What Makes Things Affordable?

Affordability. It’s the word on everybody’s lips.

Ever since self-described socialist Zohran Mamdani became the frontrunner in the New York City mayoral election by saying the word “affordability” with talismanic regularity, we have been told that the key to modern politics is that word’s repetition. Say “affordability,” and watch your polls rise.

And yet the world becomes ever more unaffordable.

Why?

Because there is, in the end, only one way to make things more affordable: to reduce prices. And there are only two ways to reduce prices: to reduce demand, or to increase supply.

But governmental interventionism tends to do precisely the reverse. Government interventions are generally designed to increase demand through subsidies, thus increasing prices; or they are designed to reduce supply through restrictions and regulation; or both.

Here is a list of products that have become more expensive since 2000: hospital services; college tuition and fees; college textbooks; medical care services; child care; food and beverage; housing. Here is a list of products that have generally remained the same in terms of price of declined: new cars; household furnishings; clothing; cellphone services; software; toys; televisions. It is no coincidence that the first list includes heavy government regulation and subsidization; the second list includes products that have been left to the supposed predations of the free market. That is because free markets — through competition and its consequent efficiency-seeking — generate more supply and more efficiency.

And yet.

Virtually no politician is willing to say the obvious: that in order to achieve affordability, politicians must be deprived of their power, not given more of it. It’s far easier electorally to pander — to tell voters that if only politicians are given more power, they can fix all voters’ problems.

That’s a lie.

But it’s an increasingly ubiquitous lie on both sides of the aisle. And when politicians deign to tell the truth, they are quickly savaged for it.

Take, for example, H-1B visas. Now, there are many honest questions to be asked about H-1B visas: Do they properly screen for assimilative capacity? Are the jobs for which they screen truly empty of competitive options from American workers? Are employers taking advantage of immigrant laborers? Are we offering too many or too few of these visas? But the overall objection to H-1B visas is broader: It is the general notion that legal skilled immigrant labor harms affordability.

That isn’t true.

Obviously, restricting the supply of labor drives up wages in a protected industry — which makes life more affordable for those particular workers in those particular industries. At least temporarily. But at the other end of the production pipeline is more expensive products. And those prices are passed on to all consumers. And if those products become uncompetitive, consumers turn to other suppliers, those impoverishing precisely the industries targeted for protection — or forcing businesses to offshore or turn to technological substitutes for human labor.

Again, none of this is an argument for unfettered immigration. Mass migration damages America culturally — and unskilled mass migration damages America economically as well. But if we wish to address the affordability crisis, we must actually address it — not just repeat slogans about it, and then hope that, magically, government will be able to solve it.

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