Jon Hersey
fee.org
Jon Hersey is managing editor of The Objective Standard, fellow and instructor at Objective Standard Institute, and Hazlitt fellow at Foundation for Economic Education.
In Star Trek: First Contact, Captain Picard explains to a 21st-century visitor, “The economics of the future is somewhat different. You see, money doesn’t exist in the 24th century.”
Yusaku Maezawa, a multibillionaire who recently traveled to space, could double for just such a visitor. He recently echoed Picard’s idea in a press conference he gave from the International Space Station, saying,
Someday, money will disappear suddenly from this world. . . . my bank account will be zero. Everyone’s bank account will be zero. And everything in stores [will be] free. So, everyone can take everything for free from stores. If you love cars, you can ride a Ferrari as soon as you want—for free.
The fashion tycoon added that capitalism “is not sustainable” and should be replaced with a money-free society as soon as possible, a view he promises to explain in a film he plans to make (which no doubt will cost a small fortune to produce). Is this a truly futuristic idea—one we should strive for? Or is it actually rather primitive and unworkable?
Capitalism, to the extent it has existed, has been incredibly successful at lifting most of humanity out of poverty, incentivizing the creation of incredible, life-enhancing technologies, such as those Maezawa used to make his fortune—not to mention, travel to space. But it’s long had its critics, and he is far from the first to propose a sort of Garden-of-Eden world where everything is plentiful and free. Karl Marx envisioned a similar utopia. Communism, he said, ultimately would bring about a world without money:
In the case of socialised production the money-capital is eliminated. Society distributes labour-power and means of production to the different branches of production. The producers may, for all it matters, receive paper vouchers entitling them to withdraw from the social supplies of consumer goods a quantity corresponding to their labour-time. These vouchers are not money. They do not circulate.
And although “society distributes labour-power”—meaning government planners tell people what to do to ensure that things (such as “free” Ferraris) get made—workers could also all pursue whatever hobbies or occupations strike their fancy. “[I]n communist society,” Marx explained,
where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, to fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have in mind, without ever becoming hunter, fisherman, shepherd or critic.
Because, in such a world, “society regulates the general production,” only social planners would need to worry about how all of this somehow adds up to meet everyone’s needs. The worker need not concern himself with producing in-demand goods that he can trade for others. As a modern utopian and self-described “social engineer,” Jacque Fresco, explains:
all goods and services are available to all people without the need for means of exchange such as money, credits, barter or any other means. For this to be achieved, all resources must be declared as the common heritage of all Earth’s inhabitants. Equipped with the latest scientific and technological marvels, humankind could reach extremely high productivity levels and create an abundance of resources.
In other words, a handful of technocrats would somehow make possible a couch potato’s paradise. That’s not an idea that resonates with me or with the ambitious young people I know. On the other hand, burned-out Chinese workers—who recently launched the “lying flat” movement to popularize opting out of Xi Jinping’s “continual struggle” toward tech dominance—likely would welcome the respite. Ironically, though, the Chinese Communist Party views this widespread acknowledgment of fatigue as subversive childishness, evidencing the individual’s supposedly immoral desire to put his own selfish interests above those of the nation.
Under communism, a handful of technocrats would somehow make possible a couch potato’s paradise. That’s not an idea that resonates with me or with the ambitious young people I know.
But, if not in the heart of communism, might Marx’s Eden be workable elsewhere?
Although Marx considered himself a social scientist and economist—and although his ideas are still some of the most widely taught—they aren’t much taught in social science or economics departments, except as foils. That’s because virtually all of Marx’s hypotheses have been debunked. For one, who’s going to build the free Ferraris that Maezawa has dreamed up, never mind tackle more mundane tasks, with no incentive? But for those who don’t find such commonsense thought experiments convincing—or who think, as Marx did, that human nature will somehow mysteriously change—the impracticality of Marx’s moneyless state was demonstrated by what Austrian economists have come to call the calculation problem. Ludwig von Mises once explained the problem as follows:
If a hydroelectric power station is to be built, one must know whether or not this is the most economical way to produce the energy needed. How can he know this if he cannot calculate costs and output?
We may admit that in its initial period a socialist regime could to some extent rely upon the experience of the preceding age of capitalism. But what is to be done later, as conditions change more and more? Of what use could the prices of 1900 be for the director in 1949? And what use can the director in 1980 derive from the knowledge of the prices of 1949?
The paradox of “planning” is that it cannot plan, because of the absence of economic calculation. What is called a planned economy is no economy at all. It is just a system of groping about in the dark.
In short, without prices, people have no relatable, quantifiable means of comparing and contrasting options about how to spend time and capital, which is vital for determining how best to use these naturally scarce resources. “New Scientist magazine reported that in the future, cars could be powered by hazelnuts,” said comedian Jimmy Fallon, in a skit that captures this point hilariously. “That’s encouraging, considering an eight-ounce jar of hazelnuts costs about nine dollars. Yeah, I’ve got an idea for a car that runs on bald eagle heads and Fabergé eggs.”
The paradox of “planning” is that it cannot plan, because of the absence of economic calculation. What is called a planned economy is no economy at all. It is just a system of groping about in the dark. —Ludwig von Mises
But there’s more. As has been shown with so many of Marx’s ideas, a moneyless society is not only impractical, it’s also deeply immoral. Marx often grumbled about greedy capitalists alienating workers from their labor. The focus on efficiency, he said, reduced the worker to a mere extension of a factory’s machines, rendering him a brute tool of capitalist exploitation.
Of course, workers chose industrial jobs because they paid better than those in agriculture and the like. And even if boring, such jobs rarely were so backbreaking as life on the farm. Far from alienating workers from their labor, the capitalist arranged new modes of production that vastly increased the value of that labor, not only for himself, but for workers, too. Whereas a slave truly is alienated from his labor—he works but is deprived of the fruits of his effort—the industrial worker could count on greater returns from his labor than ever before. Over the course of the Industrial Revolution and the following centuries, those returns have grown immensely and reduced the percentage of people living in extreme poverty from more than 80 percent to less than 20.
Money stores the value of one’s effort. It’s made possible by the legal protection of property rights. In the words of Francisco d’Anconia from Ayn Rand’s Atlas Shrugged:
Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders.
Just as the worker owns himself, he owns the values he produces, on which his life depends, either directly or indirectly via the sale of those values. Without money and the property rights that underlie it, we all would be truly and fully alienated from our labor, left without enforceable claim to the values we spend our time—and thus our lives—creating.
“Money rests on the axiom that every man is the owner of his mind and his effort.” —Ayn Rand
That’s an idea hardly fit even for science fiction, one best relegated to the dystopian genre.
This piece is republished with permission from The Objective Standard.
This article was originally published on FEE.org. Read the original article.
