jmherbenerIt is true that the pattern of prices, production, and income on an unhampered market would be entirely different than the pattern of prices, production, and income on a market economy hampered by a central banking that issues fiat money.
But it doesn’t follow from that conjectural claim that the pattern of prices, production, and income on a market economy hampered by a central bank issuing fiat money bears no relationship to people’s preferences.
By exercising its legal monopoly of printing fiat money, the state unjustly transfers resources from producers in the economy to itself. State officials and those who produce goods for the state, then, earn income unrelated to the satisfaction of people’s preferences in society. But this effect cannot extend to every producer in the economy unless the state adopts central planning. So in a hampered market economy their are lines of production support by the coercive power of the state and other lines of production not so supported. In the latter lines, the producers do earn incomes from the value of their productive services in satisfying the preferences of others and entrepreneurs do earn profit from their superior foresight in satisfying the preference of others. Consumer electronics would be an example of such a line of production.
The coercive taint on fiat money is not a character trait of the money as a medium of exchange it is in the use of the money by the state to unjustly transfer resources from producers to itself. And this effect is limited unless the state takes over all production.