August
11, 2004
Walter
Williams
Economics 101
http://www.NewsAndOpinion.com
| Economic
ignorance allows us to fall easy prey to political charlatans and demagogues,
so how about a little Economics 101?
How many times have we heard "free tuition," "free health
care," and free you-name-it? If a particular good or service is truly
free, we can have as much of it as we want without the sacrifice of other goods
or services. Take a "free" library; is it really free? The answer is
no. Had the library not been built, that $50 million could have purchased
something else. That something else sacrificed is the cost of the library.
While users of the library might pay a zero price, zero price and free are not
one and the same. So when politicians talk about providing something free, ask
them to identify the beneficent Santa Claus or tooth fairy.
It's popular to condemn greed, but it's greed that gets wonderful things done.
When I say greed, I don't mean stealing, fraud, misrepresentation or other
forms of dishonesty. I mean people trying to get as much as they can for
themselves. We don't give second thought to the many wonderful things others do
for us. Detroit assembly-line workers get up at the crack of dawn to produce
the car that you enjoy. Farm workers toil in the blazing sun gathering grapes
for our wine. Snowplow drivers brave blizzards just so we can have access to
our roads. Do you think these people make these personal sacrifices because
they care about us? My bet is that they don't give a hoot. Instead, they along
with their bosses do these wonderful things for us because they want more for
themselves.
People in the education and political establishments pretend they're not
motivated by such "callous" motives as greed and profits. These
people "care" about us, but from which areas of our lives do we
derive the greatest pleasures and have the fewest complaints, and from which
areas do we have the greatest headaches and complaints? We tend to have a high
satisfaction level with goods and services like computers, cell phones, movies,
clothing and supermarkets. These are areas where the motivations are greed and
profits. Our greatest dissatisfaction is in areas of caring and no profit
motive such as public education, postal services and politics. Give me greed
and profits, and you can keep the caring.
How about the idea that if it saves just one life it's worth it? That's some of
the stated justification for government mandates for childproof medicine
bottles, gun locks, bike helmets and all sorts of warning labels. No doubt
there's a benefit to these government mandates, but if we only look at
benefits, we'll do darn near anything because there's always a benefit to any
action.
For example, why not have a congressionally mandated 5 miles per hour highway
speed limit? According to the U.S. Department of Transportation, there were 43,220
highway fatalities in 2003, with an estimated cost of $230 billion. A 5 mph
speed limit would have spared our nation this loss of life and billions of
dollars. You say, "Williams, that's preposterous!" You're right. Most
people would agree that a 5 mph speed limit is stupid, impractical and insane.
That's one way of putting it, but what they really mean is: The benefit of
saving 43,220 highway deaths and the $230 billion that would result from
mandating a 5 mph speed limit isn't worth all the inconvenience, delays and
misery.
Admittedly, the 5 mph speed limit is an extreme example, a reductio ad
absurdum. Nonetheless, it illustrates the principle that our actions shouldn't
be guided by benefits only; we should also ask about costs. Again, when
politicians come to us pretending they're Santa Clauses or tooth fairies
delivering benefits only, we should ask what's the cost, who's going to pay and
why.