“Free” is a Misleading Word


Free Healthcare…Freedom…Free College…Free Will…Free…

It is easy to associate entitlement with things that are free. What could be wrong with that? If something is free, everyone who wants it should have it, right? Well, yes, right. The catch is that none of the above are are free; very little–if anything–is. Somebody pays for everything. The only question is who.

Pause for a timely definition: Have you ever heard of the need to have, “skin in the game?” A broadly useful definition of this phrase shows that we must have contributed something of value to a task before we will do our best–or even care about the outcome. Renowned investor Warren Buffett uses that phrase about stock purchases where investors use their own money to buy stocks, expressing his belief that investors make better decisions with their own money than with others’. More literally, we all know of football coaches who tell their players they want to see them get scuffed up in practice just to show they are trying. “Skin in the game” means that you are invested, and will work harder, focus more, and perform better–producing better results.

Far from being free, healthcare is very expensive (and getting more so each year), which, along with being necessary, is why it is much in the news. Healthcare will cost somebody; employers, the insured or taxpayers. And if it doesn’t cost the insured, will they value it? They will very likely use it when something goes wrong, but I am told that one of the main advantages of free-to-the-user healthcare would be the increased participation in preventative medicine education. In turn, free preventative medicine advice is supposed to lead to patients leading healthier lifestyles. Really? Will someone with, say, type 2 diabetes brought on by obesity, follow unpaid advice and do the hard work needed to diet and exercise to help with their condition when they are getting medical treatments for free? If you don’t pay, or work it off, or do something for your healthcare, you have no skin in the game.

Freedom isn’t free. A cliche? Perhaps. Truth?. Yes. In the World War II era, 12% of the population were veterans. You were either a vet, or you knew one. And you knew families where not all of their vets came home. Meat and sugar were rationed, and you could not buy tires. You had skin in the game. Today, only 1% of the population are vets. President Lyndon Johnson, the main escalator of Vietnam War, bragged that we could have, “guns and butter,” meaning that we could escalate the war, with no economic sacrifices being required at home. With an all-volunteer military (no draft), the skin-in-the-game participation has fallen drastically. Do we value freedom nearly as much as before? I doubt it. We value First Amendment freedoms, but we have never had to put skin in the game to protect our overall way of life. We take those freedoms for granted as if we are entitled to them. Wrong; we are not at all entitled to them. A basic understanding of history shows that if we are to keep our freedoms, we must fight for them. And before we will expend the effort to defend them, we must know how fragile they are. Quite the opposite of feeling entitled.

Free college is no different. If the student does not have skin in the game, they will value their education less. Again, free means only that somebody else is paying. For some students, seeing the sacrifices their parents are making to pay their way is enough for them to take college seriously. Those students respect what their parents are doing, and are grateful enough to make the best of the opportunity. These students are highly likely to do well in school–and after. Quite the opposite are the students who go through on student loans, with majors like social studies, who complain afterwards they were “ripped off,” setting the stage for a justification as to why they should not have to repay what they borrowed. Their positions is that the degree they chose from their institution they selected did not lead to a job that would pay enough to repay their borrowings. A 30-minute Google search before enrolling would have revealed that. And unpaid loans are another form of free. If something is free, what is lost if it is wasted? Remember: No skin in the game means far less effort and worse results. Warren Buffett and our football coach were right.

Free will is a fun one. We all have free will, and it is joyful to be able to exercise it. Free will allows both good choices leading to favorable results, and bad choices leading to negative consequences–skin in the game. By definition, exercising free will means that you have skin in the game.

What are your thoughts? Do people need to have something at risk before they try their best–or even try much at all?

Next week’s blog will be “Qui Bono? (Who Benefits?)”

Will Luden, writing from my home office at 7,200’ in Colorado Springs.


Will Luden
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6 Responses

  1. Charles Reply

    I agree. Very well said, and that the younger generations don’t think beyond their basic initial emotions. If they did, they might understand that “free” is not free.

  2. John Critzer Reply

    Pretty broad generalizations and assumptions here. Not sure I can get on board with this.

  3. Stephen Reply

    I remember from my childhood taking care of the stuff I paid for. I have also seen this in my own children, when they pay for something, using money they worked for, they take care of the item better.

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