Our View: Competition lessons from Black Friday

Every now and again we hear people lament "Black Friday," dubbed the biggest shopping day of the year. Detractors say "Black Friday is capitalism at its worst." Here's a different view: The deals are really good, but the day really serves as a bright reminder that in a capitalist society competition and incentives are key to making the most of a voluntary transaction.

Waking up at an ungodly hour to endure crowds, long lines and sharp elbows for some of the best deals of the year takes dedication, conditioning and perhaps an unparalleled commitment to getting the best stuff at the best price. This shopping holiday-of-sorts, the unofficial start of the Christmas shopping season, has become an important, festive, cultural event that celebrates capitalism in practice.

Cynics can say the whole thing was creatively engineered by marketing executives to increase retailer profits, but the actual origins of Black Friday are probably more mundane. It is believed by some that the term originated in Philadelphia to describe the heavy traffic in the area the day after the Thanksgiving holiday. A more plausible theory is that it refers to a financial threshold when retailers are finally "in the black" for the year, meaning, as the accountants would say, they are making a profit.

This year, we noticed a renewed intensity. Black Friday come-ons usually start at 5 a.m., but some stores opened their doors at 4 a.m., 3 a.m. or even midnight; Toys R Us stores opened at 10 p.m. Thanksgiving night. It is an ongoing pursuit for stores to commence the shopping festivities and grab customers before they can go elsewhere.

Locally, customers waited in line for deals at Walmart, Kohl's and Target, among other stores. In an encouraging sign for retailers and for the economy, more shoppers appeared to be buying for themselves than last year, when such indulgences were limited.

Retailers have figured out that incentivizing customers with Black Friday deals drives sales. What an idea. In the broader economy, the same type of incentives might work: Do you think lowering business tax rates in California to attract new employers or encourage expansion, or cutting federal income tax rates, would work similarly? We think so.

Whether or not you braved the crowds, Black Friday should serve as a reminder that incentives and competition are consequential and important to economic prosperity.