Welcome to world or politics, economics, metaphysics, psychology, esthetics all rolled into one.
I commend you for taking a bite into a very juicy subject. I hope to communicate to you, though, that you've just taken your first tenuous bite, and I sincerely hope that you will take many more.
First, a study in metaphysics. Humans have needs. Humans can make decisions and act upon decisions to fulfill those needs however they see fit. Humans are complex both in their needs and in their ability to fulfill them. Humans have the capability of communicating with other humans; they often communicate for a variety of need-fulfilling tasks.
Now for government. Humans have known for a long time that forming groups of humans aids in need-fulfilling ventures, such as feeding your family, punishing non-collabaritive bullies, and defending your group against a much bigger foe. Eventually, as individuals grew more and more autonomous (in response to a need to feel autonomous), the marketplace more and more displaced government in humans search for need-fulfilling ventures such as feeding your family. But the roles of justice and group-defense continued to be held only by the government.
Now a study in economics. Humans have discovered a wonderful abstraction -- the concept of value -- which facilitates humans' communication in their need-fulfilling activities. Humans also discovered they can concretize this concept of value in a civil and peaceful way: money. Money is much preferred to, say, expressing your value by hitting someone over the head with a club. When humans engage in the exchange of money -- and therefore value -- it is called a "market". When they are freely allowed to do so, it is called a "free market".
Humans then discovered they can do interesting things with money in a free market: they can borrow it, lend it, keep it in excess of current need deficits, aggregate it, invest it. Aggregating and investing together is what humans do to form corporations. These corportations allow individual humans to leverage their hard-earned money in conjunction with other like humans.
A few things about a free market. Since value is subjective, all participants in an exchange of value will receive more than they gave. If I'm hungry enough, my five sheckles will be worth less at the time than your freshly caught fish. My 20 pounds of gold are useless in a desert unless I can use them to buy some water. And don't even try to sell an ice cube to an Eskimo.
Marginal Utility is possible because some people are just better at some things than others. I can plow better than you, but you're better at cooking, so you stay and cook while I plow. My friend Kim is a PhD so she's more qualified to do research while I'm an experienced programmer; who do you pay more to write a program?
Utility is multi-faceted and so we have "convenience stores" and "supermarkets" at every corner. It's why we have "fast food" joints, which close at 11pm, adjacent to all-night diners. Temporal and spatial utility are just two of the kinds of utilities that a service or product can offer as a competitive advantage. And be a cause in a higher price.
Economies of scale mean that often bigger is better. It's simply more efficient, meaning less waste, to make 10,000 widgets than to make just 1. Or 5,000.
Supply and demand of course means that wise money-spenders realize that all utilities being equal, the easier a product is to get or manufacture or supply, the lower its cost can be. And suppliers know that the more demand they can create for a product, the higher a price those people are willing to pay.
Except for a few periods in history, governments were more concerned with fulfilling human needs of safety and food than with creating an environment where individuality and autonomy can thrive. The few periods in which these have thrived have often had elements of direct or indirect popular representation, a concept today often mistaken for "democracy". Please note that "democracy" and the free market are not intrisically linked, though they may be psychologically and historically intertwined. Many historians and philosophers have noted that a free market is more cruicial to an individual's autonomy and free expression than the particular form of government.
In the field of modern pyschology, we study human behavior. Usually, we ascribe such behavior to cognitive activities and "states of mind", but of course, physiological responses are just as important. By studying psychology, we gain insights into how humans act. And by studying how humans act, we gain insights into what humans need. What about wants? It's difficult both psychologically and philosophically to make a distinction between wants and needs. Both needs and wants can always be expressed in the context of another need or want. With the exception of existence itself.
The concept of esthetics creeps in soon after an individual can rest from asking the quesiton "What do I need to live another day", and may begins to ask "How can I fulfill my need for beauty." I'm talking Sex. Art. Programming. Poetry. Math. Science. Knowledge. Joy.
So my feedback to you begins by noting there is a contradiction in your desire for a well-educated society and a well-taxed society. Who will pay to feed my thirst for water or for my thirst for knowledge? "The government?" "Our society?" What good will that knowledge do me, when I am told that 40% or 80% or whatever % of my free time is to be spent feeding someone else?
Consumerism is Natural and Good. Consumerism means that we humans are fully engaged in the act of need-fulfilling activities, and that we are getting really really good at it. We consume by purchasing CD systems and buying CD's; we consume by buying homes and remodeling them to feel at peace; we consume by buying cars that we hope will impress members of the opposite gender and increase our likelihood of gene proliferation; we consume by buying more expensive, but healthier, less fatty foods than by buying cheap, and fattening foods. We should be praising consumerism, not disparaging it.
Nothing sacred about my wealth. If my ancestors were able to self-organize from poor, uneducated, farmers, why can't the multitiude of "poor, uneducated, starving" self-organize? If wealth is merely a benefit of the already wealthy, where did this wealth come from? The poor? The wealthy? Which is it? Money isn't a zero-sum game, just as the three laws of thermodynamics do not apply to the earth. The sun's energy heats up the planet, allows us to be fed with a relative minimum of effort. Thus, I can make a profit -- at no one's expense -- by selling my excess produce.
You don't know and cannot appreciates every person's true needs and desires. I have been told women are really fascinated by shoes. They buy them, they collect them, they talk about them, they chose to date guys based on them, etc. I'm not with the women on that. In fact, I think it's quite frivolous to worry excessively about shoes. In fact, I am certain no one needs more than exactly one pair of shoes. Wouldn't you agree?
- No one needs to drive more than 5 miles to work.
- No one needs to have their hair cut. Not really.
- No one needs a computer.
- No one needs a human species.
We all need the human species of course, for otherwise, none of us would be around. But are considerations of the species in the year 2100 more important than considerations of the individual in the year 2000? What about in the species in the year 3000? Or the year 10000?
In close, I cannot stress enough the vital role a free market has on our personal lives. It's not just a thing to be tolerated, but a thing to be worshipped. A truly free market exists for the free exchange of values. What else could be more valuable?