Distributing the Costs of Care, Part One

Can we begin with a simple premise, that a thing costs what it costs?

I know that sounds trivially true, but in fact most of the time, most of us don’t think that way. That is, we note what we pay out of pocket for an item, but don’t think about all the costs that went into what we pay.

I bought some strawberries yesterday morning. What that box of strawberries costs is the result of a whole slew of expenses. What did the farmer pay for the land, and what is the measurable (if tiny) incremental cost of one strawberry in light of those and other costs of production - water, fertilizer, labor, etc? What is the cost of processing and shipping that strawberry; of warehousing it for the wholesaler; of having it in my local market? Just because we don’t think about that strawberry’s contribution to paying the electric bill of the grocery story doesn’t mean that it isn’t there and fixed. When we remember that a thing costs what it costs, we can look beyond just what we pay out of pocket.

And, of course, we can remember that those costs are shared with others. If my box of strawberries were priced so that my purchase would sustain the market, I wouldn’t be able to afford them. If I alone were paying the fuel charges of the trucker and the labor charges of the wholesaler, that box of strawberries would be far out of reach. I can only afford those strawberries because a whole host of folks participate in distributing the costs of those expenses. That’s the difference between the economy of a large society and -  well, really, any society. Once upon a time, perhaps, there was an individual working an individual plot of land and providing only for himself, and so paying personally all the costs of having a strawberry; but once folks started living in communities and sharing resources and exchanging (even in barter), costs started getting distributed.

That’s particularly true when we find a “bargain.” If I find my box of strawberries on sale, it might be that the farmer somehow produced for less, or that diesel was temporarily down. Or, it might be that these strawberries are getting close to the end of their shelf life, and the store loses less by selling them at a reduced price than by letting them get old and not selling them at all. And, after all, the store can take that decision, not out of the goodness of anyone’s heart, but because the store can adjust prices somewhere else, and so better distribute those costs. Someone else paying a dime more for apples allows me to pay a dime less for strawberries. It costs less out of my pocket, but it didn’t cost less in the real costs of production. J, at each stage of production, one of the costs that gets distributed is losses. If one field fails, that’s going to raise the price (not the cost) of the strawberries from fields that succeed. If someone drops a box in the store and all those berries are ruined, you can be sure that the store has some calculation of how that loss can be made up elsewhere. In a market economy, those losses get covered, or the person at that level can no longer produce or provide.

A thing costs what it costs, with all those costs of production figured in, and with all those distributions of costs worked out. What it costs out of pocket is a combination of all those costs, and how all those costs are distributed.  It’s true of a strawberry; and it’s true of a medical procedure. And that’s a thought that I will explore in Part Two.