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What if it could be demonstrated that not only can the market produce unequal results but that it is inevitable that a free market economy should do so?

Many worship the market as the best' method of distributing resources, usually adding that any interference must' upset the balance and produce the horrors of inefficiency'. And philosophers such as Hayek and Mises are often quoted by the faithful of the Church of the Free Market as evidence that the God of the market can do no wrong. Underlying their work is the assumption that the world produced by free markets is, or would be, the best of all possible worlds'.

Any market begins with having products that are excess to their basic needs. That is, products about which there is a choice to produce or not. One choice is to produce more essentials until living standards of all are raised to a satisfactory level or to use the surplus to produce non-essentials for a minority. Historically, and it would seem inevitably, the choice goes to the latter. Why is this so?

At the time that a surplus to essentials is attained by some, the production of these essentials begins to level off and more and more resources are used to make non-essentials. This is inevitable in an exchange economy with an unequal distribution of income. Those with a greater command over resources can outbid those still struggling to get the essentials. This of course makes it seem that resources are scarce and is an imperative to the creation of poverty that lies at the heart of any free market economy.

The devotion of the economic surplus to more than a minimum level of essentials under conditions of unequal command over resources and free exchange is economically (not merely politically) impossible. Just why this is so can be shown by imagining the consequences of doing so: A plentiful supply of essentials would raise the standard of living while it lowered the exchange value of these essentials. More social resources would be devoted to essential production and consequentially less to non-essential production. At the same time any return for producing essentials would fall while that for non-essentials increased.

It can be seen that what can be called the Poverty Imperative' of the free market, exists under the not unusual conditions of inequality of command over resources. An inequality it helps to create and extend. Those with a greater command over resources (income) will willingly pay the higher price for non-essentials. (This is simple supply

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