The Frying Pan Fable Follow-Up

Imagine you are in your house when suddenly you hear an intruder. Fearing for the safety of your family, you rush over to your closet and start loading your Tommy gun. As you are preparing your weapon, you have a random thought: “This Tommy gun is pretty effective for self-defense, but I think I might just use my trusty frying pan instead. Sure I’ll have to get closer to the intruder and put my life at considerable risk, but I just like my frying pan a whole lot.” Throwing your Tommy gun aside, you pick up your frying pan and go to defend your house.

Last week I made the point that created items generally work best when put to use according to their intended design. Additionally, this opening illustration highlights another key point about roles: when you utilize something beyond its intended role, you often usurp the designed function of something else. 

In terms of the role of government, this is an important concept to understand. When weighing benefits and costs, we must realize that as the role of government expands, the roles of other societal forces shrink. Just as the frying pan rendered the Tommy gun useless when its role expanded unnecessarily, so government enlargement can hinder the effective and intended functions of other societal institutions. This can be seen in two specific areas: social welfare and economic regulation. (I will merely touch on these issues as an illustration of the above point. A fuller discussion of either topic will have to be put off until a later date.)

Social Welfare

Most people would likely agree that it is important to help the poor and the less fortunate. And through welfare, the federal government is very involved in attempting to achieve this goal. However, as government gets involved in these poverty-reduction endeavors, it pushes out other more appropriate institutions, such as the church. Tony Evan notes, “The primary job of caring for those in need was never intended to be a function of government. Can you imagine Paul going to Caesar and asking for a federal grant to fix the problems of poverty within the church in Jerusalem?” (“Turn Neither to the Right Nor to the Left” page 241).

The Bible calls believers to look out for the interests of others (Phil. 2:4, 1 Cor. 10:24), and to materially give to those in need (Rom. 12:13, James 2:15-16). Thus, through the church, we have an institution that is designed for dealing with poverty.  Government welfare, on the other hand, is patently inefficient and unable to make noticeable improvements in terms of poverty reduction, because government was not designed to eliminate or alleviate poverty. Marvin Olasky describes our current welfare system as “the ultimate bureaucracy –an anonymous public supporting anonymous machinery supporting anonymous clients” (“Turn Neither to the Right Nor to the Left” page 208). As follows, the government suffers from a lack of knowledge about individuals and a (potential) lack of motivation to actually help the poor improve their productivity and get off of welfare.*

In summary, the government was never designed to financially provide for the poor. And by acting outside of its role, it inhibits the normal functioning of other effective private institutions, such as the church.

(There’s much more that could be said about the relative efficiencies of private versus public charity, improving private poverty relief, and the morality of government income redistribution. These topics are beyond the scope of this post, but if you’re interested in learning more, I would recommend two books: “Poor Policy: How Government Harms the Poor” by D. Eric Schansberg and “The Tragedy of American Compassion” by Marvin Olasky.)

Economic Regulation

While government economic interference is a very broad topic, the main point that I want to highlight is that government interference in the economy via interventions, such as price controls, usurps the effective and intended function of the price system.

What is the price system, you ask? Economist Robert Murphy explains the role of prices, “A market price is the balance between how eager you are to buy something and how reluctant the producer is to sell it. If something has a high price tag, it’s because it is scarce; if it has a low price tag, it’s because ‘they’re a dime a dozen.’ In short, market prices are not arbitrary” (“The Politically Incorrect Guide to Capitalism” page 9). Among other purposes, the price system has at least two important and related functions in the market: signaling and coordinating.

Prices act as signals to market participants, demonstrating the value that market participants place on the goods in question. Additionally, prices enable individuals to calculate profit and loss, which direct the actions of entrepreneurs. Economist Gene Callahan describes the market process as, “the ceaseless striving of entrepreneurs to locate price discrepancies and profit from them, thus adjusting production to the wishes of consumers” (“Economics For Real People” page 159). Thus, the price system signals to entrepreneurs areas of unsatisfied consumer wants and to intervene to provide the requested good or service. Without a price system, entrepreneurs would be unable to determine which new enterprises might be viable and profitable.

Prices also function to ration goods and services. Rather than allocating goods to consumers based on preference, nepotism, or some other form of discrimination, the price system allocates goods based on the consumer’s willingness to pay. Callahan again states, “the market guides scarce resources toward their most important uses through the voluntary rationing of the price system,” as “the new, higher price of the good motivates people to use less of it” (“Economics For Real People” page 199).

In summary, the price system is fluid and able to react to changes in supply and demand. Economist F.A. Hayek noted, “Fundamentally, in a system in which knowledge of the relevant facts is dispersed among many people, prices can act to coordinate the separate actions of different people” (“Economics For Real People” page 163). Prices serve to alleviate the problem of insufficient knowledge of market factors and to coordinate supply and demand.

Central planning supplants the role of the price system, but cannot allocate goods nearly as efficiently. After all, no individual or group of individuals could possibly track the changing preferences of millions of consumers and producers like the price system can. Furthermore, interferences like price controls distort the signaling function of the price system, disallowing consumers from “voting” for certain goods through their spending practices.  Murphy again notes, “When the government interferes with prices, it cripples the ability of free people to make intelligent economic decisions, just as surely as if politicians interfered with phone lines, e-mail, or other means of communication” (“The Politically Incorrect Guide to Capitalism” page 10). This behavior by the government has the negative effect of causing unnatural shortages and surpluses.

These shortages in particular lead to a rationing problem. If the government sets an artificially low price, the quantity demanded will increase, but the quantity supplied will decrease, leading to a shortage. In a free market setting the price would rise, rationing the good in question based on consumers’ willingness to pay. However, the price control disallows the price from rising, which forces the government to ration the good in question based upon some other criteria besides willingness to pay.

In conclusion, the government was never designed to direct the intricate adjustments of the market. And when it acts outside of its role, it inhibits the normal functioning of an effective societal force: the price system.


My intent was to briefly touch on two areas of public policy as a means of showing some of the unintended consequences of expanding the function of government. I didn’t want to go into considerable depth in terms of discussing the role of government, nor did I want to write extensively on these policy issues. Those will have to be topics for another day. However, hopefully this helped you think through the intended function of government and some of the unintended consequences of government expansion.


If you have thoughts about how government expansion can detrimentally affect other societal institutions, feel free to leave a comment or send me an email. Additionally, if you want to specifically discuss the role of government or either of these policy issues, you’re welcome to leave a comment. Again, thank you so much for reading this blog!


*(You might ask why government and the church can’t work together to deal with the issue of poverty? Does government involvement in welfare necessarily supplant the role of the church? That’s a good question and I’ll try to touch on it briefly. I would say that government’s attempt to alleviate poverty through the welfare system not only have negligible positive effects, but often actually have considerable negative effects. Examples of these effects would be: incentivizing recipients to stay on welfare (a culture of dependency), incentivizing recipients to not establish marriages, and coercively taking money from individuals to fund the welfare system.  Hypothetically, if the government were able to alter this system entirely, it might be able to work with the church. But the bureaucratic, budget-maximizing nature of the government makes it difficult for me to envision an efficient government-operated welfare system. Further, the question of roles becomes important (as I’ve tried to stress throughout these posts). Is it within government’s intended function to deal with poverty?)

Buying Local, Trade, and Protectionism

I always buy locally-made products…unless I can find non-locally-made products of the same quality for a lower price.

“Buying local” is one of the current trends in our culture. Various companies and brands craft entire marketing campaigns around the fact that their products are produced locally, made out of local materials, and/or created with local labor. Now, why would the fact that a company is selling “local” products be persuasive and enticing to consumers?

One potential explanation would be that local consumers buy into a variation of “protectionism” on a smaller, local scale.* This explanation would argue that local consumers want to support their community and facilitate economic wellbeing within the local business environment by shopping primarily or exclusively at local dealers. This might be more of an emotional situation where consumers not only buy a product, but also purchase a good feeling of sorts.**

One of the problems with this line of thinking is the same problem that large-scale protectionism faces. When considering the economic well-being of a certain area, one must look at both the producer and consumer side of things. Buying local products at a higher price (and from my experience these locally made and marketed products tend to be more pricey) may benefit certain local producers but it also hurts local consumers (including you). If a whole bunch of consumers buys overpriced, locally-made coffee, the local coffee shop benefits at the expense of the five consumers.*** Therefore, it is difficult to argue that the local community is better off on net.

And why should local producers be my primary concern? Not to say that I should intend to hurt my community, but this sort of thinking can have the effect of hurting many foreign (or non-local) producers. Think of producers many states away who are efficiently producing cheaper, equal quality goods. Why should I turn away their products, which are of equal quality and a lower price?

Competition and trade forces producers to innovate and cater to consumers. Therefore, consumers should want as much trade as possible and as many product options as possible. This forces producers to use their time and resources in the most effective way possible. If local producers know that I will buy their goods because I am emotionally motivated to support them, then those producers will not be worried about their non-local competition and will be less likely to innovate, produce quality goods, and charge low prices. While this is a much smaller scale example, the “buy local” marketing scheme is similar to an import tariff in that it attempts to limit local consumption of non-local goods.

Now some might say that it saves resources to buy local. And this may or may not be the case. Dr. Arnold Kling in his recent book Specialization and Trade: A Re-Introduction to Economics argues that buying local can actually waste resources:

“Many people believe intuitively that it saves resources to “buy local.” Surely, we think, cheese or vegetables from a local farm must save on the energy required for transportation. However, if the grocery store sells cheaper products that comes from hundreds of miles away, some factor must offset the higher transportation costs. Chances are, the land elsewhere is more suited to growing crops, so that fewer acres are being used to produce a given amount of output. The local land might be better used for housing or as wilderness.
Water or other resources may be used more heavily locally than on distant farms. Whenever produce from distant farms is cheaper than locally grown produce, the price system is telling us that “buying local” wastes resources.”

So next time you are tempted to buy a product merely because it is locally-made, consider the bigger picture. Look into non-local options and try to use your purchasing power to support producers who make the highest quality product in the most efficient way possible. Don’t discriminate against high quality, cost-effective producers just because they live far away from you.


If this post resonates with you or irritated you, leave a comment below and tell me what you think of it. You can always send me an email as well; I’d love to hear your thoughts. Thanks for reading!


*Ironically, one of the most startling side effects of protectionism is that a significant portion of local producers is actually harmed by this type of behavior. Every dollar spent subsidizing the inefficiencies of one producer is a dollar that could have been spent supporting the innovative and efficient ones.

**The price that consumers pay for “local” goods could potentially involve a base price, which would be identical to the price of the product elsewhere, plus a premium to support the local market. This premium portion of the price would then be similar to a charitable contribution in the sense that the only benefit the consumer receives for this added cost is a good feeling for having “supported” the local community.

***How do producers benefit at the expense of consumers? After all, this is voluntary trade, which should be mutually beneficial. The key here is that consumers do benefit, but they could benefit even more by buying a less expensive product of equal quality elsewhere. Thus, this transaction is at least somewhat inefficient, because consumers bear an extra cost without a corresponding benefit.

The Parking Garage Dilemma

I’ve been studying a lot of economics lately and have been intrigued by a field known as “Behavioral Economics.” While I am far from an expert in this field, from my understanding this area of study seeks to explain why individuals make many of the decisions that they do, based on economic theory. This field is rooted in the concept of “rationality” which assumes that individuals weigh costs and benefits when making decisions.

Being a student of economics, and this area in particular, has lead me to try to apply what I’ve learned to some areas of my everyday life. (It is really interesting, as you get into this area of study, to look at and analyze the different decisions that you make on a daily basis. Oftentimes, you will begin to notice that you subconsciously weigh the costs and benefits of decisions without even explicitly thinking about it.)

One such area that I have been wrestling with is the concept of where one should park in a parking garage. I’ve been working in downtown Louisville for the past two years and utilize a parking garage on a weekly basis. Honestly, as I drove into work, I didn’t put too much thought into where to park. I generally would pick the first open spot I could find, so as to limit the amount of time I would spend driving out of the parking garage.

If everybody behaved this way, this topic would be quite uninteresting. After a couple months of parking in this manner, however, I started to notice that cars would drive past me and other open parking spots and head further up the garage in search of other open spots. To be honest, I could not make sense of this decision. Why would somebody pass up perfectly good spots on, say the fourth floor, in order to obtain open spots on the sixth floor? It made no rational sense to me.

Although I didn’t put too much effort into solving this puzzle, it did stick with me and annoy me on occasion. Finally, I obtained some clarity on a day when most of the lower level spots were filled. I drove up to the fifth level and noticed that all of the spots near the elevator were filled. I kept driving past many open spots until I got to the sixth level and also noticed that all of the spots near the elevator were filled. Suddenly, it occurred to me – these people were not trying to minimize the amount of time spent leaving the parking garage, but were trying to minimize the amount of time spent walking to and from the elevator! While I was willing to sacrifice a short walk to the elevator (cost) in exchange for a short drive out of the parking garage (benefit), these other people behaved the opposite way.

(Since writing this initial post in December, I’ve been able to take an “Urban Economics” class, which deals with city structure, transportation, and many other issues, and has given me a few tools to more eloquently explain this situation. Here is a more bit of a more technical explanation of the situation:)

When thinking about the “costs” of travel, economists consider both explicit monetary costs, as well as time costs. These time costs can be further broken down into “access time” costs and “in-vehicle time” costs. Access time cost is merely the disutility that an individual undergoes in order to enter a vehicle (i.e. waiting for a subway, walking to a bus stop, etc.), while in-vehicle cost is the disutility that an individual undergoes during an actual trip (i.e. sitting in traffic, sitting in a crowded bus, etc.).

Generally, to decrease access time, in-vehicle time would have to be increased. For example for a light rail system to decrease access time, the operators would have to add stops to the system. These more frequent stops would, however, increase in-vehicle time for those who were already on the light rail.

Empirical research shows that people actually dislike access time more than in-vehicle time. So, most individuals would rather get on a vehicle quickly, even if the trips itself were to take longer.

This actually lines up consistently with my observations in the parking garage. While I tried to minimize my in-vehicle time by parking in the first spot I saw, these people who kept driving to upper levels were trying to minimize their access time by parking close to the elevators. Apparently, my “ground-breaking” observations can be very easily explained by existing economic theory. Nevertheless, I thought these ideas were worth sharing.

To wrap this up, economics is a fascinating topic and can be used to explain many seemingly confusing aspects of human behavior. I hope this post was interesting and/or beneficial to you.


If this post piqued your interest or if you believe that this is really too petty of a subject to be discussed, please leave a comment or send me an email. Thanks for reading!

Being Human in the Digital Age: The Relationship Between Technology and Society

(Note: the following post is based on a paper that I wrote for my Digital Culture class in Summer 2015. Specifically, it interacts with “Amusing Ourselves to Death” by Neil Postman. These are relevant issues in our current society and I hope that you will find this post to be interesting and informative.)

The invention of the wheel changed the way cultures operated. Rather than manually moving every single item that needed to be transported, individuals were able to save time and energy by moving things via carts and other wheeled vehicles. This demonstrates the effect that technology has on the way societies function. As new technologies come to life, societies adjust and adapt to the benefits of those technologies.

To disregard the effect of technology on society is inexcusable. Postman argues that “technology comes equipped with a program for social change” and as various media become further integrated into our culture, the effect grows stronger (Postman 157). Technology has the power to, not only, change the way we act but also adjust how we think. And it has become apparent that “technological changes in our modes of communication are even more ideology-laden than changes in our modes of transportation” (Postman 157). The printing press had a massive effect on society by introducing a new form of communication, as well as a new way to think about logic and argumentation. As books became more popular, thinking often became more logical and structured. Throughout its existence, the television has redefined entertainment to the point that we often find little fulfillment in the entertainment modes of the past. Where plays used to be a primary source of entertainment, now people tend to find them boring or lacking in appeal. The Internet is redefining information and what it means to be informed in a way that we would wither in a society that communicated slowly via telegram. We must be aware that technologies “are rather like metaphors, working by unobtrusive but powerful implications to enforce their special definitions of reality” (Postman 10). A major part of this awareness revolves around trying not to “make the assumption that technology is always a friend to culture” (Postman 157).

To be human in the digital age, means to question technology and change. Humans have been given an amazing ability to think and communicate about these issues that other creatures lack. Therefore, we should be willing to thoughtfully deliberate on these ideas. We need to throw away our belief in “the inevitability of progress” and discard the idea that “history is moving us toward some preordained paradise and that technology is the force behind that movement” (Postman 158). To just accept technology and assume forward progress is to abandon our responsibility. Postman encourages us that “no medium is excessively dangerous if its users understand what its dangers are” (Postman 161). If we are willing and proactive in thinking about and understanding our technology, then we can be prepared to control it, rather than let it control us. In our culture it can be tempting to put technology and its benefits on such a high pedestal that we ignore the other blessings in life. We, as humans, are responsible to consider technology and also to position in the proper place in our priorities. Technology is a formidable and exciting tool and has the power to destroy society when used poorly and improve society when used well. It is our job to discern the difference between these two alternatives.


For further reading, check out Postman’s book.


I’d love to hear what you think about this post. Please leave a comment or shoot me an email with your reactions to the post. Again, thanks for reading!

Art and Value

(Note the following post is a based on a paper that I wrote for my Digital Culture class in Summer 2015. Hopefully you will find it interesting.)

On what basis do we ascribe value to art? What makes a Rembrandt inherently more valuable than a seven year-old’s crayon sketch? In “The Work of Art in the Age of Mechanical Reproduction” Walter Benjamin argues that, “the unique value of the ‘authentic’ work of art has its basis in ritual, the location of its original use value” (Benjamin 224). Since art’s original function was ritual, its primary value must be based on this concept of pointing to something greater, outside of us. To have ritual value, the piece of art’s context and authenticity must be considered. Benjamin uses the examples of the cults of magic, religion, and beauty to expound upon this idea of art for the purpose of ritual.

Benjamin then explains that art is accepted and valued on a scale, with exhibition value at one extreme and cult or ritual value at the other (Benjamin 224). The exhibition value of art becomes apparent when artists create cultural artifacts for the primary purpose of being seen by others. Cult objects, on the other hand, were created with their main function being “their existence, not their being in view” (Benjamin 224). Cultures create art like this without man as the primary audience. Whether it exists mainly for the gods, the spirits, or oneself, cult art is not meant to be displayed and be seen by others.

In the birth of the digital culture we see a shift in the basis of art and cultural artifacts. Benjamin contends that in the photographic image, “the exhibition value for the first time shows its superiority to the ritual value” (Benjamin 226). This movement is based primarily in our newfound ability to technically reproduce art, which has inadvertently caused our culture to value exhibition and accessibility over the higher, cult value of art. In the past we devalued art by transporting it out of its original context, but now we are further able to diminish the value of art by completely belittling its authenticity. We begin to create art that not only can be reproduced, but with the intent of its reproduction. However, this shift in value comes at a cost. As we singularly emphasize the exhibition value of art, there begins a “qualitative transformation of its nature,” to the point where it exhibits “entirely new functions,” and the artistic functions becomes primarily incidental (Benjamin 225). The purpose of art becomes reaching the broadest possible audience to the point where we completely lose sight of the ritualistic element and authenticity of art. When we see replications of statues of divinities we quickly admire their aesthetic appeal but forget the original purpose of the original statue.

As we, as a culture, shift from a focus on cult value to exhibition value, one new value has become apparent: self-promotion. In selfies, Instagram, and social networking it is clear that members of our culture attempt to use digital images to sell themselves. Whether it be for the purpose of getting a job or just the desire to be well-liked, we love to use pictures and videos to try to make ourselves look as good as we can. Self-promotion is definitely deeply interwoven into our individualistic, American “fabric of tradition,” where we pride ourselves on working hard and bettering our lives (Benjamin 223). This is the land of opportunity where you can be what ever you want to be if you just put your mind to it. As a result of this belief, art has moved away from its original ritual purpose and become a means of enhancing our appeal in the eyes of others.


For further reading check out Benjamin’s book.


If you found this post to be relevant or think it is way off the mark, please leave a comment or shoot me an email. I’d love to hear your thoughts. Thanks for reading!

The History of Advertising in America

(Note: the following post is based on a paper that I wrote for my Digital Culture class in Summer 2015. I hope you will find it interesting and thought provoking.)

A study of the field of advertising can be quite revealing since advertisements attempt to sell products to consumers and consequently require an understanding of consumers to do so. Therefore, the nature of advertisements in a culture speaks to the nature of the people in that culture. The history of advertising in America is quite eye opening and can be seen as “a metaphor of the descent of the typographic mind, beginning, as it does, with reason, and ending, as it does, with entertainment” (Postman 58).

Advertisements in the eighteenth and nineteenth centuries had a fundamental difference from current ads. These older advertisements “assumed that potential buyers were literate, rational, analytical” (Postman 58). They correctly presupposed that buyers, in this time period, were concerned primarily with knowing the merits and potential defects of the product. Since these buyers were serious and analytical, advertisements, in this age, were crafted in a way to appeal to this brand of buyers. These older advertisements were written in “single-column space” (Postman 58) and had the primary purpose of “convey[ing] information and [making] claims in propositional form” (Postman 59). This typographical form of advertising had merit because it employed language as its foundation. Although “words cannot guarantee their truth content,” they do, however, “assemble a context in which the question, Is this true or false? is relevant” (Postman 60). In the 1890’s the foundation of advertising began to progress as slogans, jingles, and photographs began to appear in advertisements. Appealing to the desires of consumers, these advertisements became primarily focused on displaying an entertaining and pleasant experience. So, Postman explains, “by the turn of the century, advertisers no longer assumed rationality on the part of their potential customers” (Postman 60).

This evolution of the basis of advertisements continued and escalated as the television became more prominent. Television commercials for products and politicians have become a normal part of life in America. These commercials do not assume rationality on the part of consumers, and do not try to make truths claims. Substituting “images for claims,” these commercials are basically dramas that appeal to the emotions and desires of consumers (Postman 128). Since no assertions are made, “one can like or dislike a television commercial, of course. But one cannot refute it” (Postman 128). It seems like commercials try to avoid concentrating too much on their products. Many commercials may be ambivalent towards the product or brand being used until the very end of the production. Because, after all, commercials are not about the product being displayed but, rather, they are about the “character of the consumers of [their] products” (Postman 128). Instead of focusing on the greatness of their products, commercials focus on the greatness of the experience of individuals who have bought into these products. Postman states that commercials “provide a slogan, a symbol or a focus that creates for viewers a comprehensive and compelling images of themselves” (Postman 135). They say that if we buy a certain car, we will possess irresistible appeal to the other sex, rather than focusing on the attributes of the actual vehicle. They tell us that if we buy a certain brand of beer, we will have incredible parties all football season long, rather than concentrating too much on the actual flavor or merits of the drink. Having little basis in rationality, commercials must be brief. The commercial “disdains exposition, for that takes time and invites argument” (Postman 131). Therefore, they cater to the short attention spans and instant gratification mindsets of current consumers by providing immediate solutions to all our problems.

Online advertisements and commercials possess many similarities to television commercials. Employing the same brevity and emotional appeals, these forms of advertising may often be the exact same ones that we find on TV. However, online advertisements suffer from not being able to command our attention in the same way that television commercials do. Commercials can often be annoying so we, as media users, often count the cost of sitting through a certain amount of advertising. And while we often deem this process worthwhile for the sake of whatever television program we are engaged in, I believe online users have a smaller tolerance for commercials than television viewers do. Therefore, online advertisements have to go to extra efforts to remain relevant. One way that they accomplish this task is through using algorithms to determine what types of products consumers are interested in. Many of the ads that you see on Facebook and other Internet sites are assembled using research of your past Internet searches. In order to stay significant, these advertisements have to focus on the desires of the individual online user.

Advertisements are about selling a product, appealing to buyers, and ultimately making a profit. Older forms of advertising accommodated analytical consumers, television commercials cater to entertainment-seeking buyers, and online advertisements appeal to individual wants. So no matter the make up of the consumer base, you can be sure that marketing experts will continue to research the specific factors that appeal to consumers and try to play off of those factors.


For further reading, check out Postman’s book.


Regardless of your reactions to this post, I’d love to hear what you have to say. Feel free to leave a comment or send me an email with your reactions to what I said here. Thanks for reading!

Public Radio and Public Goods

I listen to a decent amount of public radio on my various commutes to school and work. Inevitably, there comes a time every couple months where the station that I listen to tries to coerce its listeners into donating money to support the station. “Coerce” might be a strong word, but I do want to emphasize that these reporters really lay it on thick.

And they use a number of tactics. First, they try to emphasize that the dollar amount they’re asking for is really small. Who can’t part with a mere $5 a month? Second, they inform their listeners about some great deal where, if the listeners donate a certain amount, a charitably-minded company will match that amount. Of course this amazing opportunity only lasts for a short period of time, so listeners had better jump on it. Third, they share testimonials of individuals who have donated to the station and whose lives have consequently been changed for the better. Finally, and most interestingly, they appeal to the listener’s sense of morality. Is it really fair to be listening to the station without paying for it? Listeners who are basically stealing from the station in this way must feel so guilty. (Though, it should be noted that the station is offering their programming for free, so its hard to blame listeners for doing what the station is encouraging them to do. But more on this later.)

This entire process takes a good chunk of time. By the end of it I generally wonder why I didn’t just switch to a different station, but then I wouldn’t be able to write this post.

So what leads radio stations to behave in this way? Well, they are offering a good at no price and have to find some way to make money. The world is full of similar goods that consumers have the opportunity to benefit from without paying for directly. (Think of national defense, clean air, Thunder Over Louisville, etc.) In the world of Economics these are called “Public Goods” and have two distinctive characteristics: a) they are non-excludable, meaning it is difficult/impossible to prevent people from consuming them; b) they are non-rival, meaning that two individuals can consume the same good without limiting each other’s consumption.

Based on their characteristics, Public Goods suffer from a specific problem known as the “Free Rider” dilemma. If consumers know that a good will be available to them regardless of whether or not they pay for it, they will not be motivated to pay for it. The proper way to handle this issue would be to have each person pay what the good is worth to them. However, if you try to figure out how much said good is worth to them, they will likely understate its value.

There are a number of ways to handle this problem. From a government perspective, funding for Public Goods often comes from taxes. In the private arena businesses use advertisements, sponsorships, and other similar strategies to obtain funding.

Public radio is an interesting version of a public good, because they can use advertising to obtain funding but also often try (really hard) to get donations from their listeners. While these donations do provide the stations with money, they still fail to be completely efficient. Some people who pay a significant amount per month are still paying less than the station is worth to them, while others who were guilted into paying a small amount might be paying more than the station is worth to them.

I actually haven’t donated to this station and I probably will not, because it just is not that valuable to me. (Side note: I also disagree with many of this station’s positions, so I would have a hard time justifying supporting this station from that perspective. But that is really a separate issue.) Or to say that differently, to me the most valuable feature of public radio is the fact that it is free. If a price were imposed on my listening of a certain station, I would, without any remorse, merely switch to a different station or listen to music on my iPod. I admit that I am a “Free Rider” in this situation and I am okay with that.

If radio stations were really serious about obtaining funding from their listeners, they would try to restrict their product from being consumed freely. They could create some sort of subscription and only allow paid listeners to benefit from their programming. They haven’t done this yet, and I imagine that it is because there are significant amounts of listeners like me who would not continue to consume their products if they were no longer free. There are so many free substitutes available to consumers that, unless all radio stations imposed a price, the non-free stations would likely suffer significantly in this situation.

Public radio stations are in a unique and challenging situation. And until a workable solution comes forward, they will likely continue to try to obtain funding by begging their listeners for money. Maybe the true cost of listening to public radio is being tormented by twenty straight minutes of donation requests?


I hope you found this post to be interesting and/or informative. If you agree or disagree with the view expressed in this post, please leave a comment or shoot me an email. Thanks for reading!