Finance columnist explains capitalism to children: take things without paying, then sell them

Chicago Sun-Times columnist Terry Savage happened upon two little girls giving away lemonade at their roadside lemonade stand. She was affronted at this economic illiteracy: after all, the raw materials for the lemonade had come out their parents' pockets, so they should be charging for the product! The mentality that leads to children giving away their parents' things (rather than selling them) is what has led to America's economic decline, according to Savage:

I pushed the button to roll down the window and stuck my head out to set them straight.
"You must charge something for the lemonade," I explained. "That's the whole point of a lemonade stand. You figure out your costs -- how much the lemonade costs, and the cups -- and then you charge a little more than what it costs you, so you can make money. Then you can buy more stuff, and make more lemonade, and sell it and make more money..."
No wonder America is getting it all wrong when it comes to government, and taxes, and policy. We all act as if the "lemonade" or benefits we're "giving away" is free.

Get that, kids? The correct thing to do with the stuff you appropriate from others is sell it, not give it away! Sounds about right -- companies take over our public aquifers and sell us the water they pump out of them; telcos get our rights of way for their infrastructure, then insist that they be able to tier their pricing without regard to the public interest. Corporatism in a nutshell, really.

There is no 'free' lemonade

I write books. My latest is a YA science fiction novel called Homeland (it's the sequel to Little Brother). More books: Rapture of the Nerds (a novel, with Charlie Stross); With a Little Help (short stories); and The Great Big Beautiful Tomorrow (novella and nonfic). I speak all over the place and I tweet and tumble, too.

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music man

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PS. Th nwsppr rtcl snds lk t ws wrttn by n ngry prsn wth n gnd. S ds th bng bng n.
- mdh
  
  This site is 4 (plus guestblogger) sided. Perhaps you are complaining about reality’s known liberal bias?
- Notary Sojac
  
  When I first started lurking here, there was a strong anarchist, anti-centralization flavor to the site. It was great.
  
  That flavor has been disguised of late by the near-daily Two Minutes Hate directed against conservative ideas and conservative ideas only.
  
  The idea that Democrats might be corrupt or stupid, or that centralizing health care decisions in Washington is no better than centralizing all food or energy production in one authority, is left for down-thread responders.
whoknew

Cory: a clever turn at twisting other’s words . . . or do you really not grasp the author’s point?

Sure, it seems a little harsh to come down on innocent children so hard, but she was patently NOT advocating for profiting from materials appropriated. Her whole point was that if the children had understood that the ingredients of the lemonade had cost their parents sweat to acquire, they maybe would have reconsidered giving it away. The essence of her parable is that the nanny government has allowed people to fall into the false belief that benefits have no cost, when in fact every benefit does. Her criticism has no relation to giving things away in full knowledge of the expense (i.e. charity). Her premise is that the children did not understand that there was a cost to the lemonade. Accept the premise or not, it doesn’t affect her point.

Cory, your bias against capitalism really blinded you to what this article is saying, which, to me, is beyond debate: society would be better off if we never fell into the habit of forgetting the costs of the benefits we receive from the government.
jeligula

Free beverages are usually spiked with something unpleasant. Reference Jones Town and any reasonable looking woman in a bar full of ugly men.
Anonymous

It’s worth mentionning that her website runs on a LAMP stack.
Free (as in beer and freedom) software. Goddamn communists, they’re everywhere !
Ernunnos

“…Then you can buy more stuff, and make more lemonade…”

She’s explicitly advocating purchasing the raw materials from others, not appropriating it. Did you purchase the straw for that man you’re building?
erissian

Christ, what an asshole!
Fifth

“Running on an anti-SS and anti-MC platform is the inverse of two wolves and a sheep voting on what to have for dinner. There are too many benefactors with too ingrained sense of entitlement who would become too vocal as a constituency if anyone was even thinking of abolishing these programs.

What is easier, to deny a child candy – or to give him candy every day for years then attempt to take it away?”

If only we could just turn back the clock to when the child expected nothing better than cat food and an unnecessarily early death.
Jonathan Badger

Cory provides a screenshot of the classic Apple ][ game “Lemonade Stand”. I realize that the under-40 set might not get the reference, but the point of the game is that when one is reasonably successful, “your parents” stop giving you free ingredients and you are required to purchase your own (and recover your costs) from that point forward.
tophtucker

Having just read every commentâ€”close to 12,000 wordsâ€”I just want to say that I am impressed by the quality of the thought and writing exhibited by all sides.

That is all. Good day. :)
Anonymous

She was so concerned she was too lazy to get out of here car… jeez… fat capitalist by the looks of things.
Anonymous

Bart: Sharing is a bunch of bull, too. And helping others. And what’s all this crap I’ve been hearing about tolerance?

Homer: Hmm. Your ideas are intriguing to me and I wish to subscribe to your newsletter.

-Darren MacLennan
bja009

Zyodei’s structure may be flawed, but don’t discount his point about the social contract. As far as piss-poor ideas go, the social contract is rather near the top.
Johnny Coelacanth

Macho Man Randy Savage is a good Savage, despite rapaciously snapping into the odd SlimJim from time to time.
Johnny Coelacanth

Oh and this “Two Minutes hate”? Hate? What a drama queen. If you think this is hate, you must be new to the internet.

“directed against conservative ideas and conservative ideas only.”

In case you didn’t notice, conservative ‘ideas’ drove this country into a ditch during the last administration. I say let them sack up and take it.
Anonymous

Its possible the little girls were buying their raw materials and making a profit. Water is cheap, sugar is pretty cheap and lemonade packets are cheap. Was there a tip jar? Free can be a solid business model.
Johnny Coelacanth

It’s not dat ol debbil Redistribution that caused the fiscal crisis in California; you are invited to Google ‘proposition 13 tax revolt’ at your leisure.
- Ernunnos
  
  Oh, right. The reason California is insolvent is Prop 13. Which repealed all taxation in California forever, which is why the state is now known as a anarcho-capitalist wonderland.
  
  Ha! I slay me.
  
  Just because California has limited property taxes does not mean that Californians aren’t taxed. And quite heavily too. But it doesn’t matter how much revenue you make if you can’t live within your means. And California can’t. Neither can Illinois or New York, and neither of them have Prop 13.
  
  Which is too bad, because it really does make a handy excuse, doesn’t it?
nutbastard

Everyone talks about ‘service cuts’ as if it means that the sewers will overflow and the roads will collapse and turn to dust.

I don’t have the figures in front of me, but AFAIK the kinds of services ordinary people depend on – things relating to food, water, housing and transportation – consume very little of any budget in the US, State or Federal.

The War alone has cost well over $3 Trillion. That’s three-thousand-billion.

For 2010, lets look at the essentials:

DOT: $72.5B
Dept. Health/Human services: $78.7B
DOJ: $23.9B

But then there’s the DOD ringing in at $663B

Really? $2k a head / year to keep the homeland safe? When no nation is actually at war with us? and with no guarantees of safety despite all the spending?

Social security – $669B. hey that’s around $2k / head / year as well! at this rate, by the time I’m 65, why, I’ll have over a hundred thousand dollars earmarked just for me! …right? oh no wait! SURELY they’ll give 2% interest compounded annually, right? and i’ll have more like $170,000! awesome! that’s how that works, right??

But no. No one will make huge cuts to the hugest hemorrhages. They want us fighting over scraps that fell off the table in perpetuity. They are delighted when $1m gets shaved off an education budget… and yet what’s $1m to the DOD’s $663B? If the DOD gave an additional $1m to, say, 500 educational budgets, they’d still have… wait for it… $662.5B

and i say this as a libertarian fundamentally opposed to public education! but even i know how to pick battles. even i can admit that the government’s shitty excuse for an education deserves the money more than the DOD.
- Johnny Coelacanth
  
  Thanks for that. I will refrain from telling you to write your representative in Congress.
MrJM

Perhaps my brother said it best: “There is no value in learning to interact with strangers. I’m sure after meeting Ms Savage they all deeply regretted not charging for the lemonade.”
King Coopa

If conservative ideas are so much better for the people all round then explain to me why the most conservative states (Alabama, Mississippi, Louisiana) are the biggest shit holes? Further more, there are no conservative based countries that serve as a good example that prove conservatism is a good idea. Is there any wounder why the countries with the best quality of life are the left-lying Europeans that are (GASP!) socialist?
- Notary Sojac
  
  The states that are going bankrupt (California, Illinois, New York) are difficult to characterize as “conservative”.
  
  Bankruptcy can be defined objectively. Whether or not a particular state is a “shit hole” is more a matter of subjective opinion.
  - Anonymous
    
    There are measures of quality of life other than profit, though, and usually much better than it.
  - TommyG
    
    The states that are going bankrupt (California, Illinois, New York) are difficult to characterize as “conservative”.
    
    Actually California is kind of strange that way. In spite of being a “blue” state, much of it is very, very, conservative. We are going bankrupt because we allowed the Anti-Tax’ers to pass Proposition 13. The appeal was to keep grandma and grandpa from getting kicked out of their house; the result was complete gridlock.
    - Brainspore
      
      Yeah, kind of funny how Nixon apologists and the folks who worship Reagan’s corpse never seem to remember which state elected those guys governor.
      
      I’m also sick of hearing complaints about how “Hollywood liberals” are butting their noses in politics when there’s a gun-toting GOP-approved action hero running the state.
      - Notary Sojac
        
        If you’re referring to Mr. Maria Shriver, he resembles a conservative in the same way egg creams resemble egg salad.
      - Brainspore
        
        Right, I forgot that True ConservativesÂ® have to be born here and aren’t allowed to believe in global warming.
  - tempbot
    
    “The states that are going bankrupt (California, Illinois, New York) are difficult to characterize as “conservative”.”
    
    Except that those aren’t the only states on the list. Virtually every state in the union is in dire fiscal straits. All of the country, we’ve had legislators and governors (both democrats and republicans) over-promising and under charging for decades. The only sensible approach to fixing the problem (cutting services AND raising taxes) will never be implemented because of the politics (“Don’t cut services for the needy!!” and “Don’t steal my hard-earned money!!”).
    - Notary Sojac
      
      Much of the state and local deficits are due to ridiculously excessive employee retirement plans. We’re finally realizing that they have to be on the table along with service cuts and tax increases.
      - tempbot
        
        “Much of the state and local deficits are due to ridiculously excessive employee retirement plans.”
        
        How much? Also, contrary to previous comment, states can’t actually go bankrupt.
- donniebnyc
  
  You forget that conservatism is a faith-based political philosophy. Despite years of historical evidence that conservative fiscal policy doesn’t work they still cling to their faith in the self-regulating free market and trickle down tax policies.
  
  Faith is continuing to believe in the face of contradictory evidence.
- failix
  
  The welfare state isn’t a socialist concept at all. Many socialists and socialist parties embrace it since in a way it seems to reconcile capitalism with humanist values, but to say conservative ideology is opposed to it would be factually wrong.
- astridnannerl
  
  Texas is actually doing well while California is not
Daemon

Don’t forget the step where you hire the poor kid to run the stand for you, pay him half of what he’s worth, give him no breaks, don’t give him an employee discount, and fire him if he gets heat stroke.
Anonymous

@zyodei,

So go ahead, no one is stopping you: move to an unregulated, untaxed jurisdiction.

Off the top of my head — Antarctica, bottom of the ocean, orbit.

You don’t want public services, right?

How ironic that Rand picked an *architect* as her self-made person. Architects design buildings built by huge teams of people.

Truthfully, the only example of an individualist producer would be an illustrator (though his work was made easier by materials innovation before he was born)

So are you not only independently wealthy, but capable of providing for yourself entirely without human interaction?

Wow, good for you. I prefer buying cheaply in bulk the necessities of life so I can concentrate on more esoteric interests, but I support true independence, as expensive as it must be in time and effort.
- zyodei
  
  In effect, what you are saying, is that because armed gangs have laid claim to all of the Earth, and demand the right of taxation and monopoly on violence on anywhere one might want to be, my decision of where to live are limited to “Antarctica, the bottom of the ocean, and orbit?”
  
  Umm..thanks, guy.
  
  You will remember that these armed gangs, called “states,” have gone so far as to wage incredibly bloody, protracted struggles over who has dominion over an area, that is who has the right to extract money from the people in that area. These are called “wars.”
Anonymous

But it is ok for companies to get tax breaks and free handouts just for vague promises in return.
Astin

Except she’s right.

Sure, her point of view is amoral and overblows the concept of a free lemonade stand (and I’ll assume the parents/nanny paid for the equipment and ingredients and allowed it to be free), but her point of the social safety net being “free” is right.

Where do you think your taxes go? Every government subsidy, grant, program, etc. is paid for by taxes. Every deficit budget is borrowing from future taxes.

That’s not to say that the issue of everyone thinking of a “free lunch” is the only problem. There’s an equally big one on the other side – politicians forgetting that the taxpayers pay for it all, and therefore should be seen as the owners. Government money used for something? Taxpayer ownership. So when the government builds somethings and then sells it off for less than what they paid, or for less than what they could make off it, the taxpayers are the ones being screwed.

When public employees cry out for more benefits, pay, or pensions, they’re saying “charge the taxpayers more”. If everyone on both sides of the coin (politicians and citizens) thought in terms of every dollar being spent as paid for by THEM, they’d likely be some more informed activity taking place.
Floyd R Turbo

As to your water out public aquifers example…

Is the water going to magically come out of the ground? Are you going to lay all the sewer pipes and water mains yourself? Let;s drink like it’s 1799 again with bucket brigades, pestilence, and all the other wonderful things DIY water on a wide scale come with.

I can’t believe a bunch of authors and artists who — ya know — sell their stuff for a profit and a site that has great traffic and sells ads — for profit derides capitalism so completely. You are capitalists. And that’s a compliment.

3, 2, 1….
Nadreck

So Capital only exists if it’s magically translated into little greem pieces of paper? What of Social Capital? The map is not the terrain.
Daedalus

If you want Savage to actually read your response, click her name in the article: it’s a mailto link. Then send your comment directly there. She might still ignore it, but it’ll take an active ignorance, and if there’s enough, it’ll be hard to ignore.

May I suggest a nice, pleasant e-mail including a query asking about the last time she charged for her Christmas presents, and ASCII art of a prominently erect middle finger.
zio_donnie

Give me one single example of spontaneous human cooperation that produced a complex society.

No i don’t believe that it is possible or intelligent to contract public utilities to private firms. i actually believe that we have not enough government in place. not corporate paid politicians but the independent and elected government of our constitution(s).

i believe that stuff like private prisons is the lowest point that humans have ever touched. basic rights like water, roads and electricity should be a regulated monopoly by and for the people. and everyone should contribute proportionally to his wealth.

that said you only have anecdotal evidence of your assumptions. where i come from (Greece but the same stands for Italy where i lived for 15 years) utility bills went through the roof once they were privatized but at least i don’t pay ANY taxes at all if my income is under 10k a year. also i am perfectly free to go live in a tent in the mountain since we don’t have 5 cops for every citizen and sleeping in public property is not illegal.

you are only disappointed with your government maybe rightly so. hippie communes are not the answer tho.
MrJM

“The idea that Democrats might be corrupt or stupid, or that centralizing health care decisions in Washington is no better than centralizing all food or energy production in one authority, is left for down-thread responders.”

But NO ONE is proposing that health care decisions be centralized in Washington. As the centre-right UK paper the Economist noted: “It is a funny socialism that gives private, for-profit insurance firms the main responsibility for delivering health care.” http://bit.ly/70-30Nation

So please don’t blame me if I don’t take your straw-men seriously.
- zyodei
  
  Would you rather trust “The Economist” or your own two eyes? There were thousands of pages of law in that legislation, micromanaging every little part of the process of health care.
  
  Sure, the (fascist, politically connected) insurance companies will deliver the final services (and I bet they really hate it, a law that requires everyone to buy their shit).
  
  But to think that the fundamental control doesn’t come from DC is just naive.
  - MrJM
    
    There are also “thousands of pages” regulating food safety.
    
    Do you believe that our food supply is “controlled by DC” too?
Sekino

“The lemonade is free, but nagging my young charges with your trite political opinions is $20 a minute… PLUS TAXES”

How could the nanny resist!?
Anonymous

many native tribes in Canada were unique in the sense that their status among their peers was determined by how much they had to give away rather than how much they had. Good for these girls giving away free stuff to drink. Good for these girls parents enforcing the idea of giving.
StumptownGeek

“What percentage of all the taxes collected do you think actually go to unquestionably useful and vital functions such as maintaining roads? I’d be surprised if it was 10%.”

In other words, you haven’t bothered to find out any of the real numbers and are arguing conservative/libertarian fables.

Hey, have you heard the one about how foreign aid makes up 20% of the federal budget?
- zyodei
  
  A cursory glance at the Federal Budget shows that the Department of Defense, Medicare/Medicaid, Social Security, and Interest payments make up 66% of the budget. That is not counting the other defense spending hidden in other departments, like DoE or DoJ, or “emergency” spending for the wars.
  
  So, that leaves 33%.
  
  Do you really, really think that 1/3 of that goes to unquestionably useful things like maintaining bridges?
  
  Well, it doesn’t. 10% is in fact an outrageously optimistic estimate of the share government spending that goes towards unquestionably useful services.
  - Antinous / Moderator
    
    Do you really, really think that 1/3 of that goes to unquestionably useful things like maintaining bridges?
    
    No. Which is why a lot of US bridges are disasters waiting to happen. We need to spend our money on useful infrastructure, not G20s and Olympics and useless wars.
    - zyodei
      
      Well, yes, of course we do..no sane person would argue that.
      
      My contention is that this mis-allocation of money is built into the system..that our system of parliamentary/republican democracy, even in the most modern, democratic countries, has shown to be unable to construct strong mechanisms to keep money flowing in useful directions.
      
      I mean, it’s just failed! We learned the lesson of WWI, never to fight another war…until WWII. We learned the lesson of Vietnam..until Iraq. We learned the lesson to keep money out of politics..for a few years, until it sneaks back in through some damned back door.
      
      Other than by going in the direction of draconian punishments for corruption/bribery/”campaign finance” (like the death penalty), I simply don’t see how this pervasive influence of corrupting money can be kept out of our political system over the long term.
      
      The answer, as I see it, is radical decentralization. Putting as much power as possible in local hands, where people can talk on a face to face level about how things should be solved. If some communities want to try more anarchist/libertarian/non-coercive strategies, fine. If some want to try more liberal/state services strategies, fine. The key would be that people could freely move between them, to favor the systems that were working better.
      
      What the world needs is an era of radical social experimentation, so that we can see what strategies really work best for solving common social problems.
Anonymous

Why the profit and to acumulate so important?
How far will it go?
Until all natural sources are gone?
For what?
To have more cars than we need?
To eat junky food?
To believe you are what you have?
And who pay this bill?
nature. future generations. human kind.
All because you think you have to have more. But you will never own life, nature, friends.
It is priceless.
You should thank the girl and hug her.
You should tech her how to palnt a lemon tree. How nice is to share and have juice when you are thirsty and to have nice things to have a confortable life, just enough to have health and hapiness, not enough to fullfill stupid loneliness of people who belives that have to have things to be and feel important.
SeanTheSean

Haha, this is exactly the “origin story” of the main character in Iain Banks’ The Business.
mgfarrelly

Savage can often be found in the Chicago media speaking the “Savage Truth!” as she calls it. This generally consists of the “Less taxes for the rich, buy stocks and stop wasting our money on all those freeloaders”

Y’know, the mentality that nearly scuttled the US economy not too long ago and gave us this long “Savage” economic collapse.

I think if someone explained the idea of public libraries or open source to Terry Savage she’s disintegrate into a pile of Ayn Rand novels.
SeanTheSean

Also, any money you like says this never happened – it’s obviously just a shitty allegory to segue awkwardly into some hippie-bashing.
bobhughes

While we’re at it we spend way too much money on fire departments. If someones house catches fire the FD should bring a credit card swiper and make sure they can pay before starting to extinguish the house. Cat stuck in a tree? That’s what storms are for. Heart attack? Find someone to carpool to the hospital with if you’re too weak to drive yourself, ya hippies!
- Notary Sojac
  
  I think it would be a great idea to have line-item referenda on this sort of thing, let the voters rank their priorities:
  
  ___ Active duty fire and police
  ___ Classroom teachers
  ___ School administrators
  ___ Social services functions
  ___ Libraries
  ___ Government retirement programs
  ___ Infrastructure maintenance and upgrades
  
  I’d be happy to abide by the result.
  - failix
    
    Uh yeah, sounds like an extremely irresponsible and dangerous thing to do. Remember: A large number of Americans thinks even health care shouldn’t be payed for by taxes. Who knows what sort of priorities you could end up with?
Anonymous

She was a hypocrite. She GAVE AWAY her advice for free !!

That advice was obviously based on her education which she had to pay for

How does she expect others to follow her lead when she is so plainly a socialist herself ?
Astragali

She’s a complete twit (minus the “W”). I went to leave a comment on the “buzz” page for the story, and there’s naturally comments on both sides of the fence. Chances are she won’t read any of them anyway. People like her make me sick to my stomach.
Jexy6

I actually thought this was a joke when I first read it. Amazing stuff.

I mean, with lines like these, it’s almost too good to be true:

His fiancee smiled and commented, “Isn’t that cute. They have the spirit of giving.”

That really set me off, as my regular readers can imagine.

“No!” I exclaimed from the back seat. “That’s not the spirit of giving…”
bat21

I hate to break it to you idealistic hippies, but the entire state of Illinois is run this way. Illinois enters a state of insolvency
- mgfarrelly
  
  Actually the cause of the insolvency lies with the fact the last governor punted the state’s debt into the future (costing the state billions) and the pension program has been run haphazardly for years. Add the corruption problems in the state and the bad situation only becomes worse.
  - bat21
    
    Illinois’ pension plan is unusually generous and completely tax payer funded. I know a man who has 5 pensions! He’s not a connected player. He had 5 different jobs and held each of them long enough (at least 3 years each) to qualify.
    
    When Blago was governor, he gave away things like mad. Free healthcare for children! Free public transportaion for seniors! Now our legislature and governor (all Democrats) are too chicken to end any of these programs. Whenever they try to cut a program, no matter how small, a local TV reporter will trot out a small child in a wheelchair or a very elderly person in a wheelchair and talk about how this poor, defenseless soul’s life will be devastated if the cuts happen.
    
    When you give away something that’s not yours, it’s not giving. It’s stealing.
    - tad604
      
      taxes != stealing repeat this to yourself until it gets through your skull. They’re two different words, with two different meanings. Argue your side based on the merits of your argument. Stop playing stupid linguistic games.
      - zyodei
        
        Right, one is taking something usually through threat of violence. The other is taking something through threat of imprisonment.
        
        If I live in a village of 100 people, and 51 of us in a group decide to go loot the local grocery store, is that the a justified “democratic” action? Or is it theft?
        
        What if we have a “vote” beforehand, and elect a few of our members to write a “law” saying that looting the grocery store is legal? Then, is it no longer theft, and now morally justifiable?
        
        P.S. With regards to the title, Cory, I think you made a mistake.
        
        “Finance columnist explains capitalism to children.”
        
        should be
        
        “Finance columnist explains state capitalism/fascism to children.” Now it’s accurate.
      - tad604
        
        Taxation is not theft. Stop playing stupid word games. You use resources that are collectively owned you pay for them.
      - nutbastard
        
        “Taxation is not theft. Stop playing stupid word games. You use resources that are collectively owned you pay for them.”
        
        Ok. I use the roads – but taxes on fuel and vehicle registration cover that, no?
        
        I’m more than happy to pitch in on emergency services. I can’t think of anyone who wouldn’t.
        
        Clean water, courts of justice and electronics that play nice? Yes, yes, and yes.
        
        Having money taken out of my paycheck for a compulsory ‘retirement’ program of which I’ll never likely see one cent, and even if i did it would be atrophied by inflation and doled out in pittances IF i manage to make it past 65?
        
        Having my hard earned money perpetuate the war on drugs?
        
        Using it to fund the invasion of foreign countries?
        
        No, no, and no. There are no ‘services’ there, and in fact my money is being used for things I feel are a disservice to society. Against my will.
        
        You know why they take money out of paychecks BEFORE the check gets to the person who earned it? To make tax protest impossible. If taxes were PAID instead of TAKEN then the will of the PEOPLE would actually mean SOMETHING.
        
        Also, the people who enacted Income Tax are all dead. Is it not time for another vote? What is tyranny but when not a single living citizen has had a say in the law of the land? We’ve enough foolishness among the living – must we also harvest it from the dead??
      - Notary Sojac
        
        Good idea.
        
        No more withholding, pay in full cash, check or credit.
        
        And change tax day from April 15 to the first Monday in November.
    - Anonymous
      
      “Illinois’ pension plan is unusually generous and completely tax payer funded. I know a man who has 5 pensions! He’s not a connected player. He had 5 different jobs and held each of them long enough (at least 3 years each) to qualify.”
      
      Man, I wish I had one of those. I’m the rare person who does have a pension. Now that I’ve worked in the same place eight years, I could leave and, when I retire, I’d get around a hundred dollars a month. If I say 20 years, I’d theoretically get a little more than Social Security is going to pay, but not enough for a really comfortable retirement. That, and who knows whether any pension is going to stay solvent. So I put lots into a 401(k)-type deal, but with no employer matching.
      
      I do work for the State of Illinois. The pensions only started to look generous when the stock market went down. Before that, everyone wanted a 401(k) equivalent. I’d still rather have one, because those have to be funded with real money. A person could have 5 pensions, but they’d only add up to one 40-year pension. Most employees pay something like half the pension contribution. I don’t, but my salary reflects that. In my agency, people regularly leave for the private sector for economic reasons–although they all say that the work is less interesting.
      
      It’s not bad to work for the State of Illinois, but the amazing generosity of the pension system that people are always describing is just not part of my experience.
dreamfish

One option is to study Cory’s comments and respond to them critically.

Another would be to point at him and shout IFYOUDON’TLIKEITMOVETORUSSIA!!!

(BTW the second one is generally known as the ‘Glenn Beck Response’).
- Znaps
  
  The Glenn Beck Response is more like
  
  “CORY DOCTOROW. Think about it. Doctor. R-Y. Obviously this guy is shilling for the Nazi Obama Socialist GET OFF MY PHONE GET OFF MY PHONE GET OFF MY PHOOOOOOOONE who only supports so-called ‘Public Healthcare’ in order to line his own pockets without having to work for a living and hustle like a REAL doctor should. GO BACK TO RUSSIA, YOU NAZI SOCIALIST!”
  - Hex
    
    GO BACK TO RUSSIA, YOU NAZI SOCIALIST!
    
    No no no… go back to Canada. (This is the Glenn Beck response condensed into one universal forum macro.)
Anonymous

#47 & #104 FTW. I probably wouldn’t pay more than 50Â¢ for lemonade, but if I saw some kids giving it away for free, I’d think “how nice” and put a buck in the tip jar. Now that’s a smart business model. If I were the kids’ parent, I might think it’s totally worth it to me â€“ for the cost of some lemons & sugar, they have something fun to do all day, while I can catch up on my “Oprah” or whatever. Both scenarios are modern capitalism.
zio_donnie

When i was 8 i my father bought me my first bike and i took it for a spin in the neighbourhood. There were a lot of kids and i wowed them with my new ride.

Then someone asked me to borrow it for a bit. I started charging 10 drachmas for a ride around the block. I was doing quite well until my father came to check on what i was doing. When he found about my little business he was royally pissed off. My punishment was to stay there and see all the kids riding my brand new bike (for free) until sunset.

That’s a true story and a lesson i will never forget. It also made me a better person.
- Anonymous
  
  Your father was right, but it was simply an age-specific “right.”
  
  You are given things as a child. Later, when you have to work for what you have, you need a way to finance charity if you choose to keep giving things away.
  
  And perhaps as a young child, you would have taken your “ill-gotten gains” and bought the kids ice cream?
  
  What a lesson that would have been for your father, huh?
secretmojo

INVOICE FOR MR. SAVAGE:

Lemonade: complimentary
Listening to your bullshit: $533.87

Please pay in full by end-of-month, as we need the money to give away more lemonade.

Sincerely,
The Kidz
Patrick Dodds

Christ bat21, it sounds like you live in Cuba. Imagine, free child health care! Free public transport for old people! You’ll be telling me next you’re allowed to breathe for nothing. Where did it all go wrong?
dbarak

Ah, but fellow traveler, how much did they pay you to write this blog post?

There’s nothing inherently wrong with some capitalism or some socialism.
hungryjoe

If someone will tell me where this lemonade stand is, I will go set up a stand next to it and become a lemonade reseller. If you have nothing, figure out what’s free and sell it, right?

I’m just not so sure you can ever get away from Capitalist forces. It’s not as if the City of Durham gives me free water from our public reservoirs. They bill me for it monthly. And that’s besides the taxes I already pay.

This is not an endorsement of capitalism, just a concern about its inevitability.
tad604

I thought the article writer was a first class douche-bag. However, I think it’s implicit in his argument that the lemonade stand operators would pay their parents back out of the profits.

I also think the article writer misses something important. He says the girls are only giving away things that don’t belong to them and this isn’t true either. They are giving up their time and energy to selflessly help others.
- arkizzle / Moderator
  
  Terry Savage is a woman.
Anonymous

One thing I haven’t heard in this scenario (that I have in other ‘free lemonade’ situations is this):

Someone approaches the kids for free lemonade and makes a donation, which commonly exceeds the price the kids would have intended to charge anyway. Has anyone spoken with the kids to see if anyone before Terry Savage came along and got lemonade? If so, did they take it for free, or give money? That would be my guess, considering this was an rather ‘upscale neighborhood.’
zyodei

I don’t understand how modern left liberalism has fallen into such a moral abyss.

Taxation IS appropriation, and that IS the problem. Sure, if you appropriate something, I guess it’s better to give it away than charge for it. But the moral failing doesn’t come about when you decide what to do with it. The moral failing comes from the act of appropriation itself.

Let’s say I go stick up some lady, and have two choices of what to do with the money I steal. In the first case, I buy a bottle of vodka and drink myself under the table. In the second, I give the money to a hungry homeless person. Is there some great moral difference between the two? Am I a criminal in the first instance and a hero in the second? No, I’m a criminal in both. The moral crime was created when you appropriated the thing in the first place.

Theft is always wrong. Taxation is theft. The “Social Contract” is fraudulent because A) a child does not have the authority to sign a contract, and no adult I know signed anything, B) saying that one must leave their homeland in order to escape this contract they never even signed is cruel and inhuman, and C) the government has always ultimately served the interests of those with money.

There was a time, not too terribly long ago, when the left, the radicals, those who dreamed of a better world, embraced liberty, and agitated for a smaller government and reduced power institutions.

Unfortunately, they all got snowballed by the propaganda of the power elites sometimes in the first half of the 20th century.

Our code of laws allowed corporate entities to arise that became so powerful that we felt we needed government to protect us from them. All along, we ignored the fact that it was government policy itself that allowed these corporations to become so powerful. And thus, we have seen almost a century of hyperbolically escalating government power and corporate power, hand in hand.

As for the actual article itself, it’s nonsense. The parents gave the lemons voluntarily. The kids are giving the lemonade away voluntarily. There was nothing appropriated in the first place. This instance, giving away something you were freely given, is called “charity.” And “charity,” “community,” people voluntarily looking out for each other and helping each other, is the best antidote to this statist hell we have created for ourselves. This sort of shallow Republican rhetoric does nothing to solve the situation.
- Anonymous
  
  Yes. Maintaining our social infrastructure, roads etc is *exactly like* robbing some lady.
  
  Awesome story, dude.
  - zyodei
    
    You’re right. It’s an imperfect analogy.
    
    A better analogy would be a mafia that takes hold over some geographic area. It extorts businesses for “protection” money and engages in other criminal activities (counterfeiting, etc) in order to sustain itself.
    
    In order to win over the support and loyalty of the population, it gives out some small fraction of this money to local people, builds roads and schools, etc.
    
    What percentage of all the taxes collected do you think actually go to unquestionably useful and vital functions such as maintaining roads? I’d be surprised if it was 10%.
    - Znaps
      
      Given the current debt crisis, wouldn’t it be like the Mafia taking over an area, providing important services such as maintenance of communal assets, taking care of (other) dangerous criminals and protection for the citizenry, giving money to those who are unable to work due to age or disability, provide services which make finding work easier, provide some rudimentary health care in the form of emergency rooms and free clinics, etc etc etc…
      
      “extorted” some protection money and then spent, apparently, billions more than they were due?
      
      Also, the US foreign aid budget wouldn’t need to be so big if they weren’t supporting Israel.
      - zyodei
        
        Umm..have you been paying any attention? How much money did the top investment banks walk away with as a result of this crisis? Would it be counted in billions, or trillions? You really think they gave away anything like that in fucking food stamps?
        
        Not to even mention the part this banking/government cartel played in the crisis in the first place..with a decade of artificially low interest rates, all sorts of moral hazards, implicit US federal backing of feddie and frannie to go to las vegas for a drunken bender, etc.
    - greenglyph
      
      While I’m philosophically opposed to your conclusion, you do make some interesting arguments. How do you feel about people claiming ownership of a piece of land?
      - zyodei
        
        Well, to be frank, I’m on the fence about that. That single question is probably the chief division between left-anarchists and right-anarchists, and I feel they both make good points. So, to that question, I’ll just cop out :)
    - Brainspore
      
      I’m beginning to think that analogies aren’t your strong suit.
      - zyodei
        
        Well, let me flesh that analogy out a bit more.
        
        This mafia doesn’t just work alone, they also partner with/ co own various local business owners, and enforce rackets in their markets.
        
        Two principal ones are Bob’s Pharmacy shop, and Seedy the dope dealer.
        
        For both of them, the mafia “takes care of” their competition, and ensures that their prices can remain high and their profits remain vast. There’s also “Garth Smasher’s Guns & Ammo”, and the mafia ensures that his cash register is always full and his guns are used to knock over surrounding communities (countries).
        
        They even own the local bank, and through it print as much currency as they want, while smashing anyone who tries to make a competing currency that is not subject to this counterfeit cannibalization.
        
        As a further step to gain the trust of the community and keep a violent mob from burning down their mansion, the mafia even lets the people choose who will be the Don every so often – they can either choose from the Corleone family or the Genovese family.
        
        Actually, any old person can gain an office in the mafia, as long as they follow along with the basic structures of the mafia, don’t rock the boat too much, and most importantly don’t threaten any of the most lucrative and important rackets.
        
        Does that make the analogy any better?
- Anonymous
  
  @zyodei
  
  “Let’s say I go stick up some lady, and have two choices of what to do with the money I steal. In the first case, I buy a bottle of vodka and drink myself under the table. In the second, I give the money to a hungry homeless person. Is there some great moral difference between the two? Am I a criminal in the first instance and a hero in the second? No, I’m a criminal in both. The moral crime was created when you appropriated the thing in the first place.”
  
  Wait; your whole premise is broken; first. Do you and your gang protect the old lady from other gang members from out of town? Do you prevent forest fires from killing her cats? Do you pave and maintain her drive way? Do you fund the clowns for the block party? No? Did you do that before you took her money? Did you provide babysitting for her kids? Libraries? Protection from cougars?
  
  Your premise is flawed; taxes pay for services; it’s not taking cash from your pocket and putting it in the hands of others (though it may seem this way)
  
  If you being from the idea that the tax is theft; it’s apparently easy to believe the government is a crook.
- zio_donnie
  
  ehm sorry to busrt your bubble but how do you think that stuff like roads, trash removal, hospitals, clean water and armies are paid for? i suppose that you want all that stuff, yet you don’t feel like paying for them and you feel “robbed”.
  
  taxes are the price you pay for living in an organized society. if you don’t want to pay taxes just go live in a cabin on a mountain and live of the land. i am sure that noone will bother you.
  - zyodei
    
    So, you don’t see any way for people to come together and organize, to provide all of those mostly necessary services (all except the last), without resort to violence, to forcing our neighbors to buy in even if they don’t want to?
    
    Do you really think that instituting a monopoly, and a monopoly that can never be challenged in any way and is not subject to any forces other than the molasses slow and corrupt political forces, is the best way or providing these services?
    
    Do you really think it is worth imprisoning your neighbor and/or leaving him homeless is a reasonable response if he does not want to buy into these monopolized services?
    
    If so, I feel pity for your lack of faith in human cooperation and creativity.
    
    It seems to me that communities, being organized of groups of individuals, who collectively choose to contract out these services to competitive firms is a much better solution.
    
    Not the Republican model of “privatization,” of course, where the state retains control and gives all the money to a politically connected company.
    
    It seems to me that a penalty for not paying your dues in the community should be some sort of loss of standing in the community, rather than the property confiscation or imprisonment we now rely on.
    
    In most towns, the garbage collection is private, while the police are state provided. Which group does a better job? Where I’ve lived, the garbage seems to get collected OK, while the police go around shooting and terrorizing people without repercussion, and crime is rampant.
    
    “go live in a cabin on a mountain and live of the land.” – except that either I will be on forest service land, in which case I will likely be forcibly removed..or I will be on private land, in which case I will often be subject to property taxes.
    
    Which is to say, no, it is virtually impossible to live anywhere without paying some form of taxes. And if I, and my community, want to provide the bulk of the services you listed on our own, and don’t request any assistance from any governmental organization..well, that “assistance” will likely be given whether we like it or not. For instance, if we tried to organize a militia to provide for our communal defense (as was the vision for America, where the founding fathers talked about autonomous militias and distrusted standing armies), we would likely all be dragged off to prison or worse.
    - Paul Coleman
      
      I’m going to focus in on this statement:
      
      —->So, you don’t see any way for people to come together and organize, to provide all of those mostly necessary services (all except the last), without resort to violence, to forcing our neighbors to buy in even if they don’t want to?
      
      While I agree that some of these services (like garbage collection) can be and are often handled privately, there are other infrastructure building initiatives that just would not happen without the government. The easy one is the interstate highway system. The other one was rural electrification in the 1930′s. The indirect economic benefit of both of those projects has been immense, but if a company or even a group of individuals were to take it on they’d have no way to recoup the costs without charging exorbitantly. If you want a modern analog, look at the current state of broadband in the US.
      - Notary Sojac
        
        Federal spending in the late ’30s was about ten percent of GDP. And we got a LOT of GREAT infrastructure for that ten percent.
        
        Federal spending in the mid ’50s was about seventeen percent of GDP. And we got a GREAT interstate highway system for that seventeen percent, plus a military far larger than what we have today.
        
        Federal spending today is about eighteen percent of GDP, and is projected to hit twenty percent in the next few years. We are not getting national broadband for that twenty percent. Hell, we aren’t even getting maintenance on the infrastructure that was built in the 30s, 40s, 50s and 60s.
        
        So when the three percent of Americans that pay forty percent of the taxes (not including me) and the other fifty percent that pay the rest (including me) ask “what are we getting for that money?”…infrastructure can NOT be the answer.
      - jetfx
        
        “So when the three percent of Americans that pay forty percent of the taxes (not including me) and the other fifty percent that pay the rest (including me) ask ‘what are we getting for that money?’”
        
        Terrible income inequality is what you’re getting. Three percent pays forty percent not because of steep progressive taxation, but because they own that large a share of the national wealth. Even at a flat tax rate, the 10% who own 80% of the financial wealth are going to pay 80% of the taxes. It’s just plain math.
      - Notary Sojac
        
        Nonsense. “Wealth” is not taxed in America. INCOME is taxed.
        
        If I had a vault like Scrooge McDuck’s, and just swam in my ocean of greenbacks and bullion all day, never investing a red cent, I would be liable for zero federal taxes on all that moolah.
        
        And if I gave you, or my grandchildren, half of what I had, it’s not me that would pay the tax on my wealth, but you who would pay the tax on that as income.
        
        Under a flat tax system everyone would pay tax on their income. I don’t insist we go that far, but having nearly half the wage earning population pay no income tax whatever is just not sustainable.
      - Anonymous
        
        Whence comes the figure that almost half of wage earners don’t pay income tax?
      - jetfx
        
        Speaking specifically of income, the top 1% of households pulled in about 18% of the national income in 2005. So the top 3% paying 40% of income taxes does not seem unreasonable under the mildly progressive tax regime the US has.
        
        http://en.wikipedia.org/wiki/File:Share_top_1%25.jpg
      - Anonymous
        
        Nonsense. “Wealth” is not taxed in America. INCOME is taxed.
        
        Income is taxed in the form of income taxes, of course. Some other forms of wealth are taxed as well. Money in a vault is not, for instance, but Scrooge’s vault itself would certainly be subject to some sort of property taxes.
      - grimc
        
        The states that are going bankrupt (California, Illinois, New York) are difficult to characterize as “conservative”.
        
        Yeah, well, those evil liberal states foot the bill for rock-ribbed conservative states. Look it up. The majority of “blue” states put in more to the federal kitty than they receive; while the majority of “red” states are…hmm, what’s the word that’s all the rage among the right these days…oh yeah: Parasites.
      - IronEdithKidd
        
        I came to say the same. I’m a taxpayer in the 5th highest donor state.
        
        If the conservative way of life is so great for all humans, why can’t they manage to live conservatively without my money supporting them?
      - Ernunnos
        
        It’s liberals who think redistribution is such a great idea, so no, people in liberal states do not get to complain that the system they asked for doesn’t quite work out in their favor. At least, not without a little ridicule at their hypocrisy.
        
        As far as I’m concerned, you can keep your money. Let’s end this redistribution. I never asked for it in the first place.
        
        And even if we did that, states like California, Illinois, and New York would still be insolvent.
      - zyodei
        
        Because, in short, the “conservative” party in this country are a bunch of fundamentalist, corporatist, war loving, corrupt crooks who are every bit in love with the state as the Democrats.
      - Antinous / Moderator
        
        Because, in short, the “conservative” party in this country are a bunch of fundamentalist, corporatist, war loving, corrupt crooks who are every bit in love with the state as the Democrats.
        
        In what country?
      - zyodei
        
        *shrug* well, most countries I guess :( Of course, I was talking about America. But I don’t know that it is that different in any other countries..most other “conservative” parties seem to be pretty well in line with corporatist republicans.
      - Notary Sojac
        
        “Parasites”… I completely agree.
        
        Let the states (either their taxpayers or their governments, as the voters prefer) keep more of their own money without passing it through the Washington filter. There is no requirement in the Constitution for California to subsidize Alabama.
        
        This would also help to end the blackmail whereby the federal government forces the states to enact certain laws (the late, unlamented 55mph speed limit being one of the most egregious) under pain of having the state’s own money withheld from it.
        
        By the way, that speed limit is a great example of a bad law enacted under Republican president and repealed under a Democrat. There have been a few….
      - StumptownGeek
        
        What are we getting in now for the 18% of GDP that is current Federal Spending that we weren’t with 10% in the 1930s?
        
        Senior Citizens who aren’t in poverty.
        
        Social Security and Medicare expenditures alone will equal almost 8% of projected 2010 US GDP.
        
        If we were to eliminate Social Security and Medicare we’d be back to your glory days of approximately 10% of GDP for federal spending.
        
        Feel free to run for public office with the elimination of Social Security and Medicare to decrease the size of the federal government as your campaign focus. According to all the best libertarians/conservatives/tea-partiers this should be a winning strategy.
      - zyodei
        
        But…we can’t AFFORD that.
        
        Medicare, for instance, is projected to consume something like $36 TRILLION over the next 75 years. Actually, it will cost more than that – that’s just the share we don’t know how to fund right now.
        
        So, in effect, we are impoverishing our unborn youth to help the elderly be well off. I don’t want to see grandma starving..but there’s something pretty damn cynical about this whole system.
        
        Government programs, especially those on a federal level, always start small..and get bigger, and bigger, and bigger..often absurdly so.
        
        Hell, Medicare originally cost $3B a year (1966). It was projected to cost $12B in 1990. In 1990, it actually cost $107B – almost ten times more. Today it’s about $440B – a 15,000% increase in 40 years (not counting inflation).
        
        The real question is, can it really be said that seniors are more healthy?
      - StumptownGeek
        
        “Can it really be said that seniors are more healthy?”
        
        Yes.
        
        In 1935 life expectancy for a 65-year-old in the US was 11.9 years. Active life expectancy (with no serious disability) was 8.8 years.
        
        In 1999 life expectancy for a 65-year-old was 17.7 years. Active life expectancy was 13.9 years.
        
        By 2015 life expectancy for a 65-year-old is projected to be 20.4 years, and active life expectancy to be 17.0 years.
        
        http://iussp2005.princeton.edu/download.aspx?submissionId=50729
      - nutbastard
        
        “Feel free to run for public office with the elimination of Social Security and Medicare to decrease the size of the federal government as your campaign focus. According to all the best libertarians/conservatives/tea-partiers this should be a winning strategy.”
        
        The roots of SS and MC run deep these days. Almost everyone knows someone on the receiving end and all of us know people on the giving end.
        
        Running on an anti-SS and anti-MC platform is the inverse of two wolves and a sheep voting on what to have for dinner. There are too many benefactors with too ingrained sense of entitlement who would become too vocal as a constituency if anyone was even thinking of abolishing these programs.
        
        What is easier, to deny a child candy – or to give him candy every day for years then attempt to take it away?
      - Notary Sojac
        
        A quarter century from now, Medicare and (to a lesser extent) Social Security will resemble the programs of today only in name.
        
        The demographics are not likely to be defeated; two workers cannot support one retiree while maintaining the lifestyles that all three have come to expect.
        
        But because both parties have resolutely failed to confront this fact, I expect us to drive the entitlement train full speed until the wheels fall off.
      - Anonymous
        
        Not even in name! You are forgetting that, a quarter century from now, all US programs will be named in Esperanto.
    - ahankinson
      
      You sound like you’ve just read an Ayn Rand novel, and now you’re in the “preachy” post-phase. We’ve all been there.
      
      Show me one country that is better off because they *don’t* pay taxes, and you might have a point. You’ll be hard-pressed to find one, though. If you look at the world Standard of Living scale, it’s pretty obvious that higher taxes often lead to a better quality of life.
      
      Your vision of a tax-free society only works in the abstract. If everyone opted out, and only paid for what they used you would constantly be bombarded with paying for every single little thing. Want to buy a new computer? You’ll have to send it off to the FCC to make sure it doesn’t interfere with other devices. Want to listen to the weather report? You’ll have to pay for that privilege. And that’s if you don’t die because your water or food inspection contractor decided to cut corners a bit to make a little more profit.
      
      If we went that way, here’s how it would play out: People would be grateful at first for their increased paychecks. Then, they would realize that they’re actually spending more than they’re making on just getting by, since (without regulation) all the corporate middlemen can pretty much charge what they want for essential services (food inspection, civil protection, etc.)
      
      At some point, someone would then say “Enough is Enough!” and advocate for a more centralized payment system, whereby everyone pays into a pool and then the essential services are paid out of that. Very quickly, the service providers would get out of billing the clients directly (since dealing with individual accounts is a huge overhead), and then just bill the centralized providers.
      
      At some point, a centralized provider thinks “Hey, I’ll get more money if I just buy up all these services” and proceeds to centralize even further. Not to be overdone and to protect themselves from paying their competition, all the other centralized providers start doing the same thing. Then the centralized providers start buying each other out until we’re left with only one or two big, national service providers.
      
      At this point, they’re so huge they’re too big to fail, since the services they provide to everyone is integral to their daily lives. Their customer services is shite. Trying to get someone to come take away your trash properly takes weeks, your appliances are constantly causing small fires due to improper inspection, your children are in the hospital from food poisoning and you’re getting charged an arm and a leg for their hospital stays, and nobody at the centralized services corporation could give two shits about you, since you can’t do a thing about it.
      
      So you appeal to the government to take over central services corp. Under the government, you could at least complain to someone whose job depends on your happiness and the happiness of others in your community. (If not, you vote them out!). The government, not having any money from taxes, appeals to its citizens for money to buy out CSC. They all pay into a pool, which eventually raises enough money to buy them out.
      
      You can probably fill out the rest of the story from there. Bottom line: You don’t really know what you’re asking for.
      - Creperie
        
        If you look at the world Standard of Living scale, it’s pretty obvious that higher taxes often lead to a better quality of life.
        
        Correlation != causation. It seems to me perfectly credible that a better quality of life leads to higher taxes.
    - dculberson
      
      zyodei, ask Somalia how your proposed structure works for them. They’ve been working that way for a while, and I’m sure they’d be thrilled to give you some feedback.
      - musashi74
        
        Well – just to play devil’s advocate – the Ludwig von Mises institute repeatedly, and proudly, beats the drum that Somalia’s free-market system is one of the more robust in that part of the world – and that quality of life has actually increased in the absence of a central government.
        
        http://mises.org/daily/2701
        
        Of course, I don’t see a single one of those Libertarian nitwits flocking to Somalia’s supposed free-market paradise.
      - zyodei
        
        Well…wikipedia would seem to generally with that estimate. The main problem there is long periods of grueling war, rather than a terrible economy. Maybe it is just written by a bunch of anarcho-capitalist editors, but I have read a UN report basically coming to the same conclusion.
        
        http://en.wikipedia.org/wiki/Economy_of_Somalia
      - musashi74
        
        I’m not denying that they’ve got their figures right, but it doesn’t make Somalia a nice place to live. When Thomas E. Woods, Jr. buys a summer home in Mogadishu, I’ll convert.
      - SKR
        
        Musashi, are you the same musashi from TTI?
    - Anonymous
      
      “It seems to me that communities, being organized of groups of individuals, who collectively choose to contract out these services to competitive firms is a much better solution.”
      
      In practice, the private trash collection example actually completely undermines your argument. It is instead a good example of how theoretically perfect markets don’t work so well when they get bogged down with real world details.
      
      Case in point: I live on the border of two nearly identical major metropolitan cities. In one city, the government provides trash collection for the entire city (paid for through a direct service fee); and in the other, residents are free to contract with whomever they choose. When the city provides it, the service is uniform, organized and actually cheaper to residents due to economies of scale.
      
      When it’s up to each resident to pick a collector themselves, you end up with a clusterf*ck to put it bluntly. On small residential streets you can have 4 or 5 different companies clogging up the street several days a week. Each hauling company has different rules about what they collect, so you get people trying to sneak trash into their neighbor’s bins, or worse yet, dumping it across the border.
      
      The upshot is everyone who lives in the city with collector choice hates it and complains to the government to fix the problem. However, these huge multi-national waste management (i.e., mobbed up) companies have a strangle hold on the process, making it very difficult to back out now.
      
      The free market model is just a model. The real world operates differently than the examples in your intro to microeconomics text book.
UncaScrooge

Looks like those kids gave a column idea to Terry Savage for free. And she appears to be quite happy with the gift.
sapere_aude

I think this is how it’s supposed to work:

http://i.imgur.com/D3d2K.jpg
- zyodei
  
  Republicanism / Corporatism / State Capitalism in a nutshell. Brilliant. Sometimes I forget how profoundly great Calvin and Hobbes really was…
Anonymous

“”No!” I exclaimed from the back seat. “That’s not the spirit of giving. You can only really give when you give something you own. They’re giving away their parents’ things — the lemonade, cups, candy. It’s not theirs to give.”"
But you can sell something you don’t own? Really the only difference is how you prioritise the problems of “People are thirsty” and “I don’t have enough cash”. And anyway, even if you want to be totally rigorous about it and say that actually the parents are giving away the materials, the children are supplying the labor that converted the materials into lemonade, and in doing so some of the value of the lemonade is wholy due to the children’s activities and therefore belongs entirely to them.

The more I think about this the crazier she seems. What next, will she say charities are killing America because they don’t earn money, they get given donations for free which is impossible for some reason.
nutbastard

and if anyone tells me to write my congressman i swear to god i’ll brain you with a tire iron.
- Abelard Lindsay
  
  and if anyone tells me to write my congressman i swear to god i’ll brain you with a tire iron.
  
  Lighten up, Francis.
Anonymous

hey just be glad they’re not learning from Goldman Sachs. ‘Cause if they were, they’e be maintaining that the way to deal with the fact that the lemmonade is contaminated with 10% urine would be to mix 10 glasses that were each 10% contaminated and voila now each glass only has 1% contamination.
mmbb

savage’s lecture means nothing; she should have offered two shiny coins to buy all of their inventory, then offered some other neighborhood kid one shiny coin to resell it for actual money. now that’s capitalism.
WizarDru

Wow. Someone came loaded with their own agenda, I guess. Heaven forfend that children just PLAY. No, this has to be a lesson in economics. Of course, never mind that most Lemonade Stands are NOT PROFITABLE, Terry.

If the kids had charged $1 a glass, would Savage have asked how much they were being charged to use the space? If they’d bought the table, glassware and ingredients? If they’d taken care of salary, partnership agreements and health-care benefits? Why go in half-measures, Terry?

If they had been pretending to be doctors, would Terry have rolled down the window and demanded they ask for HIPPA forms and proof of insurance? What a douchenozzle.
Anonymous

“I pushed the button to roll down the window and stuck my head out to set them straight.”

That kind of says it all right there, doesn’t it?
adammtlx

This is late but it seems to me that Mr. Doctorow missed the point, which was that just because you don’t perceive a cost doesn’t mean there isn’t one. The children benefited from a seemingly “free” production, overlooking the fact that their suppliers’ (parents) means of production were the fruits of their own labor. If the children were to charge for their lemonade, they could have given their suppliers a return on their investment and thus an incentive to continue providing. This is sustainable behavior.

If the children were to continue their practice of getting “free” products and giving them away, their parents would, eventually, become insolvent or at least unwilling to continue to provide. This is unsustainable behavior.

The same kind of behavior that has landed us in our recession–giving away goods/services for “free” against the “good will” or “eventual liquidity” of future “investment.”

Everything has a cost, particularly the free stuff.
guillaume_remy

Does Studying Economics Inhibit Cooperation?
Apparently, the answer is “Yes”.
http://www.gnu.org/philosophy/economics_frank/frank.html
Rich Keller

I wish it had been Adam Savage that found the lemonade stand. Maybe he could have busted the myth of Objectivism.
Aloisius

Federal spending in the late ’30s was about ten percent of GDP. And we got a LOT of GREAT infrastructure for that ten percent.

Federal spending in the mid ’50s was about seventeen percent of GDP. And we got a GREAT interstate highway system for that seventeen percent, plus a military far larger than what we have today.

Uh.

The top marginal tax rate in the late 30′s was 79%.

The top marginal tax rate in the mid 50′s was 91%.

The current top marginal tax rate is 35%.

People complain that the the richest people pay the most taxes now. Can you imagine if we adopted the 1939 tax code?

Taxes for nearly every group have decreased as this country has gotten richer, but as the disparity between rich and poor widens, the percent of taxes paid for by the rich widens as well.
- Notary Sojac
  
  Who paid what share of taxes was not really my point. We could go round and round about the history of deductions versus tax rates and get not much of anywhere.
  
  What I was getting at is that the government’s total share of national income is higher than it was in the 30′s, and as high as it was in the 50′s, and what we seem to be getting for it is…bupkis.
  
  And yes, I include two no-win wars in that “bupkis”. I’m still waiting for Obama to end those wars, how about you?
nutbastard

oh and as an addendum – you actually docked the child allowance in order to give them candy for years, and told them that they’d always have candy from then on.

not easy.
Anonymous

The article doesn’t say to take things without paying, and to sell them. The author points out that these girls should pay back their parents for the raw materials.

The author’s theory of lemonade stands is that the parents (“raw lemonade materials distributors”) provide the supplies on credit (take now, pay later with interest), and their children (lemonade salespersons) sell the lemonade and pay the distributor back (principal + interest), keeping any profits.

The author’s beef is that instead of selling the lemonade (and by going as far as to refusing any money at all), these children will not be able to pay back their distributor.

I get the impression most people think the author is an ass, and the children are perfectly within their rights to be giving the lemonade away for free. Of course, the author is an ass, and the children can do this if they want. The trouble is that they will later have to answer to the distributor.

My experience with dealing with businesses is that they generally like to be paid the money owed to them and seek legal recourse when the partner doesn’t live up to their end of the agreement.

Since the distributor is also the collection agency, repo man, law maker and and law enforcement officer, the children really aren’t in a position to piss them off (“where’s my money dear? where’s my money? you’re grounded!”).

Now, that all said, of course this isn’t a real business. If the parents want to give the children lemonade supplies, and if the children want to give the lemonade away for free, they should be allowed to do this.

Instead of complaining, the author should take as much lemonade as possible to maximize their benefit from this. Free lemonade is free lemonade, who gives a damn if the seller’s gonna have a couple of broken kneecaps or go to bed without dinner?
Glenn Fleishman

What’s most hilarious about this article and Cory linking to it, is that it reads like a parody of what a fervent capitalist might do upon seeing a free lemonade stand, rather than an actual event.

Cory was parodied in the opposite extreme over at Crazy Apple Rumors Site:

[NOTE TO HUMOR IMPAIRED: THIS IS HUMOR: CORY DOES NOT VERBALLY ABUSE THE ELDERLY BUT APPARENTLY SOME PEOPLE TOOK THIS STORY AS LITERAL TRUTH]:

“â€œI hope sheâ€™s happy in the infantile world of apps only approved by Appleâ€™s jack-booted thugs,â€ the author of Little Brother said. â€œI hope sheâ€™s happy being forced into being a content consumer instead of a content creator. And when I say â€˜I hope sheâ€™s happyâ€™ Iâ€™m being sarcastic because people like Campbell really are the worst people in the world. And that includes pedophiles.â€”

We know Cory would never do that, but his opposite number apparently is willing to verbally abuse small children. Next, Terry can verbally abuse the elderly who receive free care and medicine! Woo!

(Why are there so many bad Savages, and only one good one — Adam?)
- Brainspore
  
  (Why are there so many bad Savages, and only one good one — Adam?)
  
  I’d put Dan in the “good” column too.
Editer

What Cory is advocating is Robin Hood banditry — and that’s not a bad thing.

Utah Phillips said we need Robin Hood bandits to balance out the philanthropists.

You see, a Robin Hood bandit gives away privately what he steals publicly, whereas a philanthropist …
rwmj

Capitalism aside, Terry’s theory of pricing is very wide of the mark.

She seems to be advocating “cost plus” pricing. That might work for government contracts, but it’s far from the way that fizzy drinks are sold. In reality lemonade might be sold at a large multiple of the cost of the ingredients, if it’s either branded or has a local monopoly. Or it might be given away / sold below cost to entice customers to buy an associated product.
Sethum

Zyodei, it is virtually impossible to live anywhere without paying some form of taxes precisely because it is virtually impossible to live anywhere that would isolate you from 100% of the benefits of living in a community. Own a nice plot of land in the mountains where you supply your own water, produce, meat, energy, and construction? You’re still able to contact 911 for health emergencies, you’re still getting “free” information like weather reports and the news broadcasted to you over the airwaves, and you still benefit from the efforts made to clean up air pollution made by you and everyone else. It’s too bad you’d still be paying more in taxes than you’d be receiving in communal benefits, but the fact is that our government has not been shaped to cater to people who care nothing for those communal benefits.

On top of that, your argument that private garbage collection works better than public law enforcement because it is private is flawed. Police abuse their power not because they are public officers, but simply because they have power. Private garbage collectors have no power to abuse. Private roles with power also abuse what authority they have.

Our founding fathers did want to support a smaller government (smaller than a monarchy anyway), but their main concern was representation. You can vote to support your view of how the government should be run. You have representation, as much as anyone else with the power to vote… Except for lobbyists.
- zyodei
  
  I am not advocating an abandonment of mutual community responsibility. On the contrary, I am
  
  If a community banded together, decided they wanted to provide a certain basket of services, and that each person should pay a certain part to be a member of good standing, who could have a problem with that?
  
  My only problem is with the initiation of violence.
  
  In a peaceful society, the penalty for not paying your “taxes” would be loss of standing in the community, maybe businesses in the town refusing to sell to you or employ you, maybe losing your right to drive on the roads.
  
  This is a much better solution than the current penalty, which is, ultimately, that men with guns will come take your house (which happens with surprising frequency in our country today).
  
  My greatest problem, of course, is with large scale, centralized, federal services.
  
  I don’t have such a big problem with local or state taxes, because even if you find what they are being used for morally abhorrent, you always have the option of just packing up and moving to the next town/state over.
  
  If you find what your Federal taxes are funding morally abhorrent and destructive actions (and, frankly, I don’t know how you couldn’t), what are your choices? What freedom do you have to refuse these “services”, to not be morally complicit in epic crimes of mass murder? You must leave the country, or even renounce your citizenship.
  
  If you support a taxpayer funded hospital or something in your town, fine, I’m not gonna get all up in arms about that. But, reviewing the last 50 years of history, I don’t see how any reasonable person can support any increase in the size, power, or funding of any part of the federal government.
  - Brainspore
    
    In a peaceful society, the penalty for not paying your “taxes” would be loss of standing in the community, maybe businesses in the town refusing to sell to you or employ you, maybe losing your right to drive on the roads. This is a much better solution than the current penalty, which is, ultimately, that men with guns will come take your house (which happens with surprising frequency in our country today).
    
    If you choose not to participate in the society that makes the concept of “property ownership” possible then why should society acknowledge your claim to said property in the first place? That land was there long before your great-granddaddy was a glimmer in a someone’s eye. The idea that you have a better claim to it than anybody else only flies if you play by the same rules as the rest of us.
    
    Anyway, even if it was possible to “opt out” of all taxpayer-supported services you’d still only have that property until someone with more guns came along.
    - zyodei
      
      The idea of ownership of property, ie physical things (not land) is, I believe, inherent to human beings. If a child finds a shiny rock, and another child tries to take it away, they will be upset. If somebody hunts a moose, and somebody else they don’t know or like, tries to take it without permission, they will have a problem.
      
      Thus, “property” is not something that derives from government.
      
      Now, one of the useful services that government provides is, basically, security – putting in place a framework to protect people’s private property.
      
      But, just because they provide it now, and it works sorta well most of the time (until they decide to take your property yourself), does not mean that this is the only possible way of providing this useful and necessary service in society. I think, rather, there could be many, many ways, each suiting different communities.
      
      “you’d still only have your property until someone with more guns came along”
      
      Well, yes and no. The problem with that is that, actually organizing an armed raid on another group is both expensive and risky. Most people wouldn’t choose it if they had some better options.
      
      It really is only a reliable and profitable strategy if you can fool some other group of people into both paying for and carrying the guns for you. If you can, then it has been proven to be one of the most profitable and reliable cons in world history. And even this would be a danger in an anarchist society.
      
      But still, giving some group of people unlimited access to guns and de facto unlimited right to use those guns as they see fit, all in the name of protecting you from some other group of people who might have some guns, seems like a fantastically bad idea, and in the long term a recipe for disaster once the people who want to use guns for harm figure out how to join the ranks of those given massive amounts of guns. I sure am glad we have never tried anything like that in our society…
Brainspore

The purpose of a lemonade stand is whatever the kids and parents involved decide it is. That may be a lesson in capitalism, an exercise in philanthropy, a study on the effects of citric acid or a session of “go play outside so mommy can get some quite time.”