All Commentary
Monday, August 1, 1994

Perspective: Bunnie Rabbit, Winnie, and the Grand Plan

With their uncertainties and fears and aspirations, people do much fretting and flailing. It is a hard world, to be sure. So we work and save and plan. And in our striving and struggling, the veneer of civilization is often worn very thin. It is worn completely through at times and in places, exposing our greed and gaucherie and petty preoccupations.

A vastly more attractive and assuring aspect of being is provided by furry friends. I have been blessed with companionship of my rabbit, Bunnie, and my dog, Winnie. Bunnie had to leave me some while ago, and now Winnie, too, has gone.

Both little Bunnie—she of the dainty face and long ears and button tad and velvet coat—and dear Winnie—pretty and cute and sweet and fetching—like the lilies of the field, neither spun nor sowed. They directly contributed nothing to gross domestic product. They were consumers, not producers, absorbing a bit of the world’s scarce resources and returning nothing—nothing but an example of poise and patience and grace and affection.

Presumably, we shall never fully comprehend the Grand Plan of the Universe. But much of what we can suspect and infer is to be gained—if we are willing to learn—from the humble likes of Bunnie and Winnie. While people meanly scheme and worriedly strive and struggle, the Bunnies and the Winnies seem instinctively to have found their role and purpose. They play their part with an innate dignity and beauty of nature which should humble us.

There are many ways in which we can do ourselves in, individually and collectively, and the human race has worked assiduously to discover and utilize them all. Occasionally, a Shakespeare, a Rembrandt, or a Beethoven reminds us of our angelic heritage. A few of the world’s peoples have grudgingly permitted some experimentation in social arrangements of freedom and individualism which can ease the pains and constrictions of scarcity. It is not surprising that progress therein is, at best, slow and unsure, for it is perversely protested and opposed by most. Unlike the Bunnies and Winnies—the supposed lesser of God’s creatures—people persist in rejecting their role and subverting their purpose.

Scarcity is not confined to iron ore and arable land. The most constricting scarcities are those of character and personality. All our cleverness and wit, all our tools and technology, all our constitutions and posturings will leave us poor, indeed, a disgrace in the eyes of the Deity, as long as we lack the goodness and grace and gentility of Bunnie Rabbit and Winnie.

—William R. Allen

Why Medical Costs Are High

There is much consternation about the high cost of medicine in the United States. I have heard all sorts of explanations for this but none appealed to my common sense. Today I carne up with one of my own, and I am sufficiently vain to think it makes very good sense. But first a bit of background.

I have medical insurance through my employer. Usually I get a checkup every year. I am now at the age when it makes sense to do this, although I have no unhealthy habits. My father died of a heart attack at 67, and I am 55, so why be complacent?

Recently my doctor prescribed a stress test to see if I might have heart disease. After I had spent eight minutes on a treadmill, technicians took pictures of my circulatory system.

As I lay there for about twenty minutes, I thought about high medical costs. And it dawned on me: Of course our medical costs are high. We have an intense desire to live!

I hypothesize that this actually explains why we spend so much money on medicine: We want to live as long as we can, and we want to be as healthy as the ingenuity of researchers and practitioners makes possible.

But it is a costly proposition. Add to this that many people also wish to strain their biological capacities with such indulgences as heavy drink, heavy smoke, and reckless driving, which can clearly put them at high risk of medical difficulties. For lack of abetter catchphrase, let’s say that the intense desire to live and to fill life with much enjoyment, pleasure, and adventure makes it likely that people in America will spend much more money on medical care than would people in cultures where the human life is not so highly prized.

I am not trying to justify any of this, although I will readily admit that I find none of it objectionable. I want to give a sensible answer to politicians, who worry that we pay too much for medicine. I suggest it may simply be that we want to live longer and with more intensity than people do elsewhere.

—Tibor R. Machan

Income—Earned and Unearned

We often hear that some income—notably wages and salaries, the returns on labor—is earned, while other income—notably interest and dividends, the returns on capital—is unearned. This contrast usually arises in the context of discussion of what constitutes an equitable tax system, and has hence acquired a measure of importance. The distinction between earned and unearned income is rooted in the idea that it is labor that makes for value, and hence that it is the fruits of labor alone that are earned. This idea has a respectable pedigree: Both Locke and Marx held some version of it.

In truth, however, as the Austrian School has taught, income is earned by satisfying the wants and needs of others. This satisfaction can come from various sources: It can come from labor and it can come from capital, as well as from any other factor of production.

Labor by itself may be sterile. It must satisfy some need of others, some need for which they are willing to pay, for it to result in earnings. Likewise, the mere deployment of capital may be sterile. Capital must be deployed productively—i.e., so as to satisfy the wants and needs of others as those others see it—for it to result in income. And when it does, such income is most certainly earned, as consumers—not government officials—decide by their purchases.

—Joseph S. Fulda

  • William R. Allen is an economist, professor and author. He is known for his authorship of economic literature alongside frequent co-author Armen Alchian.
    Allen obtained his A.B. (Bachelor of Arts) from Cornell College (1948) and his Ph.D. from Duke University (1953).

    He instructed at Washington University prior to joining the UCLA faculty in 1952. He has been a visiting professor at Northwestern University, the University of Wisconsin, the University of Michigan, Southern Illinois University, and Texas A&M University, and he has been on the faculty of the Colorado School of Banking.