In 1855, Ralph Waldo Emerson captured the spirit of his era when he wrote that “If a man has good corn, or wood, or pigs to sell, or can make better chairs or knives, crucibles or church organs, than anybody else, you will find a broad hard-beaten path to his house, though it be in the woods.”

How much does this upbeat assertion apply to the world we inhabit today?  Consider the following hypothetical situation, which takes place in an aisle of your local supermarket:

Imagine that you’re shopping for toothpaste.  At the far end of the display rack, beyond all the Crest, Colgate, Sensodyne, Aquafresh, and so forth, are a few tubes of a product called “Genie Miracle Mol-R-Scrub.”  It is produced by the Big M Chemical Works of Erie, Pennsylvania.  Its main active ingredient is listed as “flatucylic aldehyde.”The price is 79 cents per tube.

Its image certainly isn’t appealing.  The product name sounds small-time and old-fashioned;  and whatever the active ingredient “flatucylic aldehyde” might be, it sounds more appropriate for cleaning barbecue grills or birdcages than teeth.  Also, the Great Lakes Chemical Works is a company we’ve never heard of, and it doesn’t seem like the sort of business we’d be comfortable buying health care products from.  Finally, the extremely low price is more of a turn-off than an inducement to buy.

What if the toothpaste is a new product developed by a husband-and-wife team, one of whom is a dental hygienist, and the other, a small-time distributor of industrial chemicals?  What if they realized that together, they could formulate essentially the same thing that dentists use to clean teeth, only mild enough for daily use, and at a price far below those of name-brand toothpastes?

The name of the product would certainly fit these circumstances.  (Check some late-night TV commercials for the names small companies typically select for their wares.)  Likewise, the name of the active ingredient, “flatucylic aldehyde,” although off-putting, could well be its proper chemical description.  What are the odds a small company would be able to recognize and defuse the nomenclature problem by devising a more scientific-sounding trade name for the chemical?  Is a mom-and-pop operation likely to come up with something as sophisticated as Retsyn—the trade name by which the manufacturers of Certs breath mints refer to their “active ingredient” (otherwise known as vegetable oil)?

As for the price, it’s only to be expected that a small startup company would charge less than a giant like Procter & Gamble.  With the exception of “boutique” products, new companies have almost always charged less than established ones.  How else could they hope to gain niches among the giants?

But in our hypothetical example, price, the most empirically “hard” factor in the marketplace equation (and historically, the main lever by which newer, more efficient businesses have been able to displace greedy or inefficient established ones) has become softened, to the point where it’s just one more aspect of a nebulous product “image”—and can become more of a disincentive to buy the lower it gets.  This is a serious economic anomaly.

Consider the product we’re dealing with.  Exactly what is toothpaste?  Aside from stannous fluoride, what’s it made of?  Is it essentially based on soap? Pumice?  Completely synthetic materials?  What?

If we knew enough about toothpaste to tell a good tube from a bad one, our marketplace anomaly would disappear.  But the unfortunate fact is that we don’t know much about toothpaste.  And it isn’t exactly an exotic, high-tech product.  It’s a common medicine-cabinet staple that’s been with us for more than a century.  Nor is it just an unusual “fluke” product.