Last week, my colleague Jonathan Fortner wrote about the injustice of the "1 percent" that rule over our political system in his column, “A world without money.”
Fortner affirmed that "peaceful protests" like those carried out by the Occupy movement, "are a waste of everyone’s time and patience."
While the common man suffers from economic downturns, the wealthy and politically connected profit. Certain politicians and their cronies become wealthy and powerful, not through philanthropic work or public service, but by controlling and stealing from others. As I read through Fortner’s column, I was horrified and astounded by the solution that he offered the reader: the abolishment of money.
I can think of very few economic claims that are as unfounded, unrealistic and damaging as this one.
Today’s economic system is based on political power. We have an unfree and unfair market where the government, under the control of multi-million dollar corporations, uses its power to pick winners and losers.
This is not a free market; it is the distinction between corporatism and capitalism.
Economists like Ludwig von Mises understood that "unlike feudal kings, dukes, or lords of earlier days," in a true capitalistic system, the businessman "does not rule at all, he has to serve."
In a free market economy wealth is accumulated not by how many political friends you have, but by how well you meet consumer demands. A free market bars corporations from using their capital to sway lawmakers in how they shape policy.
I hope that the remarkable results of free markets are evident to Fortner and our readers. Industry and freedom have created an environment where the population is much greater than it was in the ages preceding capitalism, where all men and women enjoy a much higher standard of living than their ancestors did.
When Fortner writes "We should all just work together, for free" as a "national community," he mirrors the philosophy held by Vladimir Lenin and Che Guevara, men whose visibility within popular culture might overshadow their more abominable actions.
A world without money means a world without prices. These ambitions “reflect intellectual error rather than different values,” writes F.A. Hayek, a student of Mises who received the Nobel Prize in economics.
Prices are the foundation for production and distribution. They are the guide that signals the what, when, how and who to produce for in a market. Standardized currency was created out of necessity by free people. The value it gives our goods, services, products, endeavors, etc. is not purely symbolic.
A great example of what happens without prices is the bread lines in Russia during socialist control.
How can producers know how much to produce without essential signals like prices? Answer: it is impossible. No individual, community or government can ever know all the information required to produce effectively without these signals.
A short lesson in history and economics shows that claims like "distribution of wealth will make us equal," or "business owners are merely people who cut the checks," are not just inaccurate but detrimental to economic progress and the advancement of mankind.
We need a truly free market, controlled by the individual and completely absent of the coercive forces of government.
Reach the columnist at calfaro2@asu.edu
Click here to subscribe to the daily State Press newsletter.
