Suppose we live under a system such as you described. How would this system handle the following:1) A talented musician comes to town. The theater has 100 seats. 200 people want to go. How should this scarce good be allocate?
2) We need somebody to weld steel beams on a high suspension bridge. This job requires great skill and is very hazardous. Taking this job pays the same wages as a soft job in a public library. Who will take the job?
3) A skilled sculptor has a yearning for Beethoven concertos. He lives next door to an experienced violinist. He trades one of his beautiful sculptures for a month of free dinner music. Would you arrest him? If not, hasn't he increased his "wages" by getting a good (music) that nobody else can have?
I believe that the price system is a fairly good measure for the value of labor and goods. In America, of course, there are flaws (some people get paid far too much, some far too little). But the price mechanism on the whole is fairly efficient.
- nat
