Hidden Costs

The problem with trying to determine the moral path through economic policies is rooted in unforeseen consequences. In almost any plan, there are hidden costs that somehow make inexpensive plans require much more funding than originally anticipated.

In college, I see this all over the place. I came to the University of Wyoming in 1999 on the Trustee's Superior Student Scholarship, which paid for tuition, fees, room, and board, so I didn't necessarily have to worry so much about costs (and therein lies a problem), but I could see how numerous costs were inflated due to good intentions, but poor policies.

In the dorms, where I lived for four out of my five undergraduate years, I had the opportunity to witness just how hidden costs keep hurting us. Now, the dorms at UW were operated fairly simply. There was a fixed cost of living in a dorm room, and that covered phone, electricity, water, heating, and internet services. There was a fixed cost of any particular meal plan for dining in the Washakie Dining Hall.

The idea behind fixed costs is that some use more and some use less, and it is more effective to charge the average. Thus you tend to lose out with some customers, but on others you gain back the difference. And fixed costs are attractive to people. I know nowadays when I page through the classifieds looking for a new place to live, the places where utilities are a fixed part of the rent seem more appealing, and for a good reason. If I don't have to worry about the electricity bill, I can use all the electricity I want without worry. If I don't have to worry about water or natural gas, then I can take all the long, hot showers I want.

Perhaps where I would like to focus my attention the most, though, is on the Washakie Dining Hall, because that is where I've seen the most waste. And it is telling. While any particular meal plan carries a fairly high cost per meal, once you're inside the hall, you can take as much as you want and keep going back for more, if you so desire.

What you tend to see, then, is people who grab the main course, or possible two, heap up their trays with all kinds of side dishes, pick at their food, and then send most of it back to the kitchens to be thrown away.

What was really interesting was that people actually justified their waste. "If Washakie is going to charge so much more a meal plan, then I need to make sure I'm getting my money's worth." Friends of mine would load up their trays with stuff they didn't want and let it all be thrown away in an infantile desire to "stick it to the man."

For some odd reason, the cost of meal plans kept increasing every year.

I know a number of universities will offer meal plans, but then have a price attached to each course a person could select, which provides incentive to only take what one could afford. In addition, those plans carried with them much less waste, as people realized if they didn't finish what they took, then they had wasted their money. There's obviously a hidden cost factor at play here. At UW, that hidden cost factor drives the cost of food up every year, but though the students grumble, they continue to waste, because a fixed cost is a fixed cost.

The question then becomes, is it immoral then to offer fixed cost plans when it is obvious that people abuse the system? Not necessarily. A fixed plan can be very beneficial to many people, both those who offer the plan and those who accept the plan. The immorality comes from those who would abuse the system. But this comes back to matters of restraint, which we Americans don't seem to have. The moral course of action is to not waste, even when we have the opportunity to waste as much as we want without repurcussion.