Friday, August 31, 2012

Devaluing What One Receives for Free

The most obvious rule of social science is that people will abuse any free good. The price of "free" evokes unbounded demand while choking off supply. In the perverse feedback loops of "free," free health care comes to mean hypochondria, illness caused by needless exams and treatments, queues for an ever-expanding portfolio of mediocre services, and ultimately euthanasia under government bureaucracy. Free drugs mean widespread addiction to existing medications and an end to medical innovation. Free money, manifested in the near zero-interest-rate policy of the Federal Reserve, diverts the wealth of savers to favored governments and crony capitalists while creating shortages for everyone else. 

 -George Gilder, a founding fellow of the Discovery Institute in today's WSJ.  (His books, according to the WSJ, include Wealth and Poverty: A New Edition for the Twenty-First Century.)

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