There are two ways to allocate and distribute scarce resources. By resource – I mean anything from a barrel of oil, to the time of a physician, to a kernel of corn, to a restaurant waiter’s attention.
The first way is the market-driven way. The capitalist way. A combination of independent people’s skill sets, the overall supply of a given resource, the demand for that resource and competition of suppliers and bidders bring the resource to those people who want it at the best possible price.
The second way is the political way. In the political distribution model, a small group of bureaucrats decide who gets the resource at what price. How do they make this decision? A combination of popular appeal, graft, nepotism, thievery, and bribery helps bureaucrats decide who gets what, for how much.
Once you understand the division between these two methods of resource distribution, you can begin to understand why governments tend to fail the very people they seek to help. The political method of distribution eventually becomes impossible to sustain – since it inadequately rewards producers, and unfairly rewards favored beneficiaries. It creates untenable price mechanisms that do not allow for the kind of healthy competition that ensures steady, reliable supply to match real demand. Eventually, there’s nothing left to steal. Nothing left to distribute.
Understanding these two types of distribution also helps you understand why a politically based monetary system is doomed to failure as well.
Today, we’re asked to believe that a market economy can work well – nay, better – if the money that’s used in this system is controlled by a small group of bureaucrats who decide how much money costs, who gets the money, when they get the money and how much of it.
Right now, our money is politically distributed. Such an idea should be as despised by free men as much (if not more so) than a constraint on our ability to travel freely, to choose our own religion, to speak and write without fear of prosecution and imprisonment.
We should despise a politically allocated money system at least as much as we would despise a politically allocated food or oil supply.
Imagine a world where the supply of corn – instead of dollars – was controlled by a dozen PhD economists sitting in a fancy building in Washington, D.C.
We would revolt. We would tear that building down and erect a monument to the corn wars. We would honor the dead and revile the corn economists for the massive disruptions, food lines, starvation and poverty that they caused.
Today, however, you don’t have to bow down to Ben Bernanke. Nor am I recommending that you go tear down the Federal Reserve building.
You don’t have to shoot a gun in order to effect change for yourself. You don’t have to throw a brick to topple this false money idol.
You can (and should) rebel against Ben Bernanke, the Federal Reserve and the dollar. You can choose an alternate form of money that’s still outside of the clutches of the US Government. You can protect yourself from the illegitimacy of our political money system.
And today, with gold and silver prices undergoing a significant correction, the time has rarely been better.