In Star Trek: First Contact, Captain Picard explains to a 21st-century visitor, The economics of the future is somewhat different. You see, money doesnt exist in the 24th century.

Yusaku Maezawa, a multibillionaire who recently traveled to space, could double for just such a visitor. He recently echoed Picards idea in a press conference he gave from the International Space Station, saying,

Someday, money will disappear suddenly from this world. . . . my bank account will be zero. Everyones bank account will be zero. And everything in stores [will be] free. So, everyone can take everything for free from stores. If you love cars, you can ride a Ferrari as soon as you wantfor free.

The fashion tycoon added that capitalism is not sustainable and should be replaced with a money-free society as soon as possible, a view he promises to explain in a film he plans to make (which no doubt will cost a small fortune to produce). Is this a truly futuristic ideaone we should strive for? Or is it actually rather primitive and unworkable?

Capitalism, to the extent it has existed, has been incredibly successful at lifting most of humanity out of poverty, incentivizing the creation of incredible, life-enhancing technologies, such as those Maezawa used to make his fortunenot to mention, travel to space. But its long had its critics, and he is far from the first to propose a sort of Garden-of-Eden world where everything is plentiful and free. Karl Marx envisioned a similar utopia. Communism, he said, ultimately would bring about a world without money:

In the case of socialised production the money-capital is eliminated. Society distributes labour-power and means of production to the different branches of production. The producers may, for all it matters, receive paper vouchers entitling them to withdraw from the social supplies of consumer goods a quantity corresponding to their labour-time. These vouchers are not money. They do not circulate.

And although society distributes labour-powermeaning government planners tell people what to do to ensure that things (such as free Ferraris) get madeworkers could also all pursue whatever hobbies or occupations strike their fancy. [I]n communist society, Marx explained,

where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, to fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have in mind, without ever becoming hunter, fisherman, shepherd or critic.

Because, in such a world, society regulates the general production, only social planners would need to worry about how all of this somehow adds up to meet everyones needs. The worker need not concern himself with producing in-demand goods that he can trade for others. As a modern utopian and self-described social engineer, Jacque Fresco, explains:

all goods and services are available to all people without the need for means of exchange such as money, credits, barter or any other means. For this to be achieved, all resources must be declared as the common heritage of all Earths inhabitants. Equipped with the latest scientific and technological marvels, humankind could reach extremely high productivity levels and create an abundance of resources.

In other words, a handful of technocrats would somehow make possible a couch potatos paradise. Thats not an idea that resonates with me or with the ambitious young people I know. On the other hand, burned-out Chinese workerswho recently launched the lying flat movement to popularize opting out of Xi Jinpings continual struggle toward tech dominancelikely would welcome the respite. Ironically, though, the Chinese Communist Party views this widespread acknowledgment of fatigue as subversive childishness, evidencing the individuals supposedly immoral desire to put his own selfish interests above those of the nation.

Under communism, a handful of technocrats would somehow make possible a couch potatos paradise. Thats not an idea that resonates with me or with the ambitious young people I know.

But, if not in the heart of communism, might Marxs Eden be workable elsewhere?

Although Marx considered himself a social scientist and economistand although his ideas are still some of the most widely taughtthey arent much taught in social science or economics departments, except as foils. Thats because virtually all of Marxs hypotheses have been debunked. For one, whos going to build the free Ferraris that Maezawa has dreamed up, never mind tackle more mundane tasks, with no incentive? But for those who dont find such commonsense thought experiments convincingor who think, as Marx did, that human nature will somehow mysteriously changethe impracticality of Marxs moneyless state was demonstrated by what Austrian economists have come to call the calculation problem. Ludwig von Mises once explained the problem as follows:

If a hydroelectric power station is to be built, one must know whether or not this is the most economical way to produce the energy needed. How can he know this if he cannot calculate costs and output?

We may admit that in its initial period a socialist regime could to some extent rely upon the experience of the preceding age of capitalism. But what is to be done later, as conditions change more and more? Of what use could the prices of 1900 be for the director in 1949? And what use can the director in 1980 derive from the knowledge of the prices of 1949?

The paradox of planning is that it cannot plan, because of the absence of economic calculation. What is called a planned economy is no economy at all. It is just a system of groping about in the dark.

In short, without prices, people have no relatable, quantifiable means of comparing and contrasting options about how to spend time and capital, which is vital for determining how best to use these naturally scarce resources. New Scientist magazine reported that in the future, cars could be powered by hazelnuts, said comedian Jimmy Fallon, in a skit that captures this point hilariously. Thats encouraging, considering an eight-ounce jar of hazelnuts costs about nine dollars. Yeah, Ive got an idea for a car that runs on bald eagle heads and Faberg eggs.

The paradox of planning is that it cannot plan, because of the absence of economic calculation. What is called a planned economy is no economy at all. It is just a system of groping about in the dark. Ludwig von Mises

But theres more. As has been shown with so many of Marxs ideas, a moneyless society is not only impractical, its also deeply immoral. Marx often grumbled about greedy capitalists alienating workers from their labor. The focus on efficiency, he said, reduced the worker to a mere extension of a factorys machines, rendering him a brute tool of capitalist exploitation.

Of course, workers chose industrial jobs because they paid better than those in agriculture and the like. And even if boring, such jobs rarely were so backbreaking as life on the farm. Far from alienating workers from their labor, the capitalist arranged new modes of production that vastly increased the value of that labor, not only for himself, but for workers, too. Whereas a slave truly is alienated from his laborhe works but is deprived of the fruits of his effortthe industrial worker could count on greater returns from his labor than ever before. Over the course of the Industrial Revolution and the following centuries, those returns have grown immensely and reduced the percentage of people living in extreme poverty from more than 80 percent to less than 20.

Money stores the value of ones effort. Its made possible by the legal protection of property rights. In the words of Francisco dAnconia from Ayn Rands Atlas Shrugged:

Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders.

Just as the worker owns himself, he owns the values he produces, on which his life depends, either directly or indirectly via the sale of those values. Without money and the property rights that underlie it, we all would be truly and fully alienated from our labor, left without enforceable claim to the values we spend our timeand thus our livescreating.

"Money rests on the axiom that every man is the owner of his mind and his effort." Ayn Rand

Thats an idea hardly fit even for science fiction, one best relegated to the dystopian genre.

This piece is republished with permission from The Objective Standard.

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Is Star Trek's Dream of a World Without Money Utopian or Dystopian? | Jon Hersey, Thomas Walker-Werth - Foundation for Economic Education