DSA Delusions #3: Who Gets to Decide What Something Is Worth?

DSA Delusions #2 asked who pays when a platform guarantees something "for all" at "no cost." This piece asks a more basic question: who decides what any of it is worth in the first place?

The short answer, laid out at length in "What Is It Worth?", is that value isn't a fact sitting inside a good or a service waiting to be measured. It's a judgment each person makes, differently, based on their own circumstances — "value is not innate; it is not in things or ideas. It is within us." A free market doesn’t set value; it just lets millions of individual judgments combine and settle on a price through voluntary exchange. A critical part of freedom is the freedom to assign your value to things and work.

Every plank discussed in DSA Delusions #2 involves the government setting a value number instead of letting it emerge from the people: a legislated wage, a legislated rent, a legislated price of zero for tuition and health care. Even in a world with infinite money and even setting aside every dollar figure in the last article, that's still a different kind of decision than the platform admits to making. It isn't just spending. It's substituting a government answer for the collective will of the people.

Setting the price of labor

A wage is a price, and like any price, it's compressing an enormous amount of individual information into one number. A worker weighing a job offer values pay against commute, flexibility, hours, coworkers, how much they need the money this month versus next year, and whether the role teaches them something worth more than the paycheck.

An employer weighing whether to make that offer values the same trade-offs from the other side: how much this specific person's specific skills are worth in this specific location at this specific time. A legislated "living minimum wage" and a mandated 32-hour week with full pay replace millions of those individually negotiated answers with one nationally uniform answer, and no committee, however well-intentioned, can possibly know what those individual answers actually were. To set prices or wages accurately, the decider must be able to read the minds of nine billion people. Furthermore, this omniscient decider must be able to evaluate local differences. A pair of snow boots may be far more valuable in Alaska than in Tahiti. Similarly, a surfboard shaper in Maui will likely command a far higher hourly wage than one in Indianapolis. Setting wages or prices ignores these variables.

This is what Friedrich Hayek called the knowledge problem: "the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess." While a price does ration scarcity, it does far more than that; it carries information that would otherwise exist nowhere at all, scattered across millions of people who each know only their own corner of it. Set the price by statute, and that information doesn't get incorporated; it gets discarded.

DSA Delusions #2 already cited the CBO's estimate that a $15 federal floor would cost up to 1.3 million jobs in an average week. Read through this lens, that number isn't just an unfortunate side effect — it's the visible edge of exactly the information loss Hayek described. Those are jobs where an employer's honest valuation of the work and a worker's honest valuation of the pay could have met somewhere below the legislated line, and the law simply deleted that possibility rather than letting the two people involved find it themselves.

Setting the price of shelter

Rent works the same way. A landlord and a tenant negotiating a lease are each including in their idea of a fair price things no outside authority can see: how much the tenant values this specific location versus a cheaper one across town, how long they plan to stay, how much upkeep they're willing to do themselves; how much the landlord values a reliable long-term tenant over a higher rent with more turnover risk, what the building actually needs in repairs this year, what similar units nearby are renting for right now. "Universal rent control" replaces that negotiation with one number set in advance, for everyone, regardless of what either side actually knows about their own situation.

DSA Delusions #2 covered what happened when San Francisco tried this in 1994: a 15% decline in rental housing supply as landlords converted units to condos or redeveloped around the restriction. That's usually correctly described as a supply problem. But it's also what happens when a legislated price can't adjust to the information a free one would have carried — landlords who would have happily kept renting at a market-negotiated price found the legislated one didn't reflect their actual costs or the tenant's actual circumstances, and pulled the unit out of the rental market entirely rather than accept a number that wasn't theirs. The rent didn't get more fair. It got less informative, and less housing existed because of it.

Setting the price of learning

Free tuition sets a price too — zero — and a price of zero destroys information just as thoroughly as a price set too high. When a prospective student has to weigh a degree's cost against its expected value to them, that comparison forces them to ask something worth asking: is this program, this school, this amount of time actually worth what it costs me? Remove the cost side of that question entirely, and the comparison disappears. Seats get chosen on interest, prestige, or convenience alone, with no signal back to anyone — the student, the school, the taxpayer funding it — about which programs were actually worth the resources spent on them and which weren't. Even without setting the price to zero, the government's student loan programs had a similar effect, leaving millions of students saddled with debt they can’t pay because they were denied accurate information about cost versus value.

That's not an argument for pricing people out of an education they value. It's an argument that price is the only mechanism anyone has come up with for making millions of individual students' honest answers to "is this worth it to me" visible at all. A free price doesn't make that question go away. It just guarantees nobody ever answers it, which is a strange way to "guarantee" quality.

We've run this experiment before

This isn't a hypothetical. The United States ran the experiment at national scale in the 1970s. When Nixon froze wages and prices in 1971 and then reimposed controls in 1973, the government wasn't just capping numbers — it was overriding the information those numbers carried. The response was immediate and telling: "ranchers stopped shipping their cattle to the market, farmers drowned their chickens, and consumers emptied the shelves of supermarkets." None of those producers were told what to do. Each one looked at a price that no longer reflected what their product was actually worth to buyers and made the only rational choice left available: stop participating.

Gasoline told the same story. Price controls on oil, in place before the 1973 Arab oil embargo even hit, meant that when the embargo reduced supply, the price at the pump couldn't reflect it. Shortages had already begun showing up in late 1972, and by early 1973 Senate hearings found fuel shortages "far more extensive than anticipated," with an Exxon executive testifying that eighteen months of price controls were at the root of it. Motorists didn't experience a price increase, which is the normal way a market tells people a good has gotten scarcer. They experienced a line at the pump instead — because the legislated price could no longer do the one job a price actually has: telling everyone, all at once, exactly how much of something is really available and what it's really worth to get it.

The two arguments fit together

DSA Delusions #2 showed what these three planks would cost, and who ends up holding the bill. This piece is the argument underneath that one: the reason nobody, including the DSA, can even name the right minimum wage, the right rent, or the right tuition in advance is that there isn't a right number sitting out there to discover by legislation. There's only what millions of individual people would have valued things at, if they'd been left free to say so through a price. That freedom — the one described at length in "What Is It Worth?" — isn't a libertarian nicety bolted onto economics. It's the mechanism that makes any of these numbers knowable at all. Take it away in the name of guaranteeing an outcome, and you haven't found a better number. You've just made sure nobody, including the government doing the guaranteeing, can ever find out what the right one would have been.

The most important concept in capitalism is value given for value received. True value can only be negotiated between producer and consumer; either can refuse the transaction, but the consumer has the last word on whether or not to accept the exchange. When a government, a union, or a corporate monopoly interferes and tries to set a price, the consumer is denied a fundamental freedom: the freedom to decide what a good or an amount of labor is worth to them. Without economic freedom, all freedom eventually dies. That is why every social effort has ended in dictatorship. As you go to vote, remember: a vote for Socialism is a vote to surrender your freedom for an idea that has never ended well, never.