The Opportunity Costs of “Free”

P.J. O’Rourke once quipped, “If you think health care is expensive now, wait until you see what it costs when it’s free.” The truth behind O’Rourke’s humor is the opportunity cost of “political free.”

Even relatively bright people who have never studied economics realize that behind the government’s redistribution of wealth are huge opportunity costs both for citizens who actually pay for the government’s giveaways and for the people who receive them.

Never has a political song over four decades old applied so well to contemporary events as the song “Monster” recorded in 1969 by the rock group Steppenwolf, best known for its anthemic hard rock masterpiece “Born to Be Wild.” The lyrics are printed below and a YouTube video that vividly illustrates their application to our current situation is here (be sure not to miss the visual references to the Fed and the fiat dollar).

At the Rafael del Pino Foundation’s Master Lecture Series in Madrid, Spain, on June 20, 2013.

You be the judge. Here are some quotations from Hayek’s most famous book:

“We have progressively abandoned that freedom in economic affairs without which personal and political freedom has never existed in the past” (p. 67).

“[I]ndividualism [means] respect for the individual man qua man, that is, the recognition of his own views and tastes as supreme in his own sphere . . .” (p. 68).

Shawn Ritenour, author of Foundations of Economics, channels Mises to dispute the “sad narratives of the financial meltdown of 2008 and its aftermath .. that it was and remains the result of unbridled capitalism.

[From Reflections on America, 1984: An Orwell Symposium. Ed. Robert Mulvihill. Athens and London, University of Georgia Press, 1986.]

In “The Intellectuals and Socialism,” 1 Nobel laureate F.A Hayek shows how ideas gain acceptance in modern society. More importantly, he shows how to win the battle of ideas against supporters of big government. His thoughts provide us with an Independence Day meditation.

Joseph Salerno appeared on Russia Today’s TV show Prime Interest to discuss money, the Fed and the future economic crisis. He comes on at about the 3 minute mark. Link to show