In a free market, money (and when I say money I really mean wealth, not printed paper) would not be the government’s to decide where to put it. And that is an underrated benefit of a free market: only those who earn the money get to spend it. Only those who generate wealth have control of wealth.
Wealth can be anything of value. If you have dirt in your backyard, grow some vegetables. There, now you have some wealth in vegetables and you can “spend” your wealth, trade it for something of value to you. But currently government gets to spend at least 25% (federal budget being almost $4 trillion, 25% of the $16 trillion Gross Domestic Product) and probably closer to 50% (when state and local taxes are figured in) of every cent of wealth produced in America in any given year.
At best, 75% of what is actually created and earned is spent by the people who did the creating and the earning, but probably just half of what is earned is spent by those who earned it. When other people get to use wealth that someone else created, it does not a free market make. And why is an economy better organized when the creators of wealth control the wealth?
Well it seems pretty obvious to me. Who spends money smarter: Mom and Dad, or the kids? Mom and Dad buy a new boiler that saves energy costs, the kids want to buy a new pool. Mom and Dad want to put a little extra away for retirement, the kids want to be taken to Six Flags with all their friends. The people who earn the money are generally more careful with where that money goes. And comparing the inhabitants of Washington DC to children is probably more insulting to the kids.
This does not mean that those who can’t earn money simply won’t get any. It means the people who produced the wealth will decide who and under what circumstances people will get help. This might sound cruel until you consider the alternative, how we currently operate. Thieves steal at least 25% of the wealth, keep most for themselves and their friends, and decide where a tiny fraction will go to supposedly “help the poor”. The only thing that allows them to continue stealing is that they have convinced enough people they will spend the stolen money better than those from whom they stole it.
Why the hell would we think thieves, literally people who have no problem stealing our money at the point of a gun, would spend that money in a better way than the person who put in the blood, sweat, and tears to produce that wealth?
But the plunderers have fooled enough people, and thus, people wrongfully assume their tax dollars will help the less fortunate. In contrast, those who donate to charity are likely to seek out a charity that uses the funds efficiently, or at least uses the funds for a cause the benefactor believes in.
I didn’t want my tax dollars to go to billionaire George Kaiser for his bankrupt company Solyndra. If it was a good solar company, I would think a billionaire might have the rolodex to raise the funds without having to steal it from me. I don’t want my tax dollars to bomb weddings in the middle east. I think a volunteer militia would be a cheap and effective form of “homeland security”, especially if there is no central machinery (government) for conquerers to take over and use against the people. I don’t think wealth creators would allow a large portion of their charitable contributions to be spent on liquor, cigarettes, and drugs. I don’t think earners would keep paying for “security” that kills more innocent people than terrorists.
These are all the things money would not be going toward when spent by the people who earned it. That is often where the discussion ends, but the money would not disapear. It would instead be spent on actual beneficial things: not beneficial to some arbitrary group of thieves, beneficial for the person who earned it. And also beneficial to the person that the wealth is voluntarily being transferred to, in exchange for a service or product.
If I grow vegetables in my back yard, I am not going to benefit from exploding the skull of a twelve year old Iraqi kid, nor a twelve year old Chicago kid; especially if it takes me half my livelihood to do it. Instead I’ll probably give some vegetables away to the homeless person that I know personally, or the soup kitchen I trust to feed the needy. I might throw some carrots and potatoes into the pot for a neighborhood watch, and withdraw them if this neighborhood watch harasses me.
I am simplifying. Of course we would not have to go back to trading potatoes and whiskey (unless you wanted to). The point is if we control what we produce, that wealth will be placed more beneficially for us. In doing so, the wealth is placed more beneficially for all of society. This is because in order to get my money, instead of figuring out how to rob me, someone has to figure out how to please me. And if there is no one spending that has not first earned, that means everyone will be an earner, and no one will be a plunderer.
So really, it is impossible to tell just how awesome a free market would be, while 50% of what is currently produced is stolen and squandered. Would a billion fewer cigarettes be bought? Would that money go towards educating children? Would a million fewer bombs be made? Would that money go towards a revolutionary new transportation? I think the evidence says, yes, something like that would happen. Because right now I don’t buy or smoke any cigarettes, yet my money still pays for someone else’s cigarettes to be made. Right now I don’t purchase or make bombs. Yet my money pays for bombs to be made.
People talk about the wealth gap as if the non-existant free market is to blame. Then why has the wealth gap increased alongside government expenditures? I haven’t given any money to the folks on Wall Street, and the only money they stole from me (bailouts) was facilitated by the government.
The answer is obvious. All the bad effects in this economy are created by the people who are allowed to spend money without earning it.