The Marketor Else!

Harsh though the fact may seem to some, the scarce and valuable resources of the world are gen­erally staked out and claimed. Somebody owns them, no matter how much others might want them. If this were not the case, the first order of business would be to make it so. For there is no way in the world to assure the efficient use and reasonable conservation of scarce resources until they are brought under private ownership and control. What belongs to everyone belongs to no one, and waste is not felt to be a personal loss.

This is not to say that private ownership, in and of itself, is a sufficient condition for harmonious human relationships. The owner, having once staked a claim, may not thereafter sit on his property with a dog-in-the-manger attitude toward others. His right is by their consent, so to speak. Unlessone’s neighbors generally approve the use he makes of his property, they will not rush to help him de­fend it. Indeed, they may be the first to trespass or otherwise chal­lenge his title. This is not to con­done unneighborly conduct or the tendency to trespass, but to stress the owner’s responsibility to put his property to productive use which others may understand and approve.

So, it behooves an owner to practice what might be termed an open-door policy as distinguished from a closed shop. In other words, unless he is prepared to defend his claim behind a Great Wall with armed guards, he will rely upon a “For Sale” sign, daily proving anew in the market his right to his property. The open market recog­nizes no special privileges on the part of any owner. Each market participant or trader bids against all others, and the property goes to the highest bidder. And every­one who would trade has a vested interest in keeping the market open, in policing the market against thieves and robbers and any coercive intervention with the person or the property of any peaceful trader.

The point bears repeating: the allocation or ownership of property is most wisely determined in the open market; the proper function­ing of the market requires polic­ing and the protection of private property; but this does not mean protectionism or special privilege for any owner by way of govern­ment intervention. The latter amounts to a closing of the market against peaceful traders—a rever­sion to barbarism and war.

Not that any given owner is so all-wise that he alone knows best how to use and conserve scarce resources. But he does have a sense of values and his own order of priorities to which any customer in the market may appeal with a bid or an offer to buy. It is possi­ble, of course, that none of these offers would appeal to the owner at a given time, in which case he would retain possession until of­fered something better or until his own needs and priorities had shifted enough to make him will­ing to trade. Bear in mind that no one can earn a living simply by hoarding; eventually he must sell or otherwise convert some of his hoard into something to eat. So, he is quite as dependent on others as they may be dependent on him. And it is this interdependence, re­flected in market pricing and trad­ing, that ultimately attends to the most efficient use and conservation of scarce and valuable resources—that transfers ownership into the most capable hands.

Modern markets are a far cry from the simple barter of earlier times. Sophisticated traders usu­ally make their deals in terms of money. So let us examine the role of money as a medium of exchange and see how monetary policies affect the market and the course of trade.

Monetary Manipulations

Anyone with the slightest knowledge of monetary history knows very well how the ancient goldsmiths used to issue more warehouse receipts for gold than there was gold in the warehouse. Our modern systems of fractional reserve banking employ the same principle.

We know about this. Yet, many of us never quite grasp the sig­nificance of what we seem to know. These slips of fiat money flowing from the banking system are claim checks we presumably bring to market to exchange for the goods and services available there. But if we stop to think about it, we soon see that there is no real mar­ket demand for these claim checks as such. The only reason why any­one wants any of them is that they might help him get the goods or services he wants. What every trader in the market wants are goods or services more valuable to him than those he offers in ex­change. He hopes to find the mar­ket place full of goods and serv­ices, rather than lots of monetary claim checks to be redeemed.

The salesman may not realize it, but the smile on his face when a millionaire enters the store is not for the million claim checks the customer might have in his pocket. The smile goes back to the pile of goods and services that had to be released in the market before that customer could acquire a million claim checks. Otherwise, those checks are the work of a counter­feiter, a “customer” welcomed by no bona fide supplier of goods and services.

In one sense, the welfare client who enters the market with a bundle of food stamps is like a counterfeiter: neither is bringing any useful goods or services into the market; each plans to draw against the available supplies; and some supplier is bound to come out on the short end of such one-way “trade.” The same holds true whenever any customer enters the market with a pocketful of money which has not been earned by sup­plying goods and services.

Barred from the Market

Perhaps the tax collector—the mailed fist within the velvet glove of the welfare state—most clearly symbolizes the claimant of some­thing for nothing. True, he has legally been hired to perform a job. But his task is to withdraw goods and services from suppliers—from the market—without the arduous necessity of offering other marketable items in trade.

The tax collector, in other words, controls entrance to the market, exacting tolls of varying magni­tude from certain customers as they enter or leave with their ob­jects of trade. Nor is that all. Some of those very same customers, and certain others with no visible means of support or trade, are in a sense deputized to collect taxes in their own behalf—a welfare payment, subsidy, exemption, or “free pass” of some sort.

These are not simple beggars waiting for crumbs outside the gates of the market. However peaceful may seem to be their ex­actions from would-be traders, these tax collectors and deputies are armed with the full force of the law, prepared for whatever violence is necessary to enforce their one-way transactions. Their picket signs also serve as clubs. These activities outside the gates are marked by violence, always threatened and often invoked.

The taxpayer who seeks any re­turn on the goods and services taxed from him must seek outside the market—look to political chan­nels to get back “his share”—per­haps in outer space, or in Vietnam, or in Appalachia, or in the urban ghettos, or in the mailbox, or on the highway, or in the crowded schoolroom, or hospital, or jail. In other words, the taxpayer tends to be driven from the market, to the extent that he is taxed for other than the minimal requirements for policing the market. And outside the market, the game or the strug­gle is strictly violent; to the victor belong the spoils.

“Public Sector” Wars

The names may be somewhat misleading, but the peaceful trans­actions or voluntary exchanges within the market are sometimes referred to as occurring in “the private sector”; and the so-called “public sector” encompasses those coercive activities outside the mar­ket—wars of one kind or another: against foreign aggressors, against communists, against capi­talists, against poverty, against ignorance, against prejudice, against bias, against every con­ceivable obstacle that stands be­tween any man and the something he wants without earning it.

Their names are legion who pro­fess good will toward man in their schemes to channel ever more re­sources and individuals into the “public sector.” But whether or not they know it, they are the war­mongers in our society. They are condemning everyone involved, in­cluding their intended benefici­aries, to violent methods and to the results of violence.

If one tires of the class struggle and conflict and violence charac­teristic of men trying to function in the public sector, if he realistic­ally seeks peace, then he must search for it in the private sector. A condition for admission to the market is that one enter and oper­ate through peaceful means only. And only through peaceful means can peace be achieved. The happy dividend is more goods and serv­ices available to all men than under any other arrangement.