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There is always rationing

There is not an infinite amount of anything.

That simple truth seems to be too complicated for some to understand. Look around: shoes, hamburgers, cars, electricity, Internet access, TV shows, medical care, money, oxygen, planetary nebulea. If you can think of it -- consumer good, raw material, labor, whatever -- then you should be able to see the truth in the fact that there is only so much of it to go around. It may be in abundance or it may be rare but there is no way of getting around the fact that, if we consume it, we have to ration it.

So if someone makes the statement, "There will be no rationing," he is lying. Everything must be rationed.

The question is not if something will be rationed, but how it will be rationed and who will be controlling the process. In a free market, most rationing is done in a sensible manner. Most people can readily understand that the parts of the cow that are turned into steak is a lot less than the parts that are turned into ground beef. When the butcher charges more for steak than hamburger, he is giving us, the meat-buying consumers, information we need to properly ration the amount of steak we eat. We will still eat steak occasionally -- we make purchasing decisions based on more than just price -- but we limit ourselves because price is an important consideration. But while the cost of hamburger is less than the cost of steak, it still has a cost so we also ration the amount of hamburger we eat, opting to substitute pork, chicken, fish, ham, or enjoying an occasional "veggie nite."

Imagine what would happen if a government program declared that chicken would be free or sold for a rediculously low , at most, 10 cents a pound. For a while, we would be living in Kentucky Fried Paradise. When we passed the chicken counter at the supermarket, we could pick out our the chicken we used to buy every week and be comfortable in the knowledge that it would cost little or nothing. But would we only get as much chicken as we used to? Well, let's see. Steak, hamburger, ham, pork and fish all cost the same as they did before, so I think it is pretty safe to say that a good many of us would start eating more chicken than any of those other substitutes. In fact, a good many of us would decide that we should really be eating chicken exclusively. In more fact, many of us would fill our cart with chicken. Why not? We could freeze some, refrigerate some more and if some of it went bad, so what? We could just run down and pick up another shopping cart full.

How long do you think it would take before we go to the supermarket and find the chicken counter completely empty? If a good many shoppers walk out of the supermarket with as much chicken as they can carry, the store is going to run out. Shoppers will quickly learn what day the chicken truck makes its delivery and will be at the store early. Many of those first shoppers will now leave with two carts of chicken. Never mind that they cannot possibly eat that much in a week. So what if they have to throw most of it away? It's free -- so grab as much as you can whenever you can. We would be foolish not to.

Needless to say, this would not be allowed to continue for very long. The government would be forced to institute some method of rationing. This would upset a good many people who would claim that chicken should not be rationed -- chicken is too important, it is a staple of the American diet, poor people will starve! Some small-government groups will claim that this is all the government's fault, that chicken wasn't rationed before the new program was started.

They will be partly correct. The necessity for the new rationing method would be the fault of the government, but chicken was always rationed. It's just that before the Chicken Reform Act was passed into law, rationing took place according to effective, rational market forces. We rationed ourselves and we did so by deciding how much chicken at the prevailing price we could afford. Reducing the price to zero did not create a need for rationing -- it created a need for a different method of rationing because it short circuited the existing one.

Let's say that there were a lot of people who complained about the market method of rationing. Their complaint was that, although chicken was readily available, there were many people too poor to afford it. Thus the market method of rationing by price meant that some people ended up with very little chicken or no chicken at all. That, the argument went, is just Not Fair.

Now chicken is free but explicitly rationed. No matter what form of chicken rationing the government implements, there are only two possible outcomes: it will be arbitrary or it will be corrupt -- meaning that people will be able to pay to bypass the system. If it is corrupt, then nothing has changed -- the poor cannot afford to bribe the Chicken Distribution Counsel so will again end up with little or no chicken. If the system is honest but arbitrary, then the situation will be about the same, surprisingly enough.

Let's say that chicken is distributed strictly by lottery, so a poor man has just as much chance of getting an allotment of chicken as a rich man. And a rich man may loose the lottery just as often as a rich man. But if the rich man can't get his chicken through the normal rationing process, he will offer to buy chicken from someone who did win the lottery that week. Another rich man would not be interested -- he wants his chicken more than he wants a little more money. A poor man, however, has an incentive to sell his chicken -- he's poor, so he needs the money more than the chicken. So the poor, again, end up with little or no chicken. Don't even try to argue there would not be a black market in chicken. When studying history, there are very few times where we can use such words as "never" or "always." When governments institute rationing, there is always a black market for the rationed good. No exceptions.

No matter how much compassionate, well-intentioned people try to help the poor, the poor always end up with less. That is pretty much the definition of poor. Government instituted programs intended to help the poor fail to get more stuff into the hands of the poor and end up hurting everyone else.

Always.

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