The Problem with Free Bread

It is human nature to want that which we perceive to be of the best value. It stands to reason then that a “free” offer will trump all other offers, even when the other offers are actually good deals. For instance, if someone were to give me the choice of receiving free bread or bread for $1, I would choose the free bread, all other constants being held equal. Even if the $1 price was quite reasonable or even a bargain, I would still choose the free bread. And so would you because that is the most logical decision and it is, economically speaking, the wisest decision, if there were no other consequences to the decision.

The problem with the free bread program is that it is only a wise economical decision if you fail to consider the future and the real life consequences of the situation. How long can someone continue to produce bread for free? Not long. So if we, the tax payer, want the free bread program to continue we can press our representatives to do something which will keep the program in place that we like so much. Now representatives, being elected on popularity, will rush to make laws which require the free bread program to continue. In order to do so government agencies will need to be set in place to gather the money to pay for the “free” bread program through taxes, then decide where the tax money ought to go and in what quantities, distribute it to the chosen “free” bread producers in the determined quantities and finally they will have to police the recipients of the “free” bread tax money to make sure they are not cheating or lying or defrauding the “free” bread program in any way.

Now the bread which would have cost you the baker’s cost of the ingredients, a portion of his cost to run his ovens and pay his rent, and a profit for himself is going to cost you the bribes which the representatives had to pay to get the “free” bread bill passed, the agency to collect the taxes, the panel to determine who receives the “free” bread money, the office which distributes the “free” bread money, the policing agency which protects the “free” bread money, the courts who hear trials and issues punishments to those who defraud the “free” bread program, the baker’s cost of the ingredients, a portion of his cost to run his ovens and pay his rent, and a profit for himself.

The program which was intended to give us free bread is, in actuality, giving us bread at an exponentially higher cost than it would have cost if we had purchased it directly from the baker. The other additional loss to us is our lost ability to affect the baker’s personal profit and the quality of the bread which he sells. Before the “free” bread program if the baker produced a bread of low quality individuals would purchase their bread from a different baker whose quality was more to their liking. This loss of sales would hurt the baker where it counts, his pocket, and if he is a logical man he would do one of two things; either he would lower his price and sell his lower quality bread at a cheaper price, or he would improve the quality of his product. In the same way, if the baker decided that he should charge exorbitant prices so that he can earn massive profits individuals would simply buy their bread from another baker who had a more reasonable idea of what his own profit should be. With a government agency in charge of spending your bread dollars, you the consumer no longer have any means to influence the quality of the bread or the profit which the baker receives.

Now your bread costs you more, you have no way of influencing its quality and the government is in charge of who receives bread, in what quantities and when they should receive it. So I ask you, how do you like your free bread?