|I couldn't find the other thread so I'm posting the continued discussion here:|
[Dear valued consumer of knowledge],Ed
"... absent of Government (influence or regulation etc...), can Economic power suppress the production of valuable things?"
Yes, sort of. While economic power is the power to produce things, some of the things produced can indirectly suppress the production of other things -- but without lowering the sum total of produced things. Austrian economists contend that a "spontaneous" order and progress occurs, similar to Adam Smith's "invisible hand" analogy in his book: Wealth of Nations. Money "finds" its way to the most useful investment.
The reason that money does this, is that money tied up in non-useful investment deteriorates. Capital flows toward production of what the sum total of what it is that the public values. This is called the "Marginal Theory of Value." A wrench can be thrown into this beautiful engine when government messes with the economy in any way. Controls, originally thought to be an improvement over naked market forces, lead to further controls. Examples of this abound.
Not a penny of the TARP money went to designated TARP areas. Did you know that? If Congress votes on earmarking money for something, and the money doesn't end up going to where it was designated, then corruption looms (and we need more and more controls; controllers controlling the controllers). Instead of spending it where it was voted to be spent, most of it was unilaterally used in order to bail-out GM. Did you know that? Did you know that there was a congressional vote on whether to bail out GM and it failed?
Instead of relying on congress to decide where to spend the money that it voted to spend, treasury secretary Paulson unilaterally took the money for his own non-congressionally-approved agenda. It's not necessary rule by the wealthy (plutocracy) as it is rule by the politically powerful. The problem is us having a government that can vote itself public money, and spend it without accountability. Notice that Paulson did this under the current administration of that great new president -- who said that he morally change washington politics (as long as we give him a bunch of centralized, government power).