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The Progressive Problem Understanding Money

November 19, 2012

Progressives don’t like money because it gets in the way of their agenda and single-handedly disproves the validity of their ideology.  This is because they have the habit of separating the concept of money from the concept of value as well as separating the concept of value from each individual’s right to determine an item’s particular value for themselves.  It is for these reasons that socialist systems cannot co-exist with free enterprise for very long.

Money and Value

Prior to the invention of paper money, along with  the fractional banking system, even the lowest peasant must have understood the fact that money is value and that the former cannot be separated from the latter.  Stories of ignorant peasants refusing to accept the paper currency offered by sophisticated gentleman from the city have been used to support two completely different narratives.  In the one case, the peasants are shown to be illiterate and ignorant fools who are simply too slow or uneducated to fully understand the concept that the paper being offered represents something of value, while in the other case those same peasants may be shown as understanding that those gentleman from the city are attempting to exchange nothing for something.  Although progressives often speak of value, particularly in regards to labor, the reality is that their entire system is built on the notion that a just society can be produced by reversing the tie between money and value and thus claim that by printing more money the society is also producing more value.  What they fail to understand is that “solving” the problem of not having enough money is not the same thing as solving the problem of having too little real wealth to go around.

Determining Value

In a free enterprise system the value of any good or service is determined by the law of supply and demand.  This free market approach to determining value often results in apparent great inequities which many complain about and progressives attempt to exploit.  Progressives tend to believe that there is a better way to determine value and that they are uniquely qualified to make that determination.  There are a number of problems with this approach.

It may seem, for example, that a teacher should make more than the student that goes on to make millions of dollars applying the knowledge learned in the classroom.  The problem with this view is that it does not take into account a number of other relevant factors.  In the first place, depending on the subject, by expanding the comparison of financial success to include all the students of a particular teacher, one might find that the student in question has also far surpassed the success of his fellow students.  In the second place, if virtually all of the students go on to make more than the teacher, the law of supply and demand would suggest that the compensation of the teacher should rise in response to the demand, whether inside or outside the classroom.  Finally, for any number of reasons, there may be more people willing and able to teach a particular subject than there are persons with the requisite skill and ability to perform at a high level in the marketplace.

Although many progressives point to  “excessive” executive compensation packages in support of their argument against the free market system, this article will focus on the world of sports which also comes in for its fair share of criticism.  There are actually two ways of looking at the issue and, depending on the perspective, are somewhat in contradiction to each other.  The first way to look at it is to view it as a validation, or rebuke,  of the free enterprise system.  The rebuke lies in the fact that there are those who argue that a teacher should be more valued than a football player and thus the disparity in salaries borders on the obscene.  The question of “should” is always at the heart of any progressive argument and the validity of the “should” is always determined by the progressive movement itself.  The problem with “should” is that people spend money based on their personal perspective of what does or does not have value.  Whether it be illicit drugs, scarce goods found only on the black market, or a coffee and doughnut down at the local 7-11 the value of the good or service will eventually be determined by supply and demand.

If we return to the world of sports and take the NFL as an example, few would argue against the fact that the number of persons willing and able to play at the level required to be successful in the NFL is much more limited than the supply of willing and able qualified teachers.  Although it might seem “unfair” to the teacher, the fact remains that the individual football player derives his income from more people while at the same time evidencing an ability to perform at a higher level than all but a limited number of others in his chosen profession.  This is not to diminish the value of the teacher, rather it is to suggest that there are a number of factors which must be considered when attempting to determine value.

On the other hand, there is another side to the sports equation which is why I chose to use it as my example.  The truth of the matter is what we see here reflects the negative consequences which accrue to the general population when the progressive narrative gains currency.  High salaries and high ticket prices are the direct result of the collusion between big business, big labor, and big government.  The only way that the progressive business model can be sustained is by making somebody else pay for it.

I’m afraid I have once again been guilty of extending the length of an article beyond what I had initially projected and thus I will leave you with one final thought….Successful countries remain successful by adhering to the rules of the free enterprise system.  Perhaps that issue can be addressed on a different day.

Thank you…Comments are not only welcome, but appreciated.

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