All Commentary
Friday, December 1, 1972

Are You Getting Your Money’s Worth?

Dr. Curtiss is Executive Secretary and Director of Seminars at The Foundation for Economic Education.

In terms of personal income and its purchasing power, one must conclude that Americans never had it so good! With the great strides in technology and the tremendous investment in the tools of production, workers are fantastically productive. And, in a general way, one’s income is based on what one produces, as valued in the market place.

In a free economy, one may exchange his money or property for things or services he values more than the money or property he gives up. Thus, both the buyer and seller benefit from the exchange and each is better off, in his judgment, than before.

But what are you getting for your money today? How much of your spending is for things you’d rather do without if the choice were entirely yours!

One might argue that we always spend our money in the way we choose, given the alternatives. We pay a dentist to relieve a toothache, not because a trip to the beach wouldn’t be more fun but because it is less painful to visit the dentist. If we lived in a dry climate we might avoid the purchase of an umbrella. If we lived near our work we might avoid buying a second car. If we lived in Maine, we might not buy an air conditioner. And so on through many choices like these, where no one else is forcibly influencing our decision.

Even under coercion, we still choose among alternatives. We may give our wallet to an armed robber, under the circumstances. Most of us grudgingly pay our taxes, rather than face the consequences of refusing to pay. But these choices, the alternatives we choose under duress, differ from our purely voluntary spending. And in order to know whether we’ve “ever had it so good,” we ought to consider those expenditures which are forced upon us, for things we’d rather do without.

Crime Costs

An example is the cost of crime. Government is essential for the protection of life and property, and most people will willingly pay to be protected from the few persons who have no respect for the life and property of others. But the mounting incidence of crime in our affluent society calls for further consideration of the costs and possible causes.

How do you feel about the cost of installing a burglar alarm system in your home? Or having near tamper-proof locks put on your outside doors? Or the extra cost of a buzzer to make certain you remove your auto keys? Or the extra cost of taking a taxi because you’re afraid to ride a subway?

These are just a few of the many examples of the rising costs of crime over recent decades. More direct costs, of course, include losses of life and property by persons who are objects of the burglary or perhaps just innocent bystanders. Mounting also are the costs of prevention, detection, and punishment, including the hiring of extra police, additional court costs and the like. Attempts have been made to estimate such costs but who can say, and with what accuracy? What is certain is that the money one is forced to spend either to prevent crime or to repair the damages is money that cannot be spent voluntarily for other things.

No doubt, the people of the United States are among the most productive and affluent in the world. We have a very high level of living in automobiles, color television sets, the quality of food we eat, education, medical services, housing, leisure, travel, and a host of other things.

But our level of living also includes a few items we might change if we could. The costs and consequences of crime are among these items. We can take little comfort in knowing that our crime costs per capita may be the highest in the world! Much of the cost is buried in the total expenditures by governmental units — federal, state and local — the total support of which takes some 40 per cent of our very high productivity. So, we may say that our affluence supports the most costly government in the world. But, if we had our “druthers,” is this the “level of living” we would buy?

Why Crime Increases

Much of the crime, especially in our larger cities, is tied to the increasing use of illegal drugs. The daily cost of supporting a drug habit far exceeds what many a user is able to earn legally. Many addicts thus turn to robbery, prostitution, “pushing” drugs on others, and various sorts of organized criminal activity.

Why does this happen? If a product or service is forbidden by law, and if some people want the product or service badly enough, someone will undertake to provide the illegal item, usually at a price to cover the risk of getting caught breaking the law. A classic example comes from the “prohibition era” following World War I, with the resultant high cost of bootlegging, gang wars, and attempted law enforcement activities.

Prohibition eventually was acclaimed a failure and was repealed. Whether the morality of the people was improved or diminished by the experiment is not the subject of this inquiry. Nor is the question of whether the government should attempt to legislate morality. We are merely pointing out the tremendous costs involved, costs forced upon individuals who might rather have spent their money in some other way.

Not repealed, however, is the governmental attitude toward alcoholic beverages. Instead of direct prohibition, there is now a “prohibitive” tax on liquor. Likewise, “cigarettes may be hazardous to your health,” and are heavily taxed. These taxes and the high costs of enforcement are a part of today’s high cost of living. These three examples — drugs, cigarettes, and liquor — illustrate problems which arise largely out of government intervention, and then have to be controlled, to some extent, at very high costs to taxpayers. In any event, when the total cost of government becomes as burdensome as it is in this country, the incentive to cheat is strengthened, as anyone could testify who either files or fails to file an income tax return. There is a strong temptation to get “a piece of the action” by government workers who handle “public money,” award contracts, purchase items for government use, and the like. And even the rare few who occasionally expose such cheating must be sorely tempted not to do it. Who wants to be a model of integrity in a den of thieves!

Welfare Costs

Government welfare activities are another source of corruption. Such programs have grown by leaps and bounds in the past quarter century at a time when the nation was never more affluent. The reasons are many and often complicated. Many social workers and other government employees seem to measure their success by the number of cases handled and the amount of money distributed. Social Security offices, for example, post notices in local papers saying in effect: “Are you getting all the Social Security you are entitled to? Come in and let us help you!” Workmen’s Compensation clients are officially advised not to deal with employers but to come directly to the Board.

Aside from the outright cheating, one of the causes of the rising cost of welfare, a cause which the welfare client cannot change, is minimum wage legislation. Wages, set higher by law than they would be in a free market, increase unemployment. The unemployables are especially the young, the old, and members of minority groups. Whether for lack of skill, or of education, or whatever the reasons, unemployment rises sharply in such categories whenever minimum wages are raised by law. Increasing unemployment means increasing welfare costs.

Respect for Property

Part of the problem is the breakdown of respect for property. And especially is this true of the growing volume of “unowned” or “public” property. Consider, for instance, the breaking of windows and other destruction of school property. The problem is serious enough that some schools have gone to the considerable expense of installing “unbreakable” glass. Some new school buildings are being built without windows.

College buildings and grounds are prime targets for vandalism; public parks and playgrounds also are used and treated with disrespect. It seems that what belongs to everyone belongs to no one. The cost to those who must pay for such vandalism and destruction lowers their level of living, deprives them of alternative ways they would spend their money.

Governmental efforts at “consumer protection” go far beyond curing us of the “bad habits” of drugs, alcohol, and tobacco. The government also tries to do to us what is “good” for us. An illustration is the requirement that various grocery and other items be priced by weight so that shoppers can more easily compare products of different distributors, different size packages, and the like. However, after sellers have gone to the expense of doing this (which consumers pay), few shoppers pay any attention to it.

Similarly, when consumers borrow money, or buy on installments, shouldn’t they know their interest costs expressed as a simple rate per year? How else can they compare different sources of credit? So, the revealing of these figures is required by law and adds to the cost for the consumer who is to be protected. Again, there is evidence that few consumers use this new service they have paid for.

One of the most absurd of all consumer protection items is the compulsory addition of seat belts to autos. Why should I have to be compelled to pay for seat belts to protect me in an auto accident? If I think seat belts are useful, I will have them installed and will use them! Who is likely to be more interested than I am in protecting me from injury? Upon discovery that only one-third of the drivers were using the seat belts they had been forced to pay for, all drivers were then subjected to the costs of installing buckle-up buzzers and lights and other educational devices.

Other consumer protection items such as air bags, more effective bumpers, and other gadgets will be compulsory additions before long and the cost of automobiles to the consumer is bound to reflect the additional expense. It is estimated that by 1975 the cost of these additions, which the consumer did not order, will be more than the total cost of a new car when Americans were less affluent than today. This might be a part of your “level of living” you would do without if you had a choice.

Most “consumer protection” plans show a complete lack of faith in two very important aspects of the market. One is the wisdom of the consumer in looking after his own interest and the other is the power of competition between suppliers in an unfettered market to serve the consumer as he wishes.


The attitude of governments toward gambling is a curious thing. At times, it has appeared that governments have considered gambling to be immoral and have tried to ban it completely. More recently, governments have permitted gambling in some places, but not in others. You may be permitted to bet on a horse race at the race track but not elsewhere. You may indulge in games of chance if they are conducted by churches licensed by the state. So, perhaps gambling is not really a moral problem at all!

In recent years, in their quest for new sources of revenue, more and more states are permitting and encouraging gambling so long as the state gets a substantial cut of the proceeds. In New York State, you need not go to the track to bet on the horses if off-track betting is more convenient. State lotteries also are gaining in popularity and respectability, with a large “take” going to the state.

Still, the state is partly in and partly out of the gambling business. Many types of gambling such as the “numbers” game, betting on human athletes or teams, and other games of chance are still illegal. It would be difficult if not impossible to estimate the amount of money which governments spend unsuccessfully to enforce gambling or anti-gambling laws — another example of spending your money in a way you might not spend it yourself, given a choice.

The Problem

Most of the economic problems that are left to the market are solved without great fanfare. We either buy, or refrain from buying, and thus send a meaningful signal to the producer. It doesn’t require a committee or a government commission, or a popularity vote to make the decision. If enough people object to tail fins on their autos, the manufacturer will soon get the message. And if the decision of the market goes against the lover of tail fins, he rarely makes much of a fuss. But let the decision be made by a government bureau, or even a Harvard professor, and a feeling of disenfranchisement is certain to arise.

Practically all of the major economic problems that seem so troublesome are the result of some activity of government when it has gone beyond its principled role of protecting life and property. One of our most serious, with ramifications in many areas of life, is inflation. Inflation is simply the result of the Federal government spending beyond its means and expanding the supply of money to support its profligacy.

School problems, involving such questions as how to finance them, who should run them, who should attend them, and what should be offered in them, are largely problems which arise because government has assumed much of this responsibility. Little choice is offered those concerned.

The problem of housing, especially in urban centers, is largely a result of the intrusion of government into urban renewal, rent controls, construction codes, and other restrictions.

Consumer protection would cause no difficulties if it were a voluntary thing between buyer and seller. Auto manufacturers would gladly supply seat belts to those who want them and are willing to pay for them — just as radios are made available. The problem arises when motorists who neither want nor use them are compelled by law to pay for them.

Just now, control of pollution of air and water is being promoted by a few vocal individuals, organizations, and an imaginative press. In haste to respond to such pressures, governments are certain to further add to their already overextended activities.

Are you getting your money’s worth? The question finally boils down to whether you are primarily interested in freedom of choice for the individual — your choice with your own money — or “full security and protection” by government in every last detail.

True, some consumers will make a lot of mistakes, as judged by you and me, in their choices as to how to spend their money. But far more serious than the combined errors of individuals is the master error — a belief that such mistakes could be avoided if only the government were in total control of our lives.




Freedom can well be lost to us through misinterpretation of it. When we think it gives us the right to another man’s harvest, or entitles us to an honor we are unwilling to earn, we place ourselves in a bondage that curtails our true growth in every way.

Through the privilege of choice our way is opened for us to become what we will. The wise use of this faculty brings out the best that is in us, and thereby places us in positions and circumstances that are compatible with our abilities and much to our liking… Freedom does not mean that each shall have the same thing, or even express in the same way; for it is every man’s right to discover the path to his highest good. But how we use this priceless heritage of choice decides what we become. True freedom is experienced as we earn it through thought and deed.


From the “Daily Guide to Richer Living” for September 15, 1960, appearing in Science of Mind.

  • W.M. Curtiss served as executive secretary of The Foundation for Economic Education (FEE) in Irvington, New York.