In which we meet Mr. Sharpe and his staff and Niall tells the truth perhaps at some cost.
He was rather portly and wore what looked like a silk suit under a flowing cape. He had a carnation in his buttonhole and his shoes shone with an almost inner glow. He had a large ring on his left hand that must have had over two carats of diamonds around a large ruby. He walked into the classroom, saw the chair behind the table, snorted and gestured to someone in the hallway. An older man in a chauffeur’s uniform pushed in on a dolly a rather large reclining chair and positioned it beside the table.
“Thanks, Reggie. That should do,” he said and the man in uniform took the dolly with him as he left.
Rotating his large paunch toward the class, he seemed to examine each of the expectant faces before him, then grimaced and turned toward the chair. “Open” he said seeming to address the chair. It obediently tilted itself toward him and rose up to receive his considerable bulk. He leaned back into the leather covered cushions and the chair gently adjusted its position until his movements indicated satisfaction. For a moment he closed his eyes and seemed about to take a nap. Then he roused himself, tilted slightly forward and addressed the class.
“I am Mr. Sharpe. I’ll never be a payer. I earned my wealth and I don’t intend to ever give it up. But I know how the payer organization works and you need to know as well.
“The payer organization is both a bureaucracy and a free market. Until you understand how it can be both of these things at the same time you’ll never understand it.”
He smacked his lips a couple of times, sighed, and continued.
“How is it a bureaucracy? It has a hierarchical structure composed of offices. That is the essence of bureaucracy. There is a considerable division of labor within the organization.” He seemed to be reciting by rote something memorized and his tone became lower and quieter. “Most payers are rather highly specialized. Their actions are coordinated by those above them in the hierarchy. Some of the people in this hierarchy are not payers, of course, but their skills are needed to operate the hierarchy. Where possible, payers do the administrative work, still called paper shuffling, even though there is little paper left in administration.”
He gave a slight smile and lowered his gaze from the ceiling to which it had slowly migrated. He smacked his lips again and licked them slightly. This time the sigh was even larger, puffing his cheeks.
“You can call the payer organization offices and someone answers the phone. You can ask questions and get information. You can praise or complain. There are buildings of payer offices, though most payers don’t have offices.”
He paused again in his rather dry lecture. One hand rubbed his belly for a moment. “Reggie?”
“Right here, sir,” came from the hallway and Reggie reappeared now wearing what appeared to be the garb of a bartender from the 1890’s, complete with apron and garter belts holding his sleeves. He carried in one hand a small table and in the other a tall, elegant glass and a brown bottle with beads of moisture beginning to condense on its surface. In a few seconds, Reggie had placed the table beside Mr. Sharpe, and placed the glass and bottle side by side on the table within easy reach. Then he took a bottle opener from his pocket and placed it next to the still sealed bottle and left the room.
Mr. Sharpe looked achingly at the goods on the table, then turned resolutely away.
“From just looking at the offices and watching what goes on there you would never know that the people involved were payers except for the way they dress. But these bureaucrats oversee a tremendous information processing and communications organization.” His gaze wandered back to the bottle then away again to the class. “Billions of facts are processed daily around the clock. They keep track of all the luxury items in the economy and most of the capital goods. They keep track of most of the people as producers and all the people as consumers, including the payers.”
He smacked his lips a couple more times, glanced furtively at the bottle and continued.
“The hierarchy is a huge locus of power within the economy, somewhat similar to but much larger than any authoritarian government. The influence of the organization extends from the highest councils of the largest enterprises to the simplest producer of home made goods. Decisions made in the organization influence the directions the economy will take quite strongly.”
Sitting up suddenly to an almost upright position (with the cooperation of the chair) he suddenly barked “Do you believe that the payer organization is a bureaucracy?”
There was a startled nodding of heads and murmurs of agreement.
“Whew. That calls for a sip, I believe.”
From his how upright position he turned eagerly toward his reward. Grasping the bottle in his left hand and the opener in his right, he caressingly and lovingly drew off the metal cap from the bottle. Then, returning the opener to the table, he took the bottle in his right hand, the glass in his left, and began the pour, a look of delight, almost rapture, on his face. The golden liquid slipped quietly, gently, and smoothly into the bottom of the curved glassware, curling and bubbling with delighted effervescence at its release from captivity. Closing his eyes he brought the glass to his lips and, sighing with pleasure, took the first sip, then a larger one. Carefully placing the glass once again on its coaster, he turned toward the class and issued and enormous belch.
“All right. That was the easy part,” he said leaving the class in doubt as to whether he was referring to the beer and the belch or the explanation. “The payers look like an organization even down to nearly wearing a uniform. Their offices look like offices. But they don’t look like a free market, do they.”
A puzzled shaking of heads and murmurs of “no” was his answer.
“Are there any of you who do not know what supply and demand are? Never mind, you probably don’t know even if you think you do. A market is a situation in which trade takes place. Notice I did not say it was a place. Thousands of years ago a market had a particular location. People brought to such places what they were willing to offer and found there others with goods to exchange. Today you don’t have to be near someone in order to give them something or get something from them. Therefore, a market today is a situation not a location. It’s an opportunity to exchange with other people.”
“Do payers exchange with each other?” he asked eyeing them warily.
After a moment of hesitation there was a shaking of heads and murmurs of “no.”
He sighed hugely. He shook his head and looked to the heavens or at least to the ceiling. Then he confronted them. “Do payers exchange with each other? What do they have to exchange?” he barked.
“Money?” (We will omit the name of party who gave this foolish answer to protect the guilty.)
“You people are going to be payers? We’ll never survive it. You’ll destroy the economy.” Mr. Sharpe groaned in a magnificent display of disappointment.
“Payers can’t give money to each other,” Oscar said.
“Bravo,” he said slowly clapping his hands in sarcastic applause.
“What do payers have to exchange?” he repeated staring at them one after another with a scowl.
“Knowledge?” Natalie said.
“There,” he smiled serenely. “That wasn’t so hard, was it? Knowledge, information. What must a payer have to do his job? Knowledge and information. A payer has to be aware of benefits and costs. A payer has to understand how things are interrelated. Could you walk out of here right now, see some benefit, and know whom to pay and how much? I don’t think so. You’d need a lot more information and probably more knowledge than you have now.”
“Each of you has information and can gather more. You have knowledge gained over the course of your respective lifetimes. Some of you know about one or more kinds of work. You may have been a brick layer,” he said pointing at Leyden, who giggled in response. “You may have been a secretary,” he said directing his gaze at Niall who bowed slightly from the waist in acknowledgement, with a grin. “You may have been a stay at home father,” he said sighing in the general direction of Oscar, whose eyes got big. “You may have been a farmer?” he inquired of Wendy, whose broad smile and nod indicated he wasn’t far from wrong. Whatever things you did with your life, you should have learned from it. You should have some understanding of how things work. Your fellow payers need your knowledge and understanding just as you need theirs. When you eat at the lunchroom, you can notice what foods people prefer and which they avoid. A few of you may have some idea of the nutritional value of the various offerings.”
Mr. Sharpe paused, looked at the still half full glass, then reached for it again. This drink was only a couple of swallows. He looked almost at the point of tears as he contemplated how little of the golden liquid remained in the glass. Then getting control of himself he resolutely turned back to the class and continued. “If some payers needed to know what food was eaten and what the nutritional value of that eaten food was, you might have that information for them. Therefore you can exchange with them, discovering from them what you need to know and giving to them some of what they need to know.
“This is exchange, people. This is give and take. This is trade. There is also information you need in order to coordinate your actions with the actions of the other payers. For example, where will your knowledge and information be most useful to the other payers? How much money should you have available to pay for certain kinds of benefits? What proportion of the pay for an organization should go to the various roles played in that organization?”
Grimacing, he went back to his bored lecturer tone and rocked his head from side to side as he almost recited, “In a hierarchy, orders flow from the top down. What flows back up?”
“Information,” Oscar announced trying to sound more confident than he felt.
“Well. You’re getting better,” Mr. Sharpe sounded somewhat surprised. “Yes. Information flows up the hierarchy. Why does information flow up?”
“The people at the top want to know what’s happening so they can make good decisions.” D.W. said.
“Do the people at the top get accurate information?”
Leyden said, “No. They hear what they want to hear. Their lackeys learn to tell them just what they want to hear.”
Niall said, “Information acquires what you might call static along the way. Every time information goes from person A to person B, some of it is lost and misunderstanding creeps in. The signal to noise ratio gets worse.”
“All right,” the instructor said, taking the last sip of his tall, cool one, now departed, “what does this mean for an organization, especially one as big as the payers?”
There was a painful pause as the class digested the implications of what they had just heard. They were relieved to see Reggie reappear to take away the table and the empty containers for it gave them time to think. Finally, Niall said, “The people at the top who make the decisions don’t have the information they need to make those decisions. Therefore, at best, they are making informed guesses.”
“Therefore?” the instructor said raising an eyebrow.
Leyden said thoughtfully, “Therefore, those at the top shouldn”t be making the decisions.”
“That seems obvious doesn’t it?” the instructor gave a beatific smile looking, from certain angles, like an overgrown cherub in an expensive suit.
“The people at the top should not be making the decisions,” he continued. “So how can decisions be made if you don’t have someone at the top making them?”
“Elections!” Clayton burst out. “Decisions can be made by voting.”
“Good. Does the payer organization make any decisions by elections?”
“Yes. We had that in our history course,” Natalie said. “We categorize products and services as luxuries, capital, and necessities by the votes of samples drawn from all the payers. We also use elections to decide on the prices of luxuries. And ah ... oh, we also use elections to decide on the proportions of the available money to allocate to various benefits.”
Niall jumped in, “How are those votes? They’re more like surveys or polls of the payers. The people who design the questionnaires and who interpret the answers can get whatever result they want. The people at the top are still making the decisions. They just don’t want to admit it.”
“OK, Niall, let’s take these three kinds of elections or surveys one at a time and see how they work. First was the categorizing of products and services. This is a simple question. ‘Is this item a luxury, a necessity, or capital?’ Do you see some way to bias that question? More importantly, do you see some advantage to anyone for categorizing some item one way or another?”
“Sure,” Leyden put in. “If the item’s a necessity, the payers get to have it. That gives them an incentive to make luxuries into necessities.”
“I think we all agree that’s true. That’s an incentive to label all consumer goods as being necessities. How will people treat payers if there are few luxuries?”
“I don’t know.”
“Well, you do realize that the amount of money the payers can pay is determined by the amount of luxury goods and services available for sale. So if almost every consumer good and service is a necessity, the payers would have almost no money to pay with. What would that do to the respect and attention payers now get?”
“I guess that wouldn’t be so good for us,” Leyden admitted.
“Let’s take clothes, for example. What if all clothes were labeled necessities? How could you distinguish a payer from anybody else?”
Leyden looked quickly down at her hand decorated stockings.
“You couldn’t,” Niall said.
“Let’s consider another, even more basic point, the proportion of people in the population who are payers. If people don’t have to give up much to become a payer, then there should be a lot more people who are willing to become payers for the power. That could result in far too many payers and therefore far too little respect and power and goods, for that matter, to go around. If too many things are labeled as necessities, there will be too many payers. The payers wouldn’t like that. So they have incentives to keep the list of necessities within bounds.”
“But by far the most important reason why not too many things are labeled as necessities is that the other people in the society wouldn’t like it,” Mr. Sharpe continued. “Payers have to live among the common people and are, therefore, quite sensitive to how other people feel about things, especially how they feel about payers. The payers fear appearing greedy.”
“Therefore, there’s a balance between incentives to make more things necessities and more things luxuries. Those random samples of the payers assure that we come pretty close to the sentiments of the society as a whole when those decisions are made. Reggie, please!”
Once again Reggie appeared in the doorway. This time, he appeared in the guise of a head waiter in a luxury restaurant and in addition to a pristine white cloth over his left arm, he carried a bowl from which there issued visible evidence of hot water and the most enticing of aromas. He brought the tempting prize close to Mr. Sharpe’s face and gently wafted the aroma toward his client. Mr. Sharpe’s eyes closed slowly then snapped open. “Bread, what breads have we?”
Reggie reached into a pocket, drew out a brown card, and handed it to Mr. Sharpe with a small bow. Mr. Sharpe viewed it critically and made his selections. Reggie accepted the return of the card with another small bow and departed taking the bowl of soup with him.
Mr. Sharpe looked lingeringly after Reggie or perhaps after the soup then turned once again to the class.
“The next kind of election is the kind that sets prices for luxury items. This is more of a calculation in many respects, since the payers try to set the prices at what it costs to produce the good or service. The use of a large sample of payers makes use of what has been called the Delphi effect. This is the tendency of a large sample of people to be better at predicting the future accurately than any individual, no matter how ‘expert.’ The questions on these surveys are ‘This is the item, these are the resources used to create it, what should the price be?’ As you can see it’s difficult to imagine slanting such a question in any particular direction. Besides, the closer the payers come to setting the price at the actual cost of production, the more wealth there is for everyone else and the better people will like the payers. Therefore, there is no incentive to try to cheat in some direction. Even the producers of the luxuries maximize their own pay if the prices are set at production costs. Do you see?”
“Yes, sir. Your description raises quite a number of other questions, but I do see that there is little opportunity for bias and no motivation for attempting to bias the results,” Niall nodded.
“Moving on, then, to the last kind of election, we get the allocation of money to various kinds of benefits. Here is where you see the most scope for cheating, right Niall?”
“Yes, I do. Those who produce steel want more money for steel. Those who produce cloth want more money for cloth. There must be lobbying and pressure groups and everything.”
“But Niall, they are allocating money for kinds of benefits, not for kinds of products. The allocations are for such things as environmental protection, health, education, and security. How can you tell what product will help each of those benefits? I would imagine that steel, for example, would contribute to all of them, depending on how it is used and how it is produced. The same thing holds for cloth. What kind of work did you do last?”
“I worked at the Los Alamos computer facility which would help everything but before that I drove a truck for a TCP plant which mostly made oil, gas, and electricity,” Niall answered.
“Is there any benefit you can think of that the production of energy would not contribute to? What benefit or benefits would you have lobbied for?”
Niall paused, then said, reluctantly, “I don’t know.”
“Now let’s suppose that the allocation is made for a month and then something unexpected happens, like, say, a volcano erupting on the West Coast. Do the payers have to stick with their former decision? Do they need permission to begin paying for benefits that were not expected to be needed when the decision was made? Clearly the payers’ individual decisions will adapt and adjust to the circumstances in which they find themselves. Therefore, the allocation of money to the various kinds of benefits is more in the nature of the setting of policy rather than the creating of a budget.”
By this time the entire class was being distracted by the aroma of fresh baked bread coming into the room from the hallway. Reggie and two helpers dressed as waiters now brought in another, larger table which fitted exactly over the large chair in which Mr. Sharpe semi-reclined. The table had a fine linen cloth almost painfully white and was graced by silver, china, and crystal. Reggie brought up the rear with a silver soup tureen. As he placed it on the table in a prominent position, the others hurried out and back with containers from which the bread aromas were issuing plus what looked like butter and a set of jam pots. Several kinds of bread were taken from their containers and placed about the table. Reggie picked up the ladle and the thick bowl that was in front of Mr. Sharpe and proceeded to spoon two portions of the soup into the bowl. Placing it before Mr. Sharpe he once again bowed slightly and withdrew. Steam rose gently from the various foods and moisture condensed on the crystal goblet which seemed to contain water. Niall’s stomach gurgled loudly which broke the mood of the class into one of amusement.
Mr. Sharpe continued the presentation while selecting a bread and spreading it with the softened butter and some of the jam.
“Do you see how these kinds of decisions can be made by payer votes or surveys?”
“OK. I will accept that they can make meaningful decisions by these so-called elections. At least until I can think of a reason not to,” Niall grinned.
The instructor took a large bite of the bread, readjusted his bulk in the recliner, then addressed the class.
“We are considering how the payer organization is both a bureaucracy and a free market. So far we have easily observed that the organization is a bureaucracy. But we have not seriously addressed the issue of the free market aspects of that organization.” After a pause to address the soup with a gentle and graceful dip of his spoon he continued. “The first step in that direction was to point out that the organization is controlled by the information that moves up the organization both in the sense of reporting to superiors, which is standard operating procedure for bureaucracies, but also in the sense of making decisions of various kinds through elections. The main thing I want you to notice is that the organization is really controlled from below. That is, its policies and directions and major decisions are made by these surveys of samples of the membership. This is the mechanism by which the free market aspects of the organization become important.”
More bread and a couple of sips of the still hot soup were enjoyed.
“A free market operates by individual traders doing what seems best for themselves without having to take into account artificial restrictions, limitations, and controls. Gravity is a restriction on us all, sadly,” he said glancing down at the bulk of his midsection. “But it’s not an artificial restriction. The enforcement of laws controlling trade is an artificial restriction. A monopoly is an artificial restriction. Taxes are an artificial restriction. In a free market the only thing one must take into account is one’s own best interests. One can give when one decides it is best and keep when one decides that is best.”
“Take the role of a producer in our economy. You provide work of some sort. Who is able to buy your work?”
“Everyone who has money to spend,” Niall said.
“No,” Clayton said. “People with money to spend can’t give it to you. It’s the payers who can give you money.”
Niall felt a little hot in the cheeks.
The instructor said, “So only the payers can give you money?”
“Of course. Niall just isn’t used to our money quite yet. He’s only been in the country for about 6 months.” Oscar said, leaning over to punch Niall gently on the shoulder.
“Does that mean that there is only one buyer for your work?”
“No,” Leyden said, “any of the payers can pay you for your work. There are millions of payers.”
“So we have millions of payers who buy work and millions of producers who sell their work. Are the payers controlled or artificially restricted in what they buy or what they pay for it? This is a crucial question, so consider it carefully.”
The class respectfully was quiet for a while which gave Mr. Sharpe an opportunity to devote more attention to his soup which still needed cooling.
Niall was one of the first to hold up his hand to give an answer.
“I think we just discussed the decisions of the payer organization that tells the payers how much they can pay as an organization and what they are to pay for. Therefore I would say the controls and restrictions are artificial.”
There was a pause and the instructor looked around the room with that one raised eyebrow. Finally, Natalie said, “OK, I’ll take the other side. I say that those controls are natural and are part of the market itself.”
The instructor raised his hand and said, “I expect full participation. You may switch sides of the argument at will, but I want to hear well reasoned arguments on both sides. This is how you can show me that you understand the payer organization and its functioning. Since the organization does make decisions and since it is a bureaucracy, the burden of proof will be with those who contend that the controls and restrictions are natural. Who would like to go first? Natalie?” And he applied himself to what was left of his snack.
“We discussed in another class that the payers are free to pay as they want to pay. That is, they must take the consequences of their payments but there is no law that controls their paying and there never will be, since that would cost the legislators money.”
“If no one else has a rebuttal to that statement I will recognize Niall. Ah, good, Clayton?”
“Just because the government doesn’t have a law or any enforcement mechanism doesn’t mean there can’t be other sources of artificial controls. The payers’ organization could create artificial controls internally. My daddy used to tell me about how the union leaders would manipulate what were supposed to be democratic organizations.”
“Will you let that stand? Is there any reason to reject that assertion? Come on, think. Oscar?”
“If the payer organization is to institute a control or restriction it would have to have some way of enforcing that restriction. It would have to have some means of punishing a payer who diverged from the others. The payers cannot employ force, such as corporal punishment, since that would be against the law and other payers would pay to have that law enforced. Thus, the only kind of punishment that would be available would be social condemnation or ostracism or something like that. These responses are natural, like gravity, and not artificial like laws.”
“Response? Clayton again.”
“But the organization could come up with rules and code them into the computer. In fact, we’ve all taken classes in how to make a payment and the procedures that must be followed in such cases. These are restrictions on the payers that are set by the organization and the computer enforces them.”
“Come on, someone besides Oscar. Yes, Wendy.”
“The computer is not restricting how much a payer can pay nor is it controlling who can be paid so long as one is not trying to pay another payer. The computer is more like a cash register than an enforcement agency. The computer will not limit the decisions that the payers make, individually or in groups, for large payments, concerning what should be paid for or how much. Therefore, it doesn’t restrict nor restrain trade between payers and workers.”
“Rebuttal, anyone? Niall? Is there some way in which the payer organization controls or restricts the payments which individual payers or groups of payers can make?”
Mr. Sharpe paused, waiting for another comment and taking another bite of his diminishing bread supply. Finally, “OK, what does restrict the size of the payments?”
“The production of luxuries,” several voices said.
“What limits does a payer have in paying?”
“They do have a limit for individual payments but so does every trader in a POM market. Nobody has unlimited funds,” Wendy said.
“So, from the point of view of the producer, the payers constitute a large market for the work producers do. Are the payers free to buy what they wish, so long as they stay within their budgets?”
There was general agreement.
“Does that mean that from the producer’s point of view, there is a free market?”
“No,” Niall said forcefully. “There is no trade between individual workers or producers and individual payers. The workers give things to other people and the payers give things to the workers. That isn’t a trade.”
“Yes, Sir?” Reggie said, appearing in the doorway looking every inch as one would imagine a very correct butler right up to the white tie and tails.
“My feet hurt, Reggie.”
“Right away, sir,” Reggie responded and went out the door.
“Niall, is there anything about a free market that requires that the exchanges of goods and services must be between pairs of people? Can there not be an exchange in which person A gives something to person B and person B gives something to person C and person C gives something to person A? That’s a three party exchange in which each party is giving something and each party is getting something but there’s no direct exchange between any two of them. If there are no artificial restrictions on that exchange, wouldn’t that be an example of a free market at work?”
“But it isn’t trade,” Niall maintained.
Reggie reappeared not quite so correctly dressed with a waistcoat (tasteful though not subdued) and white gloves followed by what looked to be a Balinese dancing girl by her costume though without the rings and long fingernails. She carried what appeared to be a carpetbag.
“But is it a market and is it free? If people are exchanging goods and services freely, isn’t that situation a free market?”
Reggie moved the table aside and knelt at Mr. Sharpe’s feet, gently and carefully drawing off his shoes. Then he carefully removed the socks that covered the feet.
“You can call it whatever you like but it isn’t trade. Trade is between two parties, just two. It isn’t a merry-go-round of gifts or whatever you call them,” Niall said trying to ignore the operations at the feet of the instructor.
“We’ll call it a free market then. Next consider a free market in a POM economy. You will have to imagine a hypothetical free market there, since there are no industrial economy free markets that use physical object monies. In every case, there are both formal restrictions like laws and informal and often illegal restrictions like monopolies and cartels. So in a POM free market the producer brings something to market to trade. If it’s a product, the producer will offer it for sale, presumably at the prevailing market price or a little higher, and wait to see of anyone is willing to offer that much money for his particular product. If no one does, the producer may reduce the asking price. If someone does offer the asked-for price, a trade of money for goods may take place.”
By this time Reggie had taken the table with the remains of Mr. Shape’s light repast from the room and the young woman had opened her bag and withdrawn several small bottles and jars.
“In our economy, the payer is in the position of the POM consumer in the sense that the payer enters the market with money to offer for a certain kind of benefit, presumably at the prevailing market amount for that benefit. If no producer is willing to provide that benefit, then the payer may decide to increase the amount that she is willing to pay. Do you see the parallels here? Do you see how the payer and the producer each have choices in how to invest their respective resources? The producer can invest his work in the production of any benefit he chooses. The payer can invest his money in any producer he chooses.”
The woman had made her selections from among the items in front of her and opening one, she put a small quantity of something that smelled exotic in her palm, placed her other palm over it for a few moments, the with her fingertips she began to apply the material to the soles of Mr. Sharps feet. The strokes were slow and light.
‘Wait. This isn’t the same at all,” Niall burst out. “The payer doesn’t come to an agreement with the producer on how much the producer will be paid for the benefit. There is no contract between them. The producer doesn’t even know for sure which payer will pay him or whether he will be paid at all. The payers are not required to pay him, even if he deserves it. The producer is totally at the mercy of the payers. And when the payers do pay, the producer cannot very well take back his work and say that he isn’t willing to do that work for that little amount of money. It isn’t like the POM free market at all.”
Next she took a jar from which she dipped a small quantity of a white cream which again she warmed between her hands before applying it to the tops of Mr. Sharpe’s feet. The scent from the crème was hardly noticeable but reminded one of tropical flowers.
“You’re right, Niall, that the markets are not identical. But they are not as different as you appear to believe. The payers do pay after the fact, just like the businesses that pay commissions or the stores that accept things for sale on consignment. If a salesman doesn’t sell any of the product, he doesn’t get paid, just like a worker today whose efforts don’t provide any net benefit. If an artist places several of his pictures with a gallery and the pictures don’t sell, then the artist gets no money. In neither case is there a contract saying that the salesman will have a certain income just for trying to sell nor a contract that the artist will be paid for having produced paintings even though no one wants them. Do you see those parallels?”
“Sure, but so what? That still doesn’t make the payers and the producers a free market. They aren’t a market at all because there are no trades,” said Niall, ‘the rock.’
By now the woman was massaging Mr. Sharpe’s foot, pressing firmly with her thumbs on the sole and flexing and bending it in a variety of directions.
“Yet the producers get money for the work they do just like in a free market, right?”
“No. In a free market the producers are paid by their customers. In this economy they are paid by the payers. It’s not the same.”
“If you work in a large business in a POM economy, who is paying you? For that matter, who is the owner?”
“The company pays me. It doesn’t matter who the owner is. It’s probably a lot of people who own stock in the company.”
“So the payers correspond to the company, don’t they? The company pays you through its representatives in the payroll department just like the payer organization pays you through its individual representatives. The money doesn’t belong to the payers just like the guys in payroll don’t own the money they distribute. The stockholders who do collectively own the money you’re given, don’t even know what you’ve done to deserve it. So you can’t really say that you’re doing any kind of direct, person to person trade with them. Yet you are exchanging your work for their money. That sounds very much like a worker being paid by payers to me.”
“You will notice that the company was given the characteristics of a person by the law. Therefore, before the law, it is still two people trading directly with each other.” Niall felt that he was on a roll and he was becoming used to the woman’s presence at the feet of Mr. Sharpe.
“All right, let’s try another approach. In a POM free market, the participants each give up some things and get some things. In each exchange the trader can agree to the trade or reject the trade. There exists no authority to deny one the opportunity to bargain with whomever one likes. You may not get the trades you want but that would be because the other traders rejected your offers not because some outside agency prevented them. Do you agree with this description of a POM free market?”
Having finished her massaging the woman beckoned toward the doorway. Reggie reappeared still in his valet costume, with a large bowl and a fluffy white towel over his arm.
“Yes. That sounds right to me.” Niall acknowledged.
“In our economy, people also give up things and get things. When people give up things in our economy, do they get to choose what to give up? Have you seen any case of someone having their property taken by some authority? I know that there is still theft and armed robbery but have you seen anything taken by force by any agency of the society?”
Reggie commenced to wash and dry Mr. Sharpe’s feet.
“No and I must agree that I haven’t heard of any cases either. I’ve been in a couple of situations in which I was expecting property to be taken by the authorities and it was not,” Niall said magnanimously.
“Have you spent money in our economy?” the instructor asked.
“Yes, I have done so several times.”
“Were there any restrictions on what you could buy imposed by any payer or other third party?”
Niall was now on the horns of a dilemma. If he told the truth about the judge’s sentence of no more alcohol he would have to reveal that he was not actually here to become a payer. On the other hand he really didn’t want to lie to these people many of whom had become his friends.
After a brief pause for thought he decided to tell the truth. “Yes there are. I committed an assault while under the influence of alcohol. The judge gave me a choice of sentences. The one I accepted involved not drinking again while in the court’s jurisdiction. Therefore, I am restricted to non-alcoholic beverages by the court.” Niall thought he might have heard a few small gasps behind him from one or more of the other students.
“But you were given a choice of sentences and some of the choices involved your buying alcohol, right?”
“Then you chose to stop buying alcohol,” the instructor continued.
“Therefore I ask if you know of any other case in which some authority limited your choices of what to buy?”
“Not that I recall.”
“Then would you say that you are free to buy what you like with your money.”
“I guess so.”
“So in our economy, you give what you choose and buy what you choose. Is that also true in a POM free market?” the instructor asked.
“Yes and you have a lot more choices of things to buy in the POM free market. Here you can’t buy capital or necessities,” Niall pointed out.
With clean feet, Reggie drew on a fresh pair of socks and replaced the patent leather shoes which had been warmed and brought in by one of the former waiters.
“Do you have to accept capital or necessities if they’re offered to you in our economy?”
“Do you have to offer anyone capital or necessities, even if they really need them?”
Niall remembered Jean in court trying to demand that he be allowed to live in the unoccupied house. “No.”
“So those changes of possession are free as well even if they are not direct trades?”
“I suppose so,” Niall conceded.
“So whether there are actual trades in your way of thinking about it, all the transfers of goods and services from one person to another in our economy are done freely and without coercion being involved in any way?” The instructor closed in for the kill.
“Yes, I suppose they are. At least I haven’t been coerced or threatened by anyone since I got back in this country.”
“Then whatever you choose to call our way of exchanging goods and services, the exchanges are all free. Now I suggest to you that most people would be willing to call that a free market. I further suggest to you that the same forces that shape a POM free market also shape the relationships between payers and those they pay. Supply and demand rules in both cases.”
“Tomorrow we will explore that aspect. You might do some thinking about supply and demand, Niall, before our next class. I find that your objections are making these issues much clearer to the others.”
“Dismissed. Open!” to his chair which brought him into an upright position. He leaned forward onto to his feet, turned, and strode out the door with a swirl of his cape.
Behind him Niall turned to look at his classmates. No one would meet his eyes.
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