Here’s a letter to Vox:
According to Matthew Yglesias, Sen. Elizabeth Warren’s bill to fundamentally restructure corporate governance in the United States “would redistribute trillions of dollars from rich executives and shareholders to the middle class – without costing a dime” (“Elizabeth Warren has a plan to save capitalism,” August 15).
Without costing a dime?? Clearly not. Even according to Mr. Yglesias, it would cost tems of trillions of dimes – namely, that wealth that Mr. Yglesias believes will be transferred from rich executives and shareholders to the middle class. One can loudly applaud this scheme to transfer wealth or one can sorely lament it, but either way it obviously imposes costs on some people. The fact that these costs of Ms. Warren’s scheme won’t show up in a line-item on Uncle Sam’s budget – which is the non-phenomenon to which Mr. Yglesias refers – does not mean that her scheme is therefore costless.
Whenever the government commands you to do that which you otherwise would not do, it imposes on you a cost, regardless of the merits or demerits of the command. And this cost neither disappears nor is rendered less real simply because the specific manner in which it is imposed results in it not appearing as a debit entry on the accounting artifact that we call the U.S. government’s budget.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030