#123 – The Price of “Free”

Why the Government Cannot Escape Economic Reality to Provide Your Needs.

“Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.”

— William Pitt The Younger

The default condition of humanity is poverty, not wealth. What many people now consider as “basic human needs” were, at best, luxuries as recently as 200 years ago. Decent housing, vaccines that protect against disease, medicines that cure sickness, books for a good education—generations of humans died without having ever conceived of the possibility of these things.

Take the Black Death, for example. This devastating pandemic, which swept through Europe in the 14th century, killed millions of people at a time when the concepts of vaccines and effective medicines were nonexistent. People of that era could hardly imagine the possibility of medical interventions that could prevent or cure diseases, much less consider them basic needs.

As much as anyone might wish otherwise, one cannot escape economic scarcity. There are always trade-offs. To call something a “need” suggests it is infinitely valuable. However, there always comes a point at which the further expenditure of time and resources spent consuming any good or service exceeds the value of the improvement or benefit it provides. Where that point occurs depends on the subjective valuation of the person choosing to or refraining from buying the good or service at a specific price.

Consider Bob at the supermarket, facing the meat aisle with a tight budget. He loves beef for its taste and nutritional value, making it a regular part of his shopping list. However, due to inflation, the price of beef has surged significantly, prompting him to reconsider his options. Because of the additional cost, Bob reevaluates the trade-off: Is the pleasure and nutrition from beef worth the higher price, or could those resources be better spent? Spotting the soy products, a cheaper and versatile protein alternative, Bob decides that the rising cost of beef no longer justifies its value over soy. This choice reflects a personal valuation of goods based on scarcity and the necessity of trade-offs.

Individuals or groups often use the word “needs” as a rhetorical tactic to portray their subjective desires as objective necessities. Anyone with an understanding of basic economics knows that this is merely sophistry. People choose the means by which to attain their “needs” (and to what extent) based on value judgments and the costs of alternative desires (opportunity cost).

Take healthcare, for example. There’s no doubt that medicine contributes to physical survival. So, should it be free for everyone who “needs” it? Some argue that it should. But nothing, even in our modern world of comparative luxury, is truly “free”. When someone says something should be free, they mean it should be paid for by someone else (if only in practice, if not in intent).

In 2022, the National Health Expenditure (NHE) in the United States reached approximately $4.5 trillion, or about $13,493 per person, and accounted for 17.3% of the Gross Domestic Product (GDP). These figures underscore the economic realities behind the healthcare debate. When discussing “free” healthcare, it’s essential to recognize that these costs are absorbed by taxpayers, whether through increased taxes, government borrowing, or reallocating funds from other public services.

Since we don’t live in the Garden of Eden, medicine, like anything else that is scarce, has a cost—a price that has to be paid even if the government labels it “free”. If we think of healthcare as a “need”, we will entertain consuming it at any price, however large, for any improvement in health, however small. Of course, even the government has to deal with economic reality, so they can’t shift all of the economy’s resources to healthcare. 

Notice how vague the term “need” here really is. If we accept the concept of needs (based on the moral premise that “needs must be met”), we also implicitly accept the morality of having decisions concerning those needs made for us by someone else—in our age, that typically means the state. Whenever someone talks about giving someone something they need without earning profits, it is almost always a way of changing things for others without their consent.

“Of all tyrannies a tyranny sincerely exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”

— C.S. Lewis

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