If you take the reasoning of Socialist Democrats to its logical extreme, then everything should be free.
When I was a kid - like 6 years old - I looked up to my older brothers as being wiser and smarter than I was - that is, before marijuana took its toll on them. I remember one day my brother and I discussing communism, which I had never heard of. My brother, not being much older than I, said it was a system where everything would be free to everyone, and you wouldn't have to pay for things. This is, of course, an overstatement of the case - even communist countries have currencies and prices, although prices are dictated by a powerful central committee.
At first, I thought this was swell, because at that early age, I was indeed engaged in commerce. I had a small amount of money from birthday checks, or doing chores around the house, or pilfering from my Mother's change purse. We would ride our Sting-Rays (usually in a pack of 3-5 boys) to the candy store in town (back then, young kids were let to roam wild and free - something helicopter parents today would be aghast at) and use this small change to buy candy.
Candy back then was weird. They had one kind, which was cash register tape with little sugar dots on it. You ended up eating parts of the paper, which no doubt had dioxin in it. Or they had something called "pixie sticks" which was a plastic tube (suitable for choking whales) loaded with a mixture of sugar, coloring, and citric acid. Anyway, we would peruse the candy aisle forever, deciding what the best outcome would be for the 25 to 75 cents we had in our pockets. And always, we wanted more than what our money could buy. We learned about scarcity at this early age with these primitive economic transactions.
Actually, it would have been interesting to be an economist or anthropologist and study these young boys and their economic transactions. Even at that early age, I suspect our economic choices would be fascinating. Despite our limited means, we always managed to leave the candy store with an assortment of different products, optimizing our outcome with our limited means.
But suppose it was all free? When I heard this, at age 6, I was ready to sign up for communism! Free candy - just take anything you wanted! It sounded too good to be true, and of course, was. As my wiser older brother (age 9) pointed out, the first kids who got there would stuff their pockets with candy and by the time we got there, nothing would be left but empty store shelves, which of course, accurately describes shopping in any communist country back in the day, or even today.
We were too young to see the other side of the coin as well - that with no incentive or profit (which is a dirty word and donchuforgetit!) the candy store man would stop selling candy, and the candy company would stop making it. Rather than be presented with aisles of candy - a cornucopia of color and flavor - we would find nothing, or perhaps only government-sanctioned bland-flavored gummies.
The point is, even at the tender age of six, I could see that making everything "free" wasn't the answer. Even setting prices artificially low wasn't the answer, either - it was hardly better than making everything free. Regardless of how "unfair" the money system was - not allowing me to buy all the candy I wanted - it was better than no candy at all.
A reader writes that my posting on rent control was head-up-my-ass. This is always a possibility, but his contrary argument was that he doesn't have the housing to which he believes he is entitled to, and thus we might as well enact rent control, so he can have a nicer place to live. "It's worth a try" he argues, given the nature of the housing "crisis." Of course, he fails to realize this has already been tried and shown not to work.
Not having a de-luxe crib is not a "crisis" of course, and there are people in this world facing real deprivation. In Somalia for example. Having to share an apartment in silicon valley is hardly rises to the level of crucifixion. And it is more than likely a transitory experience as well. I left my cockroach-infested apartment after two years and bought a house. It wasn't easy - it never is, in a big city, when you have to bid against other buyers. But in four years, well, the bidding stopped, and I was fortunate to snap up some properties for cheap. Of course, the house I bought before was worth less than what I paid for it - for many years. But that illustrates why buying a house in a heated market makes no sense - nor does paying top dollar for rent.
But why not make everything free? After all, the Socialist Democrats promise to make college free, and healthcare free, and even money free - why not just cut to the chase and abolish prices, abolish currency, and abolish scarcity?
Well, the reason is, economics are not some system that is impressed upon us by the government, but the way human beings interact by default. If you take away capitalism, you take away money, it won't change a thing - people will just resort to bartering, much as they did in postwar Germany - or indeed, in Venezuela today.
Money is an invention of mankind, and the most useful and greatest of all. It takes bartering and allows us to quantify it, and thus enhance trade by exchanging promises of goods and services for actual goods and services. Rather than having to trade chickens for goats, you can trade the promise of a chicken, as represented by money, for a goat. Or whatever. And moreover, money allows you to time-shift purchases, creating derivatives such as loans, financing, and investment. It is not a bad system, and considering that nearly every civilization on earth developed some sort of money-based economy, it also seems to be a default mode of operation of mankind.
So if you make things free, well, what happens? Well, people would take free things and then resell them on the "black market" which is, as I noted before, just the market. Whether they barter them for things or use some alternative form of currency (such as cigarettes, in prisons) it doesn't matter. You can't suppress markets, no matter how hard you try.
But what about healthcare? What about college? These are not things you can re-sell in the marketplace, and they arguably are things that provide people with basic human dignity and equalize opportunities. And those are good arguments, too. In many parts of the world, health care is free, or at a very reduced cost. In some countries, college is free (as high school is here) or at a reduced cost. How does that work out?
In a way, interesting. Our Canadian friends love to regale us with stories about how great their healthcare system is, and how they had some major operation and they never received a bill for it. Even the idea of getting a bill from a hospital is alien to them. And that's a pretty good deal. On the other hand, Canadians - often the same people - will regale me with how crappy their healthcare system is. Perhaps that's just the normal bitching people have about anything, or anything involving the government, or perhaps when something is free, they don't value it as much as they should.
But when healthcare is free, well, scarcity doesn't evaporate overnight. And in a system where treatment is free, but the supply of treatment is finite, you have to triage treatment, which may mean you have to turn away some folks from some treatments. It happens here in the USA, too. A friend of mine, when he lived in Atlanta, was told he was too far down the list to receive a liver transplant, and that he better plan his funeral arrangements. He moved to the coast of Georgia, and got a new liver within a year. Thank God for clueless young men and motorcycle dealers.
And that's the deal right there. Medical care isn't like other commodities in the marketplace, in that you'd pay anything to stay alive, even for a minute longer, rather than die. You might decide a new car is too expensive, but a new liver, on the other hand, is priceless. So you are told that it will cost a million dollars for you to live another five years. This would spend every last penny you have and bankrupt you. But then again, in five years, you'll be dead, anyway. Which do you do? Spend the money and live on Social Security for five years and then die, or die today and leave a million bucks to your next-of-kin?
Seems like a silly question, but it is one I think about a lot. A major health crisis could bankrupt me, if the insurance company doesn't cover the treatment, or if Obamacare is abolished and I am forced to go on a useless "Trumpcare" policy or no policy at all. Shit. I'd better vote for Bernie!
But there are people who abuse the healthcare system - going to the doctor for every imagined illness. And once you hit 65 and medicare pays, it is amazing how, in one year, you suddenly need all sorts of procedures, tests, and specialists. Remember, I live on old people island, and I see this firsthand. We spend most of our healthcare dollars on the last few years of life, and in fact, about half on the last few weeks.
And I am told, that in countries with "free" healthcare, they are a little more proactive in turning away hypochondriacs or mothers with Munchhausen's syndrome by proxy. And when you reach a certain age, they are more proactive in saying, "hey, you aren't going to live much longer, anyway, you really don't need knee replacement surgery!" And that can be a good thing. Another friend of mine (I have a lot of old friends) recently passed away when his doctor recommend knee replacement surgery when he was well into his 80's. He fell and the whole thing tore out, and they had to fuse his legs and things went downhill from there rather quickly. Stay out of hospitals, they will kill you. If it isn't the murdering nurse injecting you with some overdose (which happens more often than you think) it is the doctor who doesn't wash his hands after using the restroom (which also happens far more often than you think). Mark's Dad died after a "routine" procedure in a rural hospital. Post-operative infection kills more people than you can imagine.
Republicans call triage "death panels" and argued that free healthcare would result in people being left to die, because of scarcity of health services. But of course, this happens today, already, with our current system, where people who cannot afford to pay often are left to their own devices or even denied care. Another friend of mine, who had tongue cancer at age 35, was told to bring $20,000 to the hospital or not bother showing up for chemo. He fortunately found treatment elsewhere and is alive and well today. Pretty scary system.
Medical care and capitalism do have their conflicts, but I am not sure making medical care "free" is entirely the answer. Some sort of real co-pay (and by that, I don't mean a measly twenty bucks) should be required to filter out the hypochondriacs from the really sick. One reason why healthcare in America is so staggeringly expensive is that we tell the industry (one of, if not the largest industries in the country) to charge whatever they want to, and send Uncle Sam the bill. If you've ever had to deal with an insurance company or a hospital billing system, you know how horribly inefficient and outdated they are - if GM worked this way, they would have gone bankrupt decades ago. The medical industry is inefficient because it doesn't have to be efficient. Just raise rates and bill the insurance company or medicare or your patients.
And college suffers from the same problem. Yes, it isn't "fair" that some rich kid gets into Harvard and then makes all sorts of business connections there and ends up a Wall Street whiz-kid and makes a million bucks a year. You can offer scholarships to the disadvantaged (and Harvard does) but I suspect the types of social connections that are made are not offered to such students. You might get a "full boat" ride to Harvard or Yale, but it doesn't mean you are going to be inducted into the Porcellian Club or tapped for Skull and Bones.
Again, my friends from overseas regale me with how great free college is. One friend of mine, from the UK, went to college and got an "ordinary degree" in Physics. He is a nice fellow and all, but not a Physicist by any means, although he did a dissertation on how many pint glasses he could stack up in a pyramid at the local pub - which does involve a visceral understanding of Static and Dynamics, I guess, as well as coefficients of friction. I didn't realize, until he told me, that an "ordinary degree" meant only that he showed up for four years and not that he learned anything. It was as useless a degree as B.A. in English, anthropology, or art history.
When college is free it becomes the new high school - a place to park hormonal teenagers for a few years, and keep them out of the job market. And some economists argue that this is a useful function of college, to keep the labor force smaller and thus increase wages. Others argue that with our robot economy (droning soon to a doorstep near you!) parking kids in college is a good way of keeping them out of the workforce for a few years.
Still others argue that according to statistics, you make more money if you go to college, and ergo, if everyone went to college, everyone would make more money. The people making those arguments, of course, failed courses in statistics in college. Not every man can be a King.
But it is true that colleges and universities have raised tuition by two to three times the rate of inflation, for well over a decade now. When I was in law school - nearly thirty years ago - this trend was starting even then. As it turns out, the high cost of college and the high cost of healthcare are related. Both rely on "funny money" to get by, where no individual consumer is paying the price, at least not right away. They have bloated overhead, with so many deans, assistant deans, and assistants to the assistant dean (but oddly enough, fewer tenured professors) that costs are spiraling out of control.
And like with hospitals, they just raise prices and pass the costs on. Students who are paying with grant and loan money (and are too young to appreciate the onerous debts they are taking on) don't protest these price increases. So the college gets more bloated and charges more and more and like with healthcare, no one asks why these costs are going up so rapidly, but instead argues that the solution is to make everything free. Actually, this ties into the cost of housing - no one is asking why houses are so expensive, whether we are in yet another housing bubble, or whether government housing regulations are hurting more than helping. We just raise prices and pass the cost on to the consumer because hey, you aren't going to go without a liver, a job, or a place to live, right?
Oddly enough, though many smaller colleges are going bankrupt. I predicted this a decade ago - although I don't think half of all colleges will go bankrupt as some argue. Small liberal arts colleges have some of the highest overhead, offer the least bang-for-the-buck (a liberal arts degree from a small college is least likely to lead to a high-paying job), and offer the least amount of variety in their coursework, due to their small size. Student-consumers, if they are going to pay top dollar for an education, want the best return on their investment, and a "name brand" diploma from a big university is going to get them that job interview. It isn't too much different than a 6-year-old spending pocket change at the candy store.
Even with staggering tuition increases, some colleges are losing money - the indebted graduates are in no position to donate to their Alma Mater or endow the school with millions for a new building. Again, some would argue government intervention might be the answer. Make college "free" and tell the schools to send the bill to Uncle Sugar. Solves all those problems at once! Problem is, this provides no incentive whatsoever to keep costs in check, and the bill being sent to the government will be staggering. And as you might imagine, many "for profit" colleges think this is a swell idea. Bernie Sanders thinks it is a swell idea, as his wife bankrupted a local college in Vermont, when she ran it. That does not bode well.
So what's the point? Well, with commodities like houses, cars, candy and gasoline, trying to set prices or make them free isn't the answer. People would just take free things (or things that were priced below market value) and then re-sell them on the open (black) market. If you doubt this, talk to anyone living in New York City in the 1960's and 1970's when subletting "rent controlled" apartments for a tidy profit was a real thing (and indeed, still goes on today, with landlords employing private detectives to sniff out illegal sublessors and wily tenants going to extremes to conceal them).
Healthcare is somewhat different, but still subject to the basic laws of economics - scarcity being the primary one. If you make healthcare free, many people will abuse the system, with serial visits to the doctor or even surgeon, for ailments real or imagined. There is no easy answer to this problem, and if someone claims there is, they are probably lying. Easy answers to complex problems are often the wrong answers.
College is a little easier to parse. Today, there are many opportunities for people from all walks of life to attend college, if they want it badly enough, which indeed, is the way it should be. I spent 14 years in night school, and the resulting education was far superior that the seven years I would have spent going "full time". When going to college involves making sacrifices, you tend to value it more. I sat in the front row, asked questions, and buttonholed professors who I thought were "phoning it in." I wanted value for my dollar, dammit!
Other students, whose parents were paying, tended not to be so critical. College was a party - four years of drinking and smoking pot and maybe a little nooky - which I sort of viewed it as, when I was 18, too. Making college free? Well, OK, but only if you let me go back to school at age 60 and get as many degrees as I want. Just kidding, of course.
Our economic system isn't "fair" of course. There will always be the exploiters and the exploited. But our system is better than any other devised so far, as evidenced by the fact that people are literally dying to get here, and few are leaving of their own volition. Yea, there are a few "ex-pats" out there, living like Kings in third-world countries on their retirement savings, but most working-age people know a good thing when they see it, and America is still the greatest land of opportunity there is.
Opportunity, of course, means you have the ability to work to get ahead and not just have free shit land in your lap. If you want that, move to Venezuela and tell me how that works out.
