Let’s keep this among ourselves, but we nonrich folks have a good thing going. Even though we are of modest means, we have a huge staff of servants who perform valuable services for us. The best part is that we don’t even have to pay them.
For example, when VCRs came out almost two decades ago, they were more than $1,000 each. Like most of you, I could not afford that. Today they are $200 or less, within the reach of most Americans–and with better features! What happened?
Our servants spent their own money to buy VCRs. They suffered all the headaches that the bugs in a new product sometimes cause. By doing that, they gave the manufacturers a chance not only to work out those bugs but also to get more efficient at making VCRs. As that happened, costs dropped, and competition translated falling costs into falling prices. Eventually the price dropped low enough that you and I could afford VCRs. Some of us have more than one.
The same thing happened with many other products. Everyone can afford a television today. But not so long ago that was not true. Only the richest people got TVs when they first came out. Same with automobiles, personal computers, calculators, microwave ovens, dishwashers, clothes dryers and washers, and stereos.
We should be grateful to the people who bought those products early on. Had they not, we would not be able to afford them today. They might not be offered at any price. And it isn’t only casual products that undergo that process. Life-saving devices, such as the latest medical technologies, are also tested by our servants.
The reason I said we should keep this to ourselves is that those people may not know the big favor they are doing for us. It rarely, if ever, occurs to them that we get a free ride off their consumption. Personally, I am happy with this state of affairs and don’t wish to rock the boat.
This is ironic, really. They consume and we benefit. Who’d have thought it could work out that way? We don’t even have to command them to help us. They do it for themselves. Yet we get cool things that otherwise would be out of reach.
You might be curious about the identity of these servants. I’ll tell you only on the condition that you not seek them out and express your gratitude. Remember, we’re keeping this quiet.
Our “servants” are the rich. That’s right: the people making the big bucks. It would have to be them. Who else has the money to buy a $1,000 VCR for home use? They are the same kind of people who bought the first ballpoint pens at $20 dollars a pop. (And that was when a dollar was worth lots more; today pens, like matches, are given away.)
Our racket is safe because the rich don’t test products for our sake. They buy new, expensive things because they want them. The benefits spill over onto us apart from any intention. But that’s how so many benefits from living in society get passed around. Adam Smith observed that the butcher, baker, and brewer provide us dinner not because they love us, but because they love themselves. It’s a good thing they do. As Smith added, “By pursuing his own interest [a person] frequently promotes that of society more effectually than when he really intends to promote it.”
Like the rich, the rest of us also work to make ourselves and our families better off. That’s proper — no apology is needed. But it’s good to know that there are significant secondary benefits from that activity. If we don’t see that, we will fail to see the threat that the taxman and regulatory cop daily pose to our well-being.
