Saturday, August 4, 2018

The Venus Project And The Resource-Based Economy | Answers With Joe

In response to , I wrote the following:

The definition of Capitalism is that the means of production is privately owned.   Since when has it ever worked to have the means of production publicly owned?  I'm not talking about services to protect our rights, nor public works like roads, but 100% of the means of production.  How would you like to live in the Soviet Union?

Having a free market means that you are free to make choices, the opposite of which is tyranny.  Suppose you want to start a business?   You might not be allowed because your business doesn't fit the official paradigm.  Besides, you have no money to invest and no medium of exchange by which to conduct business.  You are completely dependent on the state to make decisions for you.  Some think that it is more fair if it is 'democratic', but tyranny is still tyranny.   There is no room for innovators like Steve Jobs in such a society.

Suppose you want to own a yacht or eat steak everyday for breakfast?   There are never going to be infinite resources where everyone can own a yacht and eat steak.  Either nobody has these luxuries, or there are those who are arbitrarily rewarded by the political system, making them the privileged class.  It would nearly impossible to earn these things through your own efforts, unless those efforts were were in service to someone more powerful than you.  These things are decided in a free market because people make choices about who they want to give their money to.  Voluntary exchanges, as opposed to involuntary ones imposed by the state, reward those who provide the most value for other people.

A society where you have no ability to improve your lot in life beyond what the state allows is a slave state.  By definition.  Impose a one size fits all lifestyle on everybody and people will immediately start to rebel against it

Communism and its variants are not just as corrupt as capitalism, but always more so.  People resent that under a free market some people end up much better off than other people, but the disparity of wealth is never solved in the various forms communism where the lot of the poor ends up being worse.  Allowing some people to be more successful than others in a free market is an essential motivator for innovation, investment, and hard work.

People respond to incentives on just about everything, including whether they work and how much they work and for who.  Incentives decide what people choose to spend their money on.

Money is essential for managing scarce resources.  Price will change based upon the laws of supply and demand, and price sends an absolute critical signal to people on how to manage resources.   Suppose there is a temporary shortage of orange juice and the price goes up?   People will switch to something cheaper, like grape juice.   When eggs are cheap more people will eat eggs.  When eggs are expensive more people will eat something else.  Eliminate money and resources will immediately become mismanaged.   There is no way that centralized control, automated or not, can properly decide how many resources to allocate and use.   State control is never as good as individuals deciding for themselves how to best serve their own needs.  State control will result in shortages like we see in Venezuela.  Black markets will form, because people prefer to make their own choices.

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