Why was I initially inclined to state that Starbucks’ price exceeded its value offered? It was because I was conflating two different statements: “I wish I paid less,” and “This isn’t worth the money.” Those are two fundamentally different assertions. Wishing that we paid less for things is pretty commonplace and is felt even with purchases we voluntarily make, of things we can readily afford. Of course, we’d always rather pay less and keep more money for our other needs and wants. However, that is fundamentally different from concluding that the exchange being offered is disadvantageous to us. It is all too easy for us to mistake one concept for the other: to mistake our desire for a lower price for the existence of something unfair about the transaction.

Politicians are adept at exploiting such self-deceptions and turning them to partisan advantage. How frequently do we hear politicians decry price-gouging, alleging that evil, powerful corporations are victimizing helpless American consumers? This cynical brand of politics conflates something nearly all of us feel (a desire for lower prices) with something quite different: the charge that consumers are being forced to pay more than a fair price for something they need. In reality, this is rarely true: instances are few and far between of sellers having unlimited pricing power, i.e., of being able to set prices as high as they wish without losing sales. In the vast majority of circumstances, prices reflect the intersection between what consumers are willing and able to pay, and what sellers are willing to accept. This of course doesn’t stop politicians from encouraging us to lie to ourselves and believe that price inflation is primarily the result of corporate greed rather than what it really is: an outcome of complex interactions, including monetary and fiscal policies as well as the balance of supply and demand.

[It is no surprise that politicians exploit ignorance, of course. What is surprising is how many of us remain stubbornly ignorant, and how many of us may have conditioned ourselves to do so. This is essentially the root of the profoundly errant insistence on “fairness” as imposed by authority rather than in free-will economic association and engagement. — Ed]