You sell 1,000 bagels every day for one dollar each. Then someone comes into your store and says that one dollar is an unaffordable price, and that you will be prohibited from selling any bagels at all unless you set aside 200 bagels to sell for fifty cents each.
Set aside the morality of someone threatening you for not conducting your affairs as they demand.
What happens next?
So, every day, 200 moldy bagels are now sold to people who are willing to to endure lotteries, financial statements, and complicated legal restrictions.
Who gets the other 800 bagels?
Set aside the morality of someone threatening you for not conducting your affairs as they demand.
What happens next?
- You could try to sell the fifty-cent bagels on a first-come first-served basis, but that isn't "fair" because that cheap-bagel line in front your store might include people who could afford dollar bagels. Why should they be able to buy cheap bagels? And besides, it's humiliating to make people wait in a line.
- You could have a lottery in your store. That gets rid of the line, but it still has the pesky issue of people getting cheap bagels that they don't deserve.
- You could make your customers submit financial statements so that you (and your auditors) ensure that only the most deserving people get cheap bagels. This assumes that it costs very little in time and money to prepare financial statements. But then a problem arises: People who don't even want fifty-cent bagels will buy them anyway, and then resell them for a dollar. Hang on! That defeats the purpose of paternalism. The goal is not to make others better off as they see fit; the idea is to make them better off as their (pretend) patrons see fit; i.e., with bagels.
- After making your customers enter a lottery drawing and submit financial statements, you then make them sign contracts that prohibit them from reselling bagels for more than fifty cents. That ought to make them eat their own bagels, even if there are other people who want/need the bagels even more.
- You finally have what seems to be a better idea: Sell 800 bagels for a dollar, and 200 stale bagels for fifty cents. If the bagels are sufficiently moldy, then you probably won't even need the lottery, the financial statements, and the resale restrictions -- but since the regulatory mechanism has now calcified, these restrictions remain.
So, every day, 200 moldy bagels are now sold to people who are willing to to endure lotteries, financial statements, and complicated legal restrictions.
Who gets the other 800 bagels?
- The supply of fresh bagels has gone down from 1,000 to 800, and cannot be made up my making more fresh bagels because that would violate bagel-producing restrictions; i.e., the tradition/culture/character of bagels would be harmed if too many fresh bagels are made.
- The price of the 800 fresh market-rate bagels is now $1.25. If you lost the lottery, now you can't even get a fresh bagel for a dollar. Those 800 people have lost 25 cents each.
- The 200 people who used to pay a dollar for bagels have been replaced by 200 people who now pay 50 cents for moldy bagels. There is no gain here, unless you feel that the moldy-bagel people have more of a moral claim then fresh-bagel people. Basically, at best, there are 200 winners and 200 losers.
- On net, we now have 800 losers.
- With time, bagel makers leave the market, but because of the reduced profitability of being forced to sell cheap bagels -- and dealing with bagel bureaucracies -- there are fewer new people entering the bagel-making business. Even fewer bagels are made. People now find substitutes. The bagel market is wrecked. Even more restrictions are put in place to "correct" the problem. Fresh bagels become even more scarce, and are now considered a "luxury" item that only the "rich" can afford. Cinnamon-raisin bagels are almost unheard of, and usually mark the owner as being obscenely rich.
- Bagel makers are cast as cruel people, only interested in profits. They don't even know how to make quality bagels any more!
- Politicians run on platforms to correct the bagel problem. More affordable bagels! (Maybe even single-payer bagels?)
- Really, it's the Jews behind all this. Everyone is just afraid to say it.