Tom McMahon: The Four Ways To Spend Money
Been working my way through the "Free to Choose" programs by Milton Friedman. A great view. RIP, Milt.
From PJ O'Rourke's All the Trouble in the World: The Lighter Side of Overpopulation, Famine, Ecological Disaster, Ethnic Hatred, Plague, and Poverty:Thought about this the other day while in Fairway, waiting behind an old lady at the deli counter, who was gonna make sure she got what she wanted at the price she wanted (type 1 spending); last week as I stopped at a wine shop around the corner from the apartment of a party which I was about to attend, and asked the guy for "a decent red under $10" (type 2 spending); when I read about the $13 per person "high tea" service, et. al. spent by the directors of the Legal Services Corp., a government funded organization to help the poor (type 3 spending); do I need to give an example of type 4 spending? Pretty much anything the government does "for the children."
1. You spend your money on yourself. You're motivated to get the thing you want most at the best price. This is the way middle-aged men haggle with Porsche dealers.
2. You spend your money on other people. You still want a bargain, but you're less interested in pleasing the recipient of your largesse. This is why children get underwear at Christmas.
3. You spend other people's money on yourself. You get what you want but price no longer matters. The second wives who ride around with the middle-aged men in the Porsches do this kind of spending at Neiman Marcus.
4. You spend other people's money on other people. And in this case, who gives a s**t?
Most government spending falls into category four. Which is why the government keeps buying us Hoover Dams, B-1 bombers, raids on Waco cults, and 1972 Federal Water Pollution Control Acts.
Note: As PJ himself notes, these four ways were first described by Milton and Rose Friedman in their book, Free to Choose.
Been working my way through the "Free to Choose" programs by Milton Friedman. A great view. RIP, Milt.
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why do you assume there is such a huge difference between spending my money on other people and spending other people's money on other people? I mean ... people have other reasons to strive for excellence other than just because it's their money, right? like for instance bill gates hired someone to run his foundation in terms of deciding where the money goes. this person is spending Bill's money on other people, but you can totally bet they "give a ####" in the very best most excellent way. Same goes for government. if we ... "hire" the government to spend our collective money on other people, that doesn't automatically mean they don't give a ####. why this strange dichotomy between private and public spending. people spending their own money on other people can do, and have done, a really ###### job, making the other's people's lives more miserable, and people spending other people's money on other people can do, and have done, a really amazing job, making other the other people's lives better. and vice versa. it's not totally defined by whether it's your own money or not, even though that might come into it. Does that make any sense?
ReplyDeleteAssuming you are at sea. Hope you are having a grand old time, and that lots of stuff is breaking, so you don't get too bored. =)
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