“There’s No Such Thing as a Free Lunch.” / Milton Friedman, 1977
Myth: The government can give things or money away without any consequences.
Fact: The government produces nothing. Anything the government has, it first has to take from someone else.
Overview:
The above “quote” is the title of a book by Milton Friedman, a Nobel Prize-winning economist. The saying has been around for over 100 years, from a time when taverns and saloons offered “free lunches” to entice patrons into their establishments. Of course, patrons had to order drinks to get their “free” lunch; the price of the drink(s) covered the cost of both the drink and the lunch.
More/Less
Nothing produced by people can ever really be free, as people must be compensated for their time. Individuals may choose to donate their time, as all parents do in the raising of their children, and as many do who participate in charitable endeavors. Those are free choices. It’s highly unlikely, however, that anyone will provide free labor to someone who is charging a price for a product. It’s not only the cost of the labor that must be considered, but also the cost of the materials that are needed to produce the final product.
In a free market (commonly referred to as “capitalism”*), individuals and companies produce products and offer them for sale to the public at a price that covers their costs. Customers may or may not want to purchase the product at the price offered. If not enough customers buy the product, the company will either go out of business or find a way to reduce its costs so it can lower its prices. Bottom line, it must make enough money to stay in business
In a free market, people can also offer their time/skills (think of time and skills as products owned by a person) to employers who agree to pay a mutually agreed-upon wage. Either party can decide to re-negotiate their agreement at any time; if they cannot agree on the new terms, the relationship is dissolved. The beauty of the free market is that all players make their own choices. More/Less...
That is the crux of the free market: free choices by all players. When any player in the system loses free choice, it is no longer a free market system; it is something else entirely. Any time there is an element of coercion (you must buy health insurance, you must buy an electric vehicle, you must take a vaccine, etc.), there is no free market. When that happens, the duty of an upright citizen is to demand answers, first and foremost being Who benefits?
Likewise, the upright citizen understands that when something is provided by the government, it is not free! The government produces nothing. Anything that the government has, it first had to take from someone else.
The upright citizen also understands that those with power (lawmakers, executives, bureaucrats, judges, etc.) are particularly susceptible to corruption. The free market stands no chance against the manipulations of the rich and powerful.
* Markets that have partial or total elements of coercion are referred to as “socialist,” “fascist,” or “communist.” Socialist economies use the power of government to redistribute income and control business activity. Fascist economies are basically socialist, with a focus on nationalist, state-directed control of business and the economy. Communist governments have total control over all economic activity; there is no private ownership of anything. These terms are often confused, as they all involve the power of the government to dictate what people and businesses must do, as well as what they are not allowed to do.
Call to Action:
Learn about how the free market works (see I, Pencil: The Movie in the links below) to understand why centrally planned (socialist/communist) economies always fail.
Learn more about how government policies affect the economic well-being of citizens and businesses (see sub-topics, links, and other references below)
Understand how candidates for office (local, state, and national) view the role of government in the economy, and whether their promises are consistent with free markets
Additional links:
The market at work: I, Pencil: The Movie
The Free Market can solve America’s Energy Needs
Only the Free Market can solve Coronavirus
Venezuelan Migrant to American Socialists: Go to a Socialist Country and see it for Yourselves
Hoover and the Great Depression
What’s Wrong with Government-Run Healthcare
The Myths of Economic Inequality
Discrimination and Disparities
Additional reading:
The Law, Frederic Bastiat
Capitalism and Freedom, Milton Friedman
Free to Choose, Milton Friedman
The Road to Serfdom, Friedrich August von Hayek
Basic Economics, Thomas Sowell
A Conflict of Visions, Thomas Sowell
Capitalism, Socialism, and Democracy, Joseph Schumpeter
Race and Economics: How Much Can Be Blamed on Discrimination? Walter Williams
Liberty Versus the Tyranny of Socialism: Controversial Essays, Walter Williams
More Liberty Means Less Government: Our Founders Knew This Well, Walter Williams