human life itself.

Blessed are the makers of clocks and those who repair them.

Max Gulker models this more precisely:

Jeffrey A. Tucker

Jeffrey A. Tucker served as Editorial Director for the American Institute for Economic Research from 2017 to 2021.

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