Economics In Short Lessons: If You\'re Paying, I\'ll Have Top Sirloin
Suppose the tab is split not at each table but across the 100 diners that evening across all the tables. Now adding the $4 drink and dessert costs only 4¢. Splurging is easy to justify now. In fact you won't just add a drink and dessert; you'll upgrade to the steak and add a bottle of wine. Suppose you and everyone else each orders $40 worth of food. The tab for the entire restaurant will be $4000. Divided by the 100 diners, your bill comes to $40. Here is the irony. Like my neighbor at the theater, you'll get your "fair share." The stranger at the restaurant a few tables over pays for your meal, but you also help subsidize his. It all "evens out."
But this outcome is a disaster. When you dine alone, you spend $6. The extra $34 of steak and other treats are not worth it. But in competition with the others, you've chosen a meal far out of your price range whose enjoyment falls far short of its cost.
The fact that we pay taxes for things other people use, and they pay for things we use does *not* mean that it all evens out, even if everyone pays the same amount!. When our consumption decisions are decoupled from their cost, we end up consuming too much, whether it be health care, public transportation infrastructure, or groundwater. This might be an interesting argument to present to the anti-consumption left.