George Walford: On Picking Pockets in a Respectable Way

The widespread belief, that credit cards may be used without cost to the user, is a miracle of modern advertising. With each purchase a charge is levied on the retailer. That charge is, and has to be, passed on to the customer; traders who tried to meet it themselves would be showing an insufficient return on capital and soon be out of business. That charge is, and has to be, included in the price of the goods. Prices do not vary according to whether a card is used or not; the extra costs incurred by the use of credit cards are spread over all sales, which is to say over all customers. The banks and others who issue these cards have excelled the robber barons. They have succeeded in levying a charge on retail trade generally, and they have managed to do it without most of those who pay the charge realising what was happening.

Commerce is commerce and most of us are well aware that customers need to be on their guard against trickery; if we are over-trusting we have ourselves to blame for the result. But the trick of getting people to pay without letting them know they are doing so is also worked in another field, one where many people are less inclined to be wary.

The municipal councils collect rates from householders and occupiers of business premises, using the money to provide services. A great many local voters, perhaps most of them, are not reckoned among the ratepayers, and these seem to get the services free. It can be made to look as if the council takes money from the minority who can afford it to provide services for the majority who need them.

But where do the ratepayers get the money to pay the rates? They get it, directly or indirectly, from the consumers of goods and services, and these include the people who, on the face of it, get the council services free. We are all ratepayers. Some of us pay rates directly, others indirectly, but we all pay them; all of us, rich and poor alike, are paying for the council services. Councils that claim to be providing free services are using the same technique of misdirection as banks and others who claim to be providing free credit-card facilities.

The acronymists summed it up long ago: TANSTAAFL. There Ain’t No Such Thing As A Free Lunch.

With this piece of trickery right and left do not stand on equal ground. The right proclaim their belief in economic enterprise for the benefit of individuals or special groups. They hold that it ought to be conducted in a principled way and some of them may regard the credit-card trick, after it has been explained to them, as rather sharp practice, but provided no false statements are made it is within the limits the right regard as acceptable. If the people who operate the credit-card systems are right-wingers they are acting in a way consistent with their declared beliefs.

The left, on the other hand, maintain that economic activity ought to be carried on for the good of the community as a whole and not for the benefit of individuals or particular groups. If left-wing members of local councils use the misleading claim, that they are providing free services, in order to get votes, then they are acting against their declared beliefs.

from Ideological Commentary 26, March 1987.