More on Burdens

by Don Boudreaux on June 20, 2015

in Economics, War

In response to this post on economic burdens, a valued Cafe patron e-mailed me to ask (and here I summarize) who bears the burden of, say, soldiering if a soldier volunteers his service free of charge to taxpayers.  The problem is this one: clearly, the solider gets from his or her patriotic action enough psychic satisfaction to fully compensate him or her for the burden that he or she choose to take on, so the soldier is compensated, but no one else pays this soldier.  So is the soldier’s services ones that create no burden – that have no cost?

The answer is no.

Here’s my slightly modified response to that valued Cafe patron:

Soldier Smith who patriotically volunteers for military work and who refuses any pay for this work does indeed bear the burden.  It’s true that Smith’s psychic rewards fully compensate him for the cost that he chooses to bear in this case.  But Smith nevertheless economically bears an economic burden as a consequence of his decision to soldier for free (that is, free of charge to anyone else).  In this case the economic burden of Smith’s soldiering hasn’t been economically lifted onto someone else via any economic exchange.  The same conclusion would hold if Smith, rather than choosing to volunteer actually to work in the military, instead volunteered to pay double his tax bill: he does so because he gets adequate psychic benefit from doing so.  But we can – and should – still say that he is bearing double the economic burden.

Think of a consumer.  I just bought a (super-delicious!) bowl of sweet cherries at a farmers’ market for $5.00.  I did so because the subjective utility of that bowl of cherries is worth more to me than is the subjective utility of whatever it is that I would have otherwise spent that $5.00 on.  I am no loser because of this exchange; quite the opposite.  Yet you would nevertheless say – and correctly so – that the burden of paying for these cherries falls on me (rather than on the cherry grower or on anyone else).  Had I, instead, pleaded poverty to my neighbor in order to successfully entice him to buy the cherries for me, the burden of buying these cherries would have fallen on my neighbor, despite the fact that the psychic reward that he gets from extending charity to me fully compensates him for the $5.00 cost he choose to bear by extending this charity to me.  Likewise if I had pleaded successfully with the cherry grower to give to me the bowl of cherries: while that seller would be compensated for his cost by the sense of goodness he experiences because of his act of generosity toward me, he would nevertheless still bear the economic burden of enabling me to consume this bowl of cherries.

That someone chooses to bear an economic burden that he or she otherwise is not obliged to bear doesn’t mean that there is no economic burden or that the economic burden is eliminated.  And that an economic burden isn’t eliminated – it must fall on someone(s) – doesn’t mean that the psychic benefits of bearing that burden aren’t real and greater than the burden itself.

Among the excellent features of free, private-property markets is the fact that they prevent those who ultimately consume goods and services X, Y, & Z from forcing other people to bear the burden of this consumption.  Free markets impose (“internalize,” in econ-jargon) the costs of ultimate consumption upon those who do the consuming – no matter how grueling, unpleasant, challenging, dirty, or dangerous are the tasks that are endured by producers whose actions contribute to the production of X,Y, & Z.  The only exception to this feature of free, private-property markets is when some non-consumer of X, Y, or Z chooses to bear the burden of someone else’s consumption – as when, for example, a parent pays the full tuition for her child’s college education; when one person chooses to extend charity to someone else; or when a young man or woman volunteers, out of a sense of patriotism, to supply his or her labor to the military at a wage lower than he or she could command in a similar occupation.

Of course, when the rules of free, private-property markets are violated, the burden of supplying some good or service can be forcibly imposed (“externalized,” in econ-jargon) on others – as when a young man or woman is conscripted to perform military labor.  In such a case, the conscript, rather than citizens-taxpayers, bears the burden of his or her work in the military.  In such a case, the conscripts’ labor and time are stolen – literally thieved – from him or her by government.  Citizens/taxpayers/government officials free ride on this conscript’s property and efforts no less than does a house burglar free ride on the property and efforts of his victims.

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