Wealth and Production Systems

It's my own design
It's my own remorse
Help me to decide
--Tears for Fears

There is only one way to elevate general standard of living: more production of things people want. Production alleviates scarcity and allows people to better pursue their interests.

The greater the production, the greater the wealth. The greater the wealth, the higher the general standard of living.

There are two general approaches to production. One way is for individuals to decide what they will produce, and then voluntarily trade production with each other. To the extent that people specialize (i.e., produce a narrow range of outputs) in their production, then trading helps them acquire from others the diversity of goods that helps advance their interests.

Producers are pressured from two sides. Producers who do not make what people want are penalized by buyers through lower prices and reduced patronage. Competition also pressures producers to become ever more innovative and efficient in what they produce for the market.

This approach focuses production on wealth-building and keeps it focused as times change.

The other approach to production is by fiat. Central authority decides what gets produced and how it is distributed. Individual decisions are not part of the picture. Production decisions are made by force. Distribution is no longer accomplished through voluntary exchange. People are told what they will have.

No price signals come from the market to persuade producers to make more or less. There is no competition among producers to drive innovation and efficiency.

Clearly, this approach is not focused on wealth building and remains static in dynamic times.

Why, then, do we constantly seek to funnel production through this second approach?