Thomas Sowell on the Value of Consumer Choice
One of Thomas Sowell’s greatest insights is that in public policy, there are no solutions, only trade-offs. That extends to deciding what to spend money on, even when some purchases that are foregone might be perceived as valuable.
However, that value on which the purchasing decision is made is entirely relative to the other options at hand. In his most recent column, Sowell explains that point nicely:
Under a headline that said, “Obama May Find Useless Regulations Are Scarcer Than Thought,” the [New York] Times writers declared that there were few, if any, “useless” regulations. But is that the relevant criterion?
Is there any individual or business willing to spend money on everything that is not absolutely useless? There are thousands of useful things out there that any given individual or business would not spend their money on.
When I had young children, I often thought it would be useful to have a set of the Encyclopedia Britannica for them. But I never bought one.
Why? Because there were other little things to spend money on, like food, clothing and shelter.
By the time I could afford to buy a set of the Encyclopedia Britannica, the kids were grown and gone. But at no time did I consider the Encyclopedia Britannica “useless.”
Weighing benefits against costs is the way most people make decisions — and the way most businesses make decisions, if they want to stay in business. Only in government is any benefit, however small, considered to be worth any cost, however large.
Worse, when large costs go to pay for small benefits, the result is a net loss. Government, by operating independently of the market, has nothing against which to compare the relative value of the things it spends money on. Explained that way, it’s not hard to see why costly government “stimulus” spending doesn’t work.
“You can’t always get what you want” may not be the most pleasant thought, but much more unpleasant is the harm that can result from trying to ignore it.