It does not prevent market
failures. In other words: money is not an index.
It is merely a medium of exchange and a store of value. The index - as
expressed in terms of money - is the underlying agreement regarding the
values of resources in terms of other resources (i.e., their relative
values).
The market - and the price mechanism - increase happiness and welfare
by allowing people to alter the composition of their bundles. The
invisible hand is just and benevolent. But money is imperfect. The
aforementioned Rawles demonstrated (1971), that we need to combine
money with other measures in order to place a value on intangibles.
The prevailing market theories postulate that everyone has the same
resources at some initial point (the "starting gate"). It is up to them
to deploy these endowments and, thus, to ravage or increase their
wealth. While the initial distribution is equal - the end distribution
depends on how wisely - or imprudently - the initial distribution was
used.
Egalitarian thinkers proposed to equate everyone's income in each time
frame (e.g., annually). But identical incomes do not automatically
yield the same accrued wealth. The latter depends on how the income is
used - saved, invested, or squandered.
Pages:
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132