OPINION:
So it’s all about “affordability”? Yes, the cost of living is a huge problem for Americans, but in the constant articles and media accounts, a key factor is often ignored, one we can relearn from the first Thanksgiving.
The high cost of living is more about a lack of competition and a lack of supply and the result of a compromised election structure.
It can fairly be said that our political system has developed into a system of legalized bribery. Because of the size of campaigns, combined with the reach and cost of mass media, fundraising is all important to political success. Economic actors then use their resources to influence political leadership. This leads to regulatory policy geared toward reducing competition and supply.
Shortages of supply and diminished competition are the only two things that raise costs higher than they should be. A truly free market and, yes, capitalism are the only ways to provide the goods and services we need at prices we can afford.
It bears recalling these lessons in the Thanksgiving season because capitalism is what saved the Pilgrims, who celebrated the very first Thanksgiving. When those Pilgrims arrived in this harsh and undeveloped land, they decided in their first winter to engage in a collective economy — read that as socialism. They would all work theoretically and share equally in the farm products they would grow.
It didn’t work. They nearly starved. Lacking individual incentives to work and grow their own crops, many didn’t put forth the needed effort. Gov. William Bradford, who succeeded the first governor, quickly changed to a capitalist system under which each worker could farm his own private plot and keep or sell (trade) with the other members of the group. This succeeded famously, and the colony survived — even prospered.
The sad reality is that many Americans, especially younger ones, lack this basic understanding of economics. This is reflected in recent election results in New York City and Seattle.
Grand promises have always been part of politics, but now there is little knowledge, just as with those early colonists, of what works and what doesn’t. You don’t make the cost of living go down by taking from one group to subsidize another. You reduce the cost of living by encouraging production, innovation and individual initiative. You lower costs by obtaining more supply and generating competition among suppliers.
It’s unfortunate that our regulatory system is gamed to reduce supply and competition, which results in fewer choices for consumers. Americans would benefit from more health care providers, broader insurance options, more oil companies, you name it. The key is more supply and competition. Everything becomes more affordable.
This all circles back to a political system that allows economic actors to use their money to influence policy to reduce competition. That can be changed, and Americans need to wake up to this system of legalized bribery if they want lower prices and a more affordable life.
• John Cox is a businessman, former nominee for California governor and chairman of HearThePeople.org.
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