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Welcome to the Patreon community. This is Economic Update Extra, where we continue the kind of interview or analysis from the regular Economic Update program for you in recognition and in acknowledgment of the enormous support you provide to us that enables us to produce this program week in and week out. We were talking at the end of the regular program about markets and why they are not efficient and why they are a special service to the rich. And in order to drive that point home, I want to give you two examples of when we do not allow markets to work because we reject them. We Americans today, as well as people around the world, wouldn't allow a market in because we don't like how that works. One is a hypothetical example, and the other one is a real example from history. Here's the if we really believed in markets that the best way to distribute things is to give them to the highest bidder, let the market decide. Let the market determine. Then let's suppose that this year you had invited your whole extended family to Thanksgiving. There we are gathered, let's assume, I don't know, 35 people. You have a big family, and they all gathered in your home. And it's now time for the Thanksgiving turkey dinner. And you got a big turkey, and you cooked it up beautifully, full of stuffing and all the cranberry sauce that goes with it, etc. Etc. All right, you're carving the turkey. It's on the table, beautifully roasted. And here you have the first drumstick, and you raise it in your right hand, having carved it beautifully off of the turkey and being a believer in markets, you announce, I have a turkey drumstick to sell. Why are you selling it? Well, you were told it's efficient to distribute things according to a market. So now Cousin Harry says, hey, that looks delicious. I'll give you five bucks. He's getting into the spirit. Aunt Sally is not going to be outdone. She got her eye on that same Drumstick. She offers $10, Cousin Betty 15 and Papa Louie 20. You see where this is going? Eventually they're going to be cousins who say, wait a minute, why are you doing this? And the answer is, well, there's not enough turkey to go around. We didn't plan on 35. There's a scarcity of turkey relative to the number of people who've arrived for the turkey dinner. Okay? Now, you, as the proprietor of the home, the cooker of the turkey, you have a decision to make, don't you? You could distribute the turkey to the highest bidder. You could Use a market system to distribute the scarce turkey. And then some people would get it. Those whose wallets are big enough to offer enough for a piece of turkey that they get a piece. And those who don't have enough money as the price of each piece gets bid up, they won't be able to afford those high bid up prices and they'll therefore do without. It solves the problem. Scarce turkey gets distributed through the market mechanisms to those who have enough. Now, I call it a hypothetical example because I'm assuming that most of you would never agree to such a system. You would say that the whole idea of Thanksgivingappreciating the family and friends and community you're a part of would argue against it. You'd perhaps come up with the idea, why don't we divide the turkey into however many people there are here? And those of us who might have gotten more in a market system would rather have an equal distribution in the spirit that we understand Thanksgiving to exist in. You would have made a moral and ethical decision to distribute scarcity in a non market manner because the market violates your values. I want you to think about the market violates your values, because if it did in Thanksgiving, if you think about it, much the same applies everywhere else in the world. The bitterness, the envy, the anger that goes with distributing according to money terribly endangers our lives and our communities and our world. Let me give you a second example drawn from history. This one is the United States entry into World War II back in the 1940s. Here was a problem in order to fight a world war on two fronts. Against the Japanese in Asia and against the Germans and Italians in Europe. The United States knew it would have to use many of its resourcesits, railroads, its steel factories to produce armament for the war, ammunition for the war, uniforms for the soldiers to wear, et cetera, et cetera. Resources that used to be available to produce consumer goods that we all rely on wouldn't be made available to that anymore. They'd be diverted to to wartime production. That's what we did as a nation, okay? That meant that less resources were available to produce the daily consumer goods we all depend on. So the question immediately presented itself. How are we going to distribute the consumer goods that are now going to be scarce? Because the resources we used to make available to consumer goods are going for war. Very practical problem. One answer offered by conservatives, as usual, was the market solution. Just let the market do its work. Well, what that would have meant selling scarce consumer goods to the people who could best afford them. The Richest people, of course. But then the argument was brought forward by the army and the navy and the Marines. What was the. And the Air Force. They immediately said, wait a minute. Any successful war requires that the population be behind the military, be supportive of the war, understand its goals, believe in its purpose. Because it's going to cost a lot of people, including a lot of people's lives. And if you distribute scarce goods so that they end up in the hands of the rich, whereas middle and poor people won't be able to afford them, you're going to give middle income and low income people a big fat reason to be against the war because it's hurting them. You can't allow meat, sugar, milk, gasoline, coffee and many other items to be distributed by the market. You can't do it. It's too. Here we go now. Too dangerous for the solidarity of the American people, too dangerous for the cohesion of our society, too dangerous for the war. We will lose the war because we use the market at home. Very stark. What was the proposal of those who thought the market solution was, was a bad idea? Their answer was, and by the way, this became the law. Rationing, it was called. Here's how it the United States government printed up ration cards. They were called little pieces of paper that said, the United States government entitles you, the bearer of this piece of paper, to a quart of milk every week, or a pound of sugar every two weeks, or a liter of gasoline or whatever it was. And it meant that when you went to the store to get something, the price hadn't been raised. We didn't allow the market to raise prices and money would never have been enough. You couldn't buy a quart of milk just for money. You had to have a ration card. Otherwise, if the store owner sold you the milk without seeing and getting a ration card, the store owner would be violating the law and liable to arrest and prosecution by the government for violating the law. Wow. And how do you get a ration card? This may blow some of your minds. The government borrowing a saying usually attributed to Marx. It isn't true, it comes from before Marx. But here's the to each according to his need, we distributed ration cards according to need. If you had a number of children under the age of 10, you got more cards for milk than if you had no children or you only had one child. You get the picture. We distributed gasoline more into rural areas where people needed transportation to cover long distances than in urban areas where they could use mass transit. You get the Picture, we distributed scarce goods not according to the market, not according to price, not according to haggling over the price, but according to need. Because that gave you the ration card without which you could not buy. The government of the United States, with the wholehearted support of most Americans, did away with the market as a dangerous, negative, unacceptable institution to deal with scarcity. That there was a better way for the solidarity needed in war. Well, here's a thought for you. Maybe we need that solidarity in peacetime too. Maybe we wouldn't get into wars if we distributed goods more evenly, more according to need than according to how much money you've got. Maybe we'd deal with each other in a different way, respect each other in a different way, make room for one another, you in a different way. If we distributed the goods and services, maybe we wouldn't have a United States today where some people have 10 mansions and other people can't afford a one room apartment. Maybe we ought to distribute housing more according to need than according to the market. In the last 10 years, the the overwhelming majority of housing built is the highest price housing because that's where the profits are. That's what the market dictates. You may see homeless people in every American city. We certainly see them in New York City in every corner. But in a market, you don't build for the homeless the home they need. You build homes for the profit you can get. The market makes us build homes for the people who need them least and not build them for the people who need them the most. The logic that made us reject markets as a nation in World War II is the same logic that ought to make you very, very skeptical every time you hear someone say let the market decide. Because that's just an indirect way of, of saying give it to the richest people amongst us and everybody else. You lose. Thank you again for joining us not only for Economic Update but for Economic Update Extra. I hope these extended conversations and analyses are useful to you that you can partner with us in making what we do on these programs known to other people. That's our project. That's our program. Become a partner with us, share it, extend it. That will be the best way for us and you to work together. And one more time, because it can't be said, thank all of you in the Patreon community for the support you provide us. And it is a lifeline that enables us to do this kind of work. And I look forward to speaking with you again next week.