Ludwig von Mises Institute

Free rider

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A Free Rider is an individual or other entity that takes advantage of benefits for which they do not pay for. A common example is patients without insurance, or other means to pay for treatment, receiving care at public hospitals. This is frequently used by governments, or economists who support them[1], to advocate intervention to prevent free-riding. This argument has been used by Mitt Romney to defend his decision as Governor of the state of Massachusetts to require every individual to carry a basic health insurance policy[2]. However, it should be noted that free-riding occurs precisely because of previous government interventions. If hospitals weren’t socialized, that is operated or controlled by governments, then people who received care would be responsible to pay for it, either through insurance, or out-of-pocket. For those unable to pay, the hospital could voluntarily cover the costs, and thus, free riding would no longer be a problem.

In Against Intellectual Property, Stephan Kinsella shows that advocates of Intellectual property have argued on utilitarian grounds, that free riding would remove incentives for creators to produce new works without the state granting monopolies[3]. In this case, a free rider is someone who acquires a free copy of a song, movie, picture, etc., in violation of existing copyright laws. Kinsella responds that even it were true, that less wealth is produced without IP protection, it does not mean that such a system is just.


References[edit]

  1. .Reference[1] Paul Krugman, New York Times. 12-30-2007, Accessed 09-23-2011.
  2. .Reference[2] Mitt Romney defends Massachusetts health care law in Las Vegas speech – Politico.com. Accessed 09-23-2011
  3. .Reference[3] Against Intellectual Property – N. Stephan Kinsella, page 18

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