Stephon Marbury is endorsing a $15 Basketball Shoe. Kudos to him. We’ve talked a lot about poverty on this site, and one thing that has always bugged me is when kids from families that struggle to pay utilities, wander around in $175 basketball shoes. It’s things like that which cause people not to support welfare laws – after all, if they can buy expensive shoes, why should I be subsidizing them with my taxes. But to lots of inner city kids, shoes are a status symbol, and a dream of a way out of poverty – because with good shoes, they can be like Michael Jordan. After all, it’s gotta be the shoes…
Turns out, it costs about the same to manufacture these $15 shoes as it does to manufacture those Nikes. The difference in price comes in endorsements and more importantly in profit margins. So, here you’ve got shoe companies ripping off poor kids, and making quite a nice profit off of it. This is the sort of thing that many people would complain about, and perhaps try to regulate. But the market takes care of itself sometimes. Now you’ve got a basketball shoe advertised by an NBA star which cuts down on profit margins (still makes a slight profit) but will probably make up for it in bulk.
There are still questions about whether people will actually buy the Starbury over a Nike – there is still prestige associated with Nike’s that people might want. But the point is that kids who want to play basketball can do so in an affordable shoe, and no government intervention was necessary. Often times, if we just let it alone, the market will correct itself…
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