reply to post by NoRulesAllowed
There are many things wrong with this post, but I'll stick to the highlights. First, you are treating "money" as if it has value in and of itself.
This is an extremely common mistake, since the most people know about economics is that they can exchange their money for the things that they value.
Do you really think that adding a few zeros onto an account statement creates anything of value or any real wealth? All you have really done is use
a few more drops of ink or blips of electricity. In other words, money by itself has almost no value. No matter how fancy you make the paper, if you
can't trade it for anything else, people won't want it and won't accept it in exchange for what they have worked to produce. Money is just a
temporary store of value -- as long as people are willing to accept that "worthless" token (i.e. money) in exchange for their work or products. The
paper or the ink or the blips of electricity have little to no value by themselves. So, you are making a huge mistake by thinking that all value
exists only in the form of money.
What really has value are the things that we produce or the services we perform, and the amount of value is measured not just by ourselves but also by
the others who want to use or consume what we produce. Value is also completely subjective and completely individual. No two people ever have
exactly the same values or ranking of those values, so no two people will ever value something exactly the same for exactly the same reasons. This is
one of the central flaws in socialism, because socialists believe that you should value everything exactly as everyone else does. They believe that
prices can be set "objectively", which is inane.
When a company offers a product or service at a certain price level, they usually set it at or above the level they value those products or services
(i.e. at or above the "cost"), and they are hoping that enough other people will value those things more highly than that and will purchase them.
If the money supply fluctuates, then the number of dollars (or pesos, euros, etc.) that the item is sold for will adjust accordingly. If they have
lots of money but few goods, then the goods will have a higher price, and if they have lots of goods or services but little money, then the goods or
services will show a lower price. However, since this will happen across everything in this little economy, the implied value of those goods and
services really hasn't changed.
So, if we look at your scenario again, there is only a problem if the people are unable to do anything else that has any value to anyone else.
Ironically, your scenario highlights another problem of socialism -- all of the capital (i.e. tools, land, factories, etc.) is owned by just one
entity -- the state. In capitalism, the people are allowed to own the means of production, so they would have their own tools, their own land, etc.,
and they would be able to produce things that they could trade to sustain their own lives. They could grow their own food on their own land, they
could produce products with their own tools, and they could produce products inside their own homes. You forget that the people had to have some way
to live before the factory was built. And, a monolithic structure like you propose is what happens under socialism, not capitalism. If there
weren't other businesses around, the people couldn't buy food, couldn't get housing -- couldn't get anything other than the "blue widgets". And
-- most importantly -- if they didn't have "money" to use as a temporary store of value, then they could simply barter the goods and services that
they produced. However, whether the "money" was paper, coins, silver, gold, oil, salt, or bread, etc., etc., they would quickly find something that
was easily traded in place of the actual work it represented. Every society has done so, and there is no reason to believe that this society
wouldn't be able to figure out the same thing.
You have other major problems with what you describe as "socialism", as well as problems with where the money comes from and with where it goes, but
this post is long enough, so I'll leave it alone for now.