In a country far away, people often went out to restaurants to eat on Saturday nights. Some people liked steaks and therefore would go to the steakhouses and get a porterhouse or a rib eye. Others prefered to do other things with their money, and therefore would opt for chicken. A small percentage of the population – about 15% – did not go out to eat, instead opting to stay home.
Of those who stayed home, there were some who wanted to eat lobster but were not able to afford more than chicken. There will others who did not really like going out, and therefore decided to stay home instead and spend their money on other things that they did enjoy.
The king of the country was troubled by the fact that 15% of the people did not go out on Saturday night. He spoke to the ones who wanted lobster, and they told him that they should be able to get lobster if they needed it. He felt this was unfair that they could not afford to get lobster and devised a plan.
The king sent out a decree called the Affordable Meals Act, which declared that every citizen had the right to meals at reasonable prices and that if everyone were required to go out and buy meals, we would all be better off. The people who wanted lobster heard this and understood it to mean that they could get the lobster they wanted for free, or at least at chicken prices.
The others who were buying chicken were worried that the Affordable Meals Act would make them pay more for their meals or that they would not be able to keep getting chicken. (The ones who chose not to go out ignored the decree entirely, but liked the king because he they felt he was “hip.”) The king assured the steak eaters and the chicken eaters that if they liked their meals, they could keep getting them. Nothing would change and they could continue to go out and get those same meals. He told them that this was just a program for those who wanted lobster but were unable to buy it. He also said that the prices of all meals would go down overall due to the Affordable Meals Act. This satisfied many of the chicken and steak eaters.
In the dead of night, the king and his royal council prepared the specifics of the Affordable Meals Act. It declared the following:
1) Everyone must go out and buy a meal on Saturday night, or sacrifice 1% of his gold to the king.
2) Every restaurant meal must include steak.
3) Those that could afford steak must pick up part of the cost of the meals of those who could only afford chicken.
4) People who chose not to go out and pay the fine instead could opt into the plan at a later date, should they decide they need lobster.
The ones who needed lobster, without ever reading the decree, rejoiced at learning that they would now get lobster and there was great celebration throughout the land. As the Affordable Meals Act began to be implemented, however, there arose great anger.
First, the king’s court, who were used to getting lobster but paying for chicken, protested when they realized that they were going to need to pay for their lobster and some of the steak dinners for some of the chicken eaters. The king, who realized his mistake, quickly decreed that his court, many of whom made far more than the steak eaters, would continue to receive lobster at chicken dinner prices.
Next, the chicken eaters discovered that the decree required they buy steak dinners. “We like our chicken dinners, and don’t want to pay the price of a steak dinner” they said, “and you promised us that we could keep buying our chicken dinners if we wanted to. ”
“It is true you are paying more than you are now, but that is not a fair comparison,” said the king. “You were getting chicken dinners before, but now you are getting steak dinners, which are better. You should be happy to get steak dinners – you were missing out when you were getting chicken. Trust me, I know what is best for you.”
“Besides,” said the king, “it isn’t the Affordable Meals Act that caused you to lose your chicken dinners. The restaurants just chose to stop serving chicken – restaurants change their menus all of the time.”
“But the restaurants said the Affordable Meals Act said that they were no longer able to serve chicken,” protested the chicken eaters. The king ignored them, just talking about how nice it was that people who want lobster would now be able to get it. Some of the chicken eaters reduced some of their other spending to raise enough money and went ahead and started purchasing the steak dinners. Others couldn’t afford steak dinners, but made too much to receive a subsidy, so they decided to stop eating out.
Next the steak eaters, who had supported the Affordable Meals Act, got their bills for dinner and saw that the cost had gone up, to the point where lobster used to be. “We want people who want lobster to have it, but we didn’t know that we would be paying for it,” they said. “We thought you said we would be paying less.” The former chicken eaters laughed at this, with a ting of Schadenfreude.
“You can’t be so selfish,” chided the king and his court. These people need lobster and can’t afford to pay full price. They need to be subsidized. Most of the steak eaters went ahead and paid the higher price. Some could not afford to pay and decided to pay the tax and eat at home instead.
Part of the king’s plan was to coerce some of those who were not eating out to get on the dinner plan and pay for the steak dinners. He reasoned that would reduce the price for everyone since they would now be paying steak dinners too, but still not going out very often since they hadn’t in the past. Many of these individuals, however, decided they did not want to pay the high prices for the steak dinners and decided instead to pay the fine and keep eating in. This caused the prices to increase still more. As prices rose, more and more of the chicken eaters started eating in or getting subsidies from the smaller number of people still paying full price for the steak dinners.
Now that they could get lobster for the price of steak, many people now asked for lobster. The first few indeed got hot, fresh lobsters. The restaurants soon ran out of lobsters, however. In addition, since the steak eaters were now paying more, and the chicken eaters were now paying steak eater prices, many more people were going out more often to “get their money’s worth.” The restaurants soon ran out of steak as well.
The people complained to the king. “We are paying for steak and lobster, but there is not much of either. In addition, we are paying far more than we used to for either steak or chicken.”
The king, worried that the crowds were becoming restless, came out to the balcony of his palace to address the crowds below. “It is not the Affordable Meals Act that is causing the problem,” he said. “It is the restaurant owners who are charging too much. Give me what you were paying to the restaurants, and I’ll see to it that there is steak and lobster for all.”
The king secretly planned to take all of the money, buy lobster for himself and his nobles, and then give the people hamburger and say it was steak. Any who complained would have their hamburger withheld once he controlled all of the restaurants and thereby had power.
Some in the crowd cheered, saying the king was wise and kind, and that everyone should give their money to the king so that he could provide steak and lobster to them. Others said they should go to the restaurants, burn them down, and hang the evil restaurant owners from the light poles.
In the crowd, raging towards a frenzy, stood a small boy. The boy rarely said anything, many thought him to be a mute. This boy, however, climbed up upon a wagon seat and shouted to the crowd.
“Stop!” he shouted. “What are you doing? It is not the restaurant owner who is causing the shortage of steaks and lobsters and the increase in price. It is the Affordable Meals Act, which the king proposed. Now you want to give all of your money to this king that created this act that has caused you so much misery. If you give him your money, you’ll need to beg him for the steak and chicken that you used to provide for yourselves. He’ll be using your own money to control you.”
“Why don’t we try something different. How about we require everyone to set aside enough money from their wages to pay for steak, plus a little extra in a pool to pay for those who will need lobster but cannot afford it from their wages. We will not require anyone to buy steak, however, letting those who want to just buy chicken, and save the extra do so.”
“Many people will opt just for chicken or to eat at home for a while, such that when they do want steak or lobster, they will be able to pay for it themselves from their savings. They will have saved so much they’ll be able to buy all the steak and lobster they want. Those who need lobster but do not have time to build up a savings will be easy to cover because they are few in number compared to the whole population. Most people will be paying for their own meals, so the burden from those who cannot will be small. Those who want to spend their money on steak instead of chicken can do so, understanding that by doing so they would probably never be able to afford lobster.”
The people tried the suggestion of the little boy. They found that by eating in and buying chicken when they were young, rather than paying for steak every week, their savings grew rapidly. They were able to easily pay for lobster later in life – something they would have never been able to afford had they been spending all of their money on steak. They also found that the few people who needed lobster before their savings could build were easily taken care of since there were few of them.
The people realized that they did not need to king to control their restaurant spending. They just needed to save while they were still content with chicken, so that they could have lobster later in life. They discovered that it was better when everyone who could was saving for steak and buying chicken, rather than paying out all of their money for steak all of the time and the being dependent on others to provide for them when they needed lobster.
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