In this tale the towns people go to their local government with a private complaint. There are too many rats in their town, and they demand that they have a right to entrust government with the responsibility to extricate all of the rats, or else they will surely replace those in the governmental positions. “[F]ind the remedy we're lacking, Or, sure as fate, we'll send you packing!". This dependency the peoples have on their government ultimately results in the destruction of private property, and is the result of a problem perceived to be too difficult for the freedom of the market to repair. This lack of trust in freedom, created an environment where a dependency could flourish, destroying innovation of new alternative cures to their rat infestation. (free market book quote on what the lack of trust in freedom creates)
While fretting over their inability to come up with a viable plan, the lofty council hears a knocking at the door. In walks a tall man, an entrepreneur who has heard of the opportunity to work. The Pied Piper says, “I chiefly use my charm On creatures that do people harm,” this does not insinuate that, because the creatures “do people harm,” he is willing to act out of charity, rather, the piper's intention is to trade the use of his service for money. He travels around the world ridding different locations of various creatures which hinder the societies progress. In order to be able to continue in his line of work, or towards new goals, he needs to be paid. What is seen here is his services are in demand, and of short supply, the piper desires an exchange. “If I can rid your town of rats Will you give me a thousand guilders?” The council is incredibly enthusiastic and exuberant, promising more than he's asked for, yet the piper humbly replies that all he wants is what he's asked for. Without writing down the agreement that has been made, the Piper leaves the building to go to work. The Pied Piper plays a short tune on his pipe and successfully leads the entire rat population, save one sturdy rat, to its doom in the river. All of the people of the town celebrate and the Piper makes his way to the Mayor to collect the due for his services. The mayor and his men shake at the knees, for they do not want to pay the Piper what it is that he pleases. The Mayor wonders why he should pay the piper more than fifty, for now that the problem is gone, the cost of fixing the problem seems to high, and so he attempts to dismiss his previous commitment.
“To pay this sum to a wandering fellow With a gypsy coat of red and yellow! […] We saw with our eyes the vermin sink, […] But, as for the guilders, what we spoke Of them, as you very well know, was in joke.”
The Piper should have gotten the agreement in writing so that he could be more certain that the Mayor would hold true to their contract. Here we see a destruction to society through the failure of holding true to a contract, something which government is supposed to enforce, and through the view that things can be done for free. Though things may seem to be free, what is not seen is the unintended consequences. For, all actions have consequences, whether apparent or hidden. As Bastiate says in his book, That Which is Seen, and That Which is Not Seen, “...the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, - at the risk of a small present evil.” The Piper has places that he is supposed to be that evening, and is upset that he has been spindled of his part of the exchange. He says to the Mayor, “And folks who put me in a passion May find me pipe to another fashion.” The Mayor disregards the warning and instead insults him, unaware of the unintended consequences of his actions . The Piper steps, once again, into the street and begins to pipe a wonderful tune, this time it is not vermin that follow along after him, but all of the children of the town. All of the children feel an over whelming sense of joy and run unthinkingly after the Piper. “But how the Mayor was on the rack[...].” The Piper lead all the children into the side of the mountain “ As if a cavern was suddenly hollowed; And the Piper advanced and the children followed.” All of the children, save one lame boy who could not keep up with the rest were swallowed by the mountain. The boy feels sad because he wanted to go along with his playmates to the place, “Which the Piper also promised me; For he led us, he said, to a joyous land[...].” The Mayor sends people out everywhere to try and find the Piper, to offer him anything he wants, if only he will bring back all of the children. The Piper never comes back, nor do the children, yet many years later there is a strange town that claims that their parents were from a different land, that is all we know about what may have happened to the children. The tale ends with the narrator claiming, “[W]hether they pipe us free from rats or from mice, If we've promised them aught, let us keep our promise.”
The core issues this tale brings up is, that the Piper contracted with the government rather than with each individual, and the importance of keeping contracts. The costs and benefits are incurred by the common populace, for the government to be handling public services has been shown to be unwise. The peoples entrusted their government to be a true representative institution. Not only does the government's initial enthusiasm to hire the Piper lead it to proclaim its willingness to pay him fifty times the initial price proposal, but, its final disregard for the contract it made, the lack of foresight into the potential unintended consequences of its actions, lead to an even greater catastrophe, that of the loss of the town's children. This example is somewhat limited because the options for eliminating the rats are less explored, leaving the reader with no awareness of the multiple substitutes available. The principle we have discovered is that when the costs of something are to be incurred by an individual, it ought to be the individuals choice to agree or disagree to the proposed method of action. When a public service is provided for by a representative body, it is likely for the costs to be much higher than previously proclaimed, either in a direct monetary form, or through some other unintended consequence. In either scenario, the government's dealing in activities that are outside of its jurisdiction was more costly to the society of individuals. And, the use of government creates an environment that subjects each individual to the will of the majority. If, even one individual had found an alternative to using the government to solve their problem, they would still have had to pay for the use of the government service if unsuccessful in persuading the entire society to incure a more apparent cost. Thus, the Piper ought to have been privately contracted, as to make the costs and benefits clear, and as to put no one at the will of another.