Dr. Barry Creamer recently wrote a post The Meaning of Money. I don’t have anything to contribute to his content, but would like to restate it in my own words.
When I was young, my parents took me to Chuck E. Cheese’s. In hindsight, the whole thing was pretty weird. Basically, it’s a kid’s funhouse with huge pits of balls, tubes to climb through, overweight, sweaty kids, lots of pizza and a performance stage full of robotic gorillas and monsters that played keyboards and electric guitars. The icing on the cake was that the whole venue centered around a giant rat “Chuck E.”
Now, every kid knows that when you go to Chuck E. Cheese’s, there are a few preliminary things that have to happen: lose the shoes, play in the balls, eat pizza, try to look behind the curtains while the anatomic performers take a break, and so on. However, every kid also knows that the main reason to go to Chuck E. Cheese’s is to win prizes. Essentially, mom and dad get killed in the Chuck E. Exchange Rate and buy the kiddos two pockets full of Chuck E. Cheese coins. The kid in turn spends all of the Chuck E. Cheese Money (specially encrusted with the rat’s very own face) on various games. The better you do on a game the more tickets you get. So, the more skilled you are at the ball shoot, or the more concentration you put into the hitting-the monsters-on-the-head-with-a-mallet game, the more tickets you are rewarded. This is important, because the more tickets you get, the more things you can exchange the tickets for in the end (plastic rings, fake spiders, etc.). So, the tickets are only worth as much as what you can exchange them for. If, when I was done playing all of the games and collecting all of my tickets I found out that Chuck E. Cheese was completely out of prizes, the tickets I had earned would be useless to me.
Let’s say that Chuck E. Cheese’s isn’t out of prizes, but at the end of my run my mom required that I give half of my tickets to Tommy since she felt bad that he had less tickets than me. After all, fair is fair, right? “No!” I protest. In a moment of child genius I argue that Tommy had coins too, but chose to use them on non-ticket giving machines and thus, it isn’t right to force me to share my tickets with stupid, fat Tommy. But, my mother insists and half of my profit is lost to Tommy (who will never be invited back).
Now the comparison: Chuck E. Cheese is like a free market. We can do whatever we want. Some can sit around in the balls, some can be entertained by the robotic performers, some can eat their life away in pizza, and some can work hard on the games, perfecting their skill to earn the maximum number of tickets. The tickets, like our money, have no intrinsic value or practical worth. The tickets and the money simply represent or signify the amount of work that has been put into the system so that the economy can know how much to pay the individual worker back (with goods and services). In this analogy, my mom is like socialism. I, as a game player, have put work into the system and am owed prizes as a result -the Chuck E. Cheese economy is in my debt. Socialism, the mandatory redistribution of goods (money), not only takes from he who has more, but penalizes him who is owed the most! Not only is this bizarre, but it is immoral. Essentially, it is the economy borrowing from someone and, before paying him back, punishing him for borrowing too much.