Weekly Opinion Editorial
There is
No Free!
by Steve Fair
Economics
is the science that deals with the production, distribution and consumption of
goods and services. Adam Smith was an 18th-century British philosopher
renowned as the father of modern economics. There are generally four accepted economic
systems. A ‘traditional’ system, which
is generally found in third world countries, often use barter systems of exchange and lack
modern technology . The second system is
a ‘command’ economic system. In the
command system, a large part of the economy is controlled by the
government. The former USSR used the ‘command’
system and it was the core of the communist philosophy. The third system is the ‘market’ economic
system, which is often called capitalism.
In a capitalist system, firms and individuals acts in self-interest how
their resources are allocated, what goods get produced and who buys the
goods. The fourth system is the ‘mixed’
economic system, which is a combination of a market economy and the command
economy. France and India use a mixed
system. One characteristic every system
has is that ‘free does not exist.’
Someone is always paying the bill.
Free doesn’t exist, but many people fail to understand that fundamental
principle. Two points:
First, there is a deficit of the study of economics. Fewer young people are exposed to the most
basic of economic study. In 2014, the American Council of Trustees and
Alumni(ACTA) surveyed 1,098 colleges and found only 3.3% required an economics
class to be granted a degree. That
accounts for why Bernie Sanders can pack out venues with young people promising
‘free stuff,’ which doesn’t exist in any economic system.
Sanders describes himself as a Democrat Socialist. His critics call him a Communist. The
difference is a matter of degrees. Under
Communism, most property and economic resources are owned and controlled by the
government and not individual citizens.
Under Democrat socialism, all citizens share equally in economic
resources as allocated by the government.
In both systems, getting ahead is hard to do.
Second, the free market system is not perfect, but it does reward those
who take risks and work hard. To most
people that is appealing, but to those who want to sponge off others, it isn’t. In a capitalism system, there can be a wide
disparity is the distribution of wealth.
Sanders is right about the wealth disparity in the US widening in recent
years, but that has been caused by government interference into the system, not
the system itself.
In recent years, America has moved closer to the ‘mixed’ economic
system. The Affordable Care Act has the
government controlling healthcare, which is over one sixth of the nation’s
economy. Tax cuts with no cut in spending has resulted in an increasing national debt.
French economic
writer Frederic Bastiat described the difference
between a bad economist and a good one: “the bad economist
confines himself to the visible effect; the
good economist takes into account both the effect that can be seen and those
effects that must be foreseen.”
America’s
economic policy the last 30 years has been reactive, short term, and not
proactive. Government should get out of the
regulation business and allow the free market to work. But always remember-there is no free.
