The Opportunity Costs of “Free”

by Loyd S. Pettegrew
Mises.org

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.

Resources are scarce and something can only be free if there is no opportunity to have or do anything else (Lee, 1999). When a poor person decides to have children and take welfare, this person narrows or even eliminates his/her opportunity to do something more productive like working, improving him/herself, getting away from the despair and dependence that comes with the government running his/her life.

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