Defying economic reality

It seems to have come right out of “Atlas Shrugged”–Ayn Rand’s brilliant novel about the monstrous insanity of the moocher mentality. I am referring to the rather surreal political shenanigans now taking place at the University of Hawaii at Manoa.

Here’s the story: A group of graduate students are offering to support the UH faculty’s labor union strike in exchange for the union’s opposition to higher tuition rates. Both groups are rapaciously pursuing their own self-interest at the expense of economic reality, in complete defiance of normal market forces.

The UH students don’t want to pay higher tuition rates. The UH faculty union wants a significant across-the-board pay hike. Under normal circumstances, these two groups would naturally be opposed to each other, because their demands run counter to each other. Higher faculty pay would normally lead to higher tuition rates, and lower tuition rates would tend to suggest controlled faculty labor costs.

In other words, in a free market, sacrifices must generally be made; one can’t always have one’s cake and eat it too. In a free market, you generally cannot have extremely high wages and still expect to enjoy low consumer prices at the same time. Absent remarkable productivity-enhancing technology, the market generally does not work that way. There is no market Utopia.

But the University of Hawaii, as with most other government-oriented entities, does not operate under normal market forces. It is heavily subsidized by the State of Hawaii–by the Hawaiian (and, in the case of federal grants, mainland American) taxpayer.

So, you see, UH students and union faculty members just might be able to have their cake and eat it too. They are able to (temporarily, at least) defy economic reality, to defy market forces, by letting others–other taxpayers, that is–pay for their demands. Politics prevails at the expense of sound market economics.

So both the UH faculty labor union and the UH student association may gain some concessions–wage hikes and price controls–at the expense of the beleaguered taxpayer who is forced to foot the bill in the name of the “public good” (but really for the benefit of their special interest groups). Which is patently unfair and unjust.

What we have here is basically the free lunch mentality, only it is not completely free: somebody, somewhere, always has to pay for all of it. At some point, if it is carried too far, something just has to give in: The Social Security may go bankrupt, Medicare and Medicaid costs may explode, deficits may become unbearable, government offices may have their utilities disconnected, and so on and so forth.

Economic realities, natural market forces–justice itself–cannot be defied and denied forever. Sooner or later, the whole bankrupt system will have to come tumbling down, as did the Soviet Union (and as would have China had it not undertook badly needed market reforms).

Strictly a personal view. Charles Reyes Jr. is a regular columnist of Saipan Tribune. Mr. Reyes may be reached at charlesraves@hotmail.com