"Free" Is Not Necessarily Good

“FREE” IS NOT NECESSARILY GOOD

Christopher Ebbe, Ph.D.    7-11

 

ABSTRACT:  To receive something as “free” seems to most people to be a “good thing,” but it often undermines appropriate responsibility relationships and leads to distrust and dishonesty in society.

KEY WORDS:  free, free gift, personal responsibility, sales, deals, benefits, transparency in business

It might seem as if the more “free” things one receives, the better, but in fact “free” things offered by businesses usually embody deception and manipulation that are destructive to comfort and happiness for all in society, while “free” things offered by government impair personal responsibility and encourage competition among citizens.  It might seem that the value of free things that most of us receive is relatively insignificant, but can still be instructive to examine the subtle impact of free things in general.

In our society we use “free” things to attract customers, to appease the troubled, and to appear to have others’ best interests at heart in hopes of securing their trust and affiliation.  Banks give “free checking,” governments give “benefits,” and politicians give to their constituents in hope of receiving votes.  If giving is without strings and without desire for getting something back, then it can build healthy connections between people and encourage further generosity, but if the giving of something “free” is in hope of return, then it can distort responsibility relationships, putting significant limits on trust and on the possibility of open-hearted cooperation.  If all aspects of an exchange are known to both parties, even if something “free” is involved, then things are aboveboard and at least a transactional trust (if not a personal trust) can develop.

When banks offer free checking (or free ATM transactions), which actually costs banks something to provide, they hope that you will sign up as a customer and stay around as a customer.  In order to recoup what they spend on your free checking, though, they create other fees that other customers (and perhaps you, too) are paying, that actually pay for your free checking.  You also pay indirectly by receiving a lower rate of interest on your deposits.  These other fees would be smaller if they did not include the cost of your free checking, so other people are paying for part or all of your free checking.  Sometimes these fees are an understandable penalty, as for late payments or overdrafts, which cost the bank something, and sometimes they are for things that do not even cost the bank.  You are happy because you did not have to be responsible for what you received, and this creates a purely instrumental affiliation--you stay around in hopes of getting more things free that you will not have to be responsible for.  If you stay around but are perfectly clear that the bank is not doing you a favor but is in fact doing itself a favor by enticing you to use its supposedly “free” checking, then you will not be harmed, but if you mistakenly “like” the bank for giving you something free, then you have become dependent on the bank and can be manipulated by the bank in the future.

Governments give preferential treatment to those they favor, and these benefits are paid for by other citizens who are not getting these benefits.  Every law or regulation that benefits some people must be paid for by others who are not benefiting (or paid for disproportionately by others).  This makes government a battleground for gaining enough influence to get the government to give one of the vying parties preferential treatment (which other citizens will have to pay for).  Every time you get something free or extra from the government, other people are paying all or most of the cost.

Politicians try to “bring home the pork” in terms of government monies that will be spent in their districts for their constituents.  No one talks about the fact that other people in other districts are paying for this local spending.  Once again, government becomes a battleground for who can get the most “free” money.  (It is no excuse to say “The government has all this money, so why shouldn’t I get some of it?” since all of the money that the government “has” is tax money, paid by you and me and supposedly belonging to all of us, not to just a select few.)

Internet firms offer free e-mail accounts in hope that you will pay attention to the advertising on their web pages sufficiently that you will buy something from their advertisers.  The advertisers are paying for your free e-mail.  Mail and internet businesses sometimes offer free shipping, which is paid for not only by other customers but also by you, in terms of higher item costs (that include the amount that you would have paid for shipping, if shipping had been an identified cost).  No business really gives anything for free, since their costs for what appears to be free are made up for by other charges and fees.  What appears t be “free” is not free at all.  The willingness of many people to believe otherwise and to attribute personal value to the sources of free things is both naïve and amazing.

One of the most widespread examples of “free” items is the broadcast media.  Since there was no easy way to charge users when radio and TV were developing, advertising became the financial support for these media.  The cost of these media is hidden from listeners and viewers, who now pay in terms of exposure to advertising (and now also pay for delivery of more than just broadcast to their homes via satellite or cable).  Business persons might argue that advertising serves the function of alerting people to new products, but more importantly for their purposes, advertising is cleverly designed to induce customer allegiance and loyalty, as unconsciously as possible, as well as being the best public example (besides politicians) of misleading statements (thus teaching our youth that “distortion of the truth is the norm,” “cheating is OK,” and “you can’t really trust anyone”).  These evils could be avoided if every channel or station charged a monthly fee to support their operations and programming, and if consumers chose which to pay for and which not to pay for.  These payments could be readily collected by cable and satellite companies with today’s technology.  (It would be instructive to restrict advertising to one section of a publication or presentation, such as the last 20 minutes of a one-hour TV show or to only one section of a newspaper, so that people could more easily choose not to see it or view it, and then we would see a change in how media are supported!)

Every “free” item has a hidden cost, unless it has been provided through donations of others with no wish to get something back.  The essential point here is that all of these “free” things are not really free, and to receive them builds the notion in our heads that more things, perhaps everything, could be free, thus depriving us of our full realization that life is not like that and never will be.  Everything that human beings create, build, or obtain is paid for by human labor.  This has always been true and will always be true, since that is the nature of the environment that human beings inhabit.  Nothing is free.  Hunting “free” game takes effort, as does finding fruits and nuts to gather.  We may wish, unconsciously, to go back to being infants who are provided for totally by someone else, but even infants work to get fed, by crying!  The idea that each person should be responsible for himself or herself is essential to a well-functioning society and a well-functioning economy, and free things weaken this fundamental assumption.

Supposedly “free” transactions also distort the appropriate relationship between a provider and a buyer.  If the buyer does not know the true cost of the item or service to the provider, he has no way of judging whether the provider is honest and reliable (or is predatory, manipulative, or over-charging).  Most people like to know with whom they are developing a relationship and whether they should buy from that provider again.  The same goes for “deals,” “sales,” and “volume discounts,” all of which offer opportunities to providers to distort the production cost and profit margin of a product.

The distortion of responsibility inherent in “free” items is partly explained by the fact that we have lost any sense of inherent worth of objects (and of ourselves as well) in our loyalty to a market system that says that the worth of something is defined by what someone else will pay for it.  This transactional definition encourages us, then, to see price manipulation (and price gouging) as perfectly OK (at least as long as we are the ones benefiting).  There are advantages to a free market, of course, but having a free (or relatively free) market system means that people must be free to set prices as they wish.  This is feasible and undistorted as long as the provider offers only one item, and we can directly see his or her wealth, but as soon as a provider offers many products or services and is anonymous to us, deceptive pricing opportunities present themselves, and few providers are straightforward enough to be honest with buyers about the price of each individual item.  It would be more honest if every item was marked with (1) the amount of money that was spent getting that item to the buyer, (2) the profit margin, and (3) the asking price.  If you think that this is superfluous, consider that providers would object strenuously to such a system, not because of any difficulties in providing it (computers do it all nowadays) but because it would remove many opportunities for the provider to manipulate the buyer without the buyer knowing it.

To summarize, the deception (incomplete pricing information) and manipulation (psychological manipulation through advertising; discouraging self-responsibility; encouraging dependence) inherent in the use of “free” things by business and government decrease trust throughout society because recipients usually realize at some point that they are being manipulated by entities that do not want recipients to know their full intent or future plans for recipients.  This encourages people to believe that everyone is dishonest and that it is morally acceptable to deceive and to take advantage of others.  It also encourages people to accept receiving things for free that others are paying for indirectly.  “Free” things also weaken the assumption that everyone should be responsible for themselves, since “free” things encourage dependence and clinging to the source of “free” things instead of looking at the full range of one’s options.  This dependence undermines self-respect as well.

A society in which we can trust others not to try to take advantage of us leads to better cooperation and greater overall happiness, but the bottom line to all this, sadly, is that people don’t care enough about others to be fair and honest with them (especially others that they do not know personally), and people do not perceive that being fair and honest will “pay off” with significant future advantages.  This is the price we pay for having huge economies (with more products and opportunities) in which we do not have any personal knowledge of other participants.  Perhaps this problem can be reduced but only by individuals coming to believe that it is in their best interest to do so!  (See my essay “The Answer to All Human Problems!”, which advocates an increase in positive interactional behaviors by all of us.) 

  

blog\postings\freeisnotgood