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& demand as those fond of quoting Messrs Hayek and Mises would be the first to agree). Those who produce or control the production of essentials, if free to do so, will switch to non-essential production. The supply of essentials will fall and their price rise until a balance of supply and demand, but not equality, is achieved.

It is for this reason that Supply & Demand theory, which seems so rational on paper and is so comfortable for well paid economists, has no meaning in reality. All supply affects all demand and individual products and resources cannot be treated separately as there is a point at which it becomes more worthwhile to devote production to non-essentials rather than to essentials regardless of continuing need on a, dare it be said, human level. This point is determined by productivity and by the degree of income inequality within the economy, certainly not by moral or social considerations.

What the operation of the Poverty Imperative means is that essential production is kept by a market to a minimum while resources are increasingly devoted to non-essential production. At the same time it means that in order to get the essentials they need, those with a lesser share of total resources must devote their energies to producing non-essentials for those who already have a greater share, thus restricting the growth of essential products even further and conveniently keeping a hard working class in existence.

The Poverty Imperative is both a cause and a result of unequal relations, both political and economic. But its function is not to establish or maintain certain class or social relations; this is its incidental result. Rather it is to prevent economic stagnation made inevitable by production that is surplus to essential needs. Such stagnation is inevitable if surplus production is not consumed and consumed continuously, hence the value of producing what is of least value.

Thus the existence of the Poverty Imperative means that a free market cannot bring about conditions of equality or even reduce poverty significantly. It is up to us human beings rather than the God of the market and its many worshippers to decide if the market produces what we would be satisfied to call the best of all possible worlds.

Learn more about this author, Peabody Snickersbee.
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