Author: Fred Foldvary

Libertarian Countries and Libertarian Societies

Fred Foldvary Current Events, Liberty , , , , , , , ,

by Fred Foldvary

Michael Lind in the 4 June 2012 salon.com in his article “The question libertarians just can’t answer,” asked, “Why are there no libertarian countries?”  One answer is simply that there are very few pure libertarians. But another answer is that most folks are libertarian enough that they establish libertarian societies, by which I mean not just organized clubs but also informal social gatherings and happenings.

The essential libertarian proposition is “live and let live.”  In a libertarian society, there are no restrictions on peaceful and honest human action.  Most people believe that it is morally wrong to coercively harm others, and they have been brought up to have some sympathy for others, so that they don’t want to hurt others.  Therefore most gatherings such as concerts, athletic events, and street traffic is peaceful. Thus much of the world operates in a libertarian way, without governmental direction. If you host a party in your house, you seldom need a government official there to keep the peace.

This social libertarianism has limits, as those who do not conform to cultural standards such as dress codes would encounter some intolerance.  Nevertheless, there is an almost universal agreement that assault and theft are evil, and a widespread aversion to such anti-social behavior.  When most folks are pro-social in their behavior, they demonstrate a wide and deep level of libertarianism.

Why does the US government impose restrictions such as prohibiting trade with Cuba?  Most Americans probably favor free trade with Cuba. But a minority special interest opposes trade with Cuba and has the political clout to stop it. So the basic reason why the US does not have full freedom is the inherent dysfunction of our system of selecting the chiefs of state. That system is mass democracy.  The failures of mass democracy have been documented and analyzed by the branch of economics called “public choice.”

The two basic reasons why there are no libertarian countries are:

1. Very few people understand or even know about the ethics, economics, and governance of pure liberty.  Pure freedom is not taught in schools, and it is not in the predominant culture.

2. Mass democracy enables special interests to skew policy that favors a few at the expense of the many.

However, the general concept of “freedom” and “liberty” is universally admired.  People have a genetic dislike of being controlled. But their moral views have been skewed by thinking their religious and cultural views are universal.  Ignorance is therefore the ultimate reason why libertarianism is not more widespread.

In another essay on 13 June 2013 Lind says, “Grow up, Libertarians!”  It shows that Lind does not know the meaning of the word “freedom.”  He writes that fighting evil requires limiting the “freedom of employers to buy and sell slaves.”  He has a physical definition of “freedom,” rather than the ethical meaning of there being no restrictions other than on coercive harm to others.  The ownership of a slave is not ethical freedom.

He then says that libertarians propose “the replacement of all taxes by a single regressive flat tax that would fall on low-income workers.” Anyone who advocates such as tax is not a pure libertarian. Lind confuses libertarianism with conservativism.

Michael Lind concludes with the statement, “libertarianism as a philosophy is superficial, juvenile nonsense.” Wow – perhaps he has never read freedom philosophers such as John Locke, John Stuart Mill, Herbert Spencer, and John Hospers. We need a serious explanation of why the basic libertarian idea – live and let live – is superficial nonsense.

There seems to be a simple explanation for Lind’s views on libertarianism – he simply does not understand it.

Markets Strengthen Moral Values

Fred Foldvary Current Events, Economics , , , , , , ,

[Cross-posted at the Progress Report]

Pure markets enhance people’s moral values. In a pure market economy, all activity is voluntary for everyone, and involuntary acts, those which coercively harm others, are outside the market as an invasion of rights. A pure market includes the governance that enforces natural moral law, thereby promoting acts that are good or neutral, while minimizing evil acts.

Critics of markets have claimed that when people search for the cheapest goods, this reduces moral concerns. But in a pure market, the products offered are produced by moral means, i.e. by a process that does not involve coercive harm. Therefore searching for the lowest-cost goods is not evil. Only when goods are produced by immoral means, such as with slave labor, is the product morally bad, but that could not occur within a pure market.

Unfortunately, some economists who conduct research on human behavior leap to incorrect conclusions because while they have been trained in experimental techniques and mathematics, their graduate-school training did not include market ethics. For example, Prof. Dr. Armin Falk at the University of Bonn and Prof. Dr. Nora Szech at the University of Bamberg conducted experiments in which persons were offered a choice between receiving ten euros versus letting a laboratory mouse get killed. If a subject decided to save a mouse, the experimenters bought the animal (“Morals and Markets”), allowing it to live a decent life. Continue reading →

See the Cat: The Heart of Economics in One Story

Fred Foldvary Economics , , , ,

A man was walking down a shopping street and came to a store window where there was a big drawing full of lines and squiggles. A sign by the drawing asked, “Can you see the picture?”

All the man could see was a chaos of lines going every which way. He stared at it and tried to make out some kind of design, but it was all a jumble. Then he saw that some of the lines formed ears, and whiskers, and a tail. Suddenly he realized that there was a cat in the picture. Once he saw the cat, it was unmistakable. When he looked away and then looked back at the drawing, the cat was quite evident now.

The man then realized that the economy is like the cat. It seems to be a jumble of workers, consumers, enterprises, taxes, regulations, imports and exports, profits and losses – a chaos of all kinds of activities. Here are fine houses and shops full of goods, but yonder is poverty and slums. It doesn’t make any sense unless we understand the basic principles of economics. Once we have this understanding, the economy becomes clear – we see the cat instead of a jumble. We then know the cause of poverty and its remedy. But since most folks don’t see the cat, social policy just treats the symptoms without applying the remedies that would eliminate the problem.

What is this economics cat? It starts with the three factors or resource inputs of production: land, labor, and capital goods. Land includes all natural resources and opportunities. Labor is all human exertion in the production of wealth. Capital goods are tools (such as machines and buildings) used to produce wealth. The owners of land get rent, workers get wages, and the owners of capital goods get a capital return.

Picture an unpopulated island where we’re going to produce one good, corn, and there are eleven grades of land. Continue reading →

Economic Rationality

Fred Foldvary Economics, Liberty , , , , , , ,

[Cross-posted at the Foldvarium]

The concept of rational action is a frontier of economic theory. The new field of behavioral economics combines economics and psychology to analyze actions that seem to be irrational. For example, people value health and long life, yet they smoke and eat unhealthy food. A related field, behavioral finance, examines psychological and emotional traits that prevent people from making wise investments. Perverse psychological biases include anchoring to past prices and facts, the bias of weighing recent events too highly relative to the more distant past, being overly confident in one’s abilities, and following the herd to a cliff.

Neoclassical economics often assumes that people are purely self-interested and always seek financial gain, and that therefore altruism is irrational, whereas as Adam Smith and Henry George wrote, human beings have two motivations: self interest and sympathy for others. Since people get satisfaction from serving others, it is incorrect to label altruism or actions based on subjective views of justice as “irrational.”

The Austrian school of economic thought has a different perspective on rationality. The Austrian economist Ludwig von Mises envisioned human action as inherently rational. A person has unlimited desires and scarce resources. Human beings economize, seeking maximum benefits for a given cost, or minimizing costs for a given benefit. At any moment in time, a person ranks his goals, ranging from most to least important. He chooses the resources to achieve the most important goal at some moment, then the second most, and so on, until his gains from trade have become exhausted. This is the inherent rationality of human action. Continue reading →

Moral Markets and Immoral “Capitalism”

Fred Foldvary Current Events, Economics , , , , , , , , ,

The question, “Is capitalism moral?” was raised by Steven Pearlstein in a 15 March 2013 article in the Washington Post. He is a professor of public and international affairs at George Mason University and a column writer for the Washington Post.

Pearlstein writes that we in the US are engaged in a “historic debate over free-market capitalism.” Maybe so, but “free-market capitalism” is a contradiction in terms. There are two reasons why the economic system is called “capital”ism rather than “laborism” or “landism.” First is that capital dominates labor. The second reason to call the system “capitalism” is to hide the role of land, so that people focus only on the conflict between workers and capitalists. The chiefs of finance and real estate are able to dominate because of their political clout. They obtain privileges from government in subsidies, limits on competition, and periodic bail outs. In contrast, in a free market, there is no domination, with neither subsidies nor imposed costs.

Pearlstein then says that if “markets” were providing prosperity for most folks, there would be no need for governmental intervention. But we don’t have pure markets. We have a mixed economy, with intervention into markets, so one has to first analyze whether it is markets or else interventions that cause high inequality, instability, poverty, and unemployment. Since pure markets are not given an opportunity to work, how can they be responsible for economic woes?

He then asserts that for the past 30 years, the world has been moving towards a greater role for markets. That is so for China and the countries previously dominated by the USSR, and these economies have indeed experienced greater growth and prosperity.

But, contrary to Pearlstein’s assertion, the US has been moving away from a market economy. Frequent governmental crises – the fiscal cliff, budget deadlines, ever changing tax rates – threaten the stability of financial, industrial, and labor markets. The subsidies to real estate and its financial allies have never been greater. The domination of the Federal Reserve over money, banking, and interest rates has reached historic heights. The tax reforms of the 1980s have been reversed by Congress, which has made income taxes ever more complex. Costly regulations continue to pour out of Washington DC by the thousands each year. And now the government will dominate medical provision like never before.

The decline in the role of markets can be measured by an index of economic freedom. According to the Fraser Index of Economic Freedom, U.S. market freedom peaked out in the year 2000 at a rating of 8.5 out of 10, and then declined to 7.69 in 2010 as intervention grew. The US freedom ranking among countries dropped from third place in 2000 to 18th out of 144 in 2010, and most probably has continued sinking since then.

Critics of markets have asserted that stagnant household incomes and financial crises are the fault of a greater role for markets, when in fact, in the US and Europe, massive subsidies to real estate caused the recession, excessive government borrowing has caused the fiscal crises, and a governmental redistribution of wealth from workers to landowners has stagnated net wages.

I agree with Pearlstein that we should welcome the debate on economic morality. But we should use words that have real economic meaning, rather than propaganda terms. Any person who refers to “capitalism” other than with critical quotation marks contributes to the confusion. The critics of markets opportunistically use the term “free market” to refer to the mixed economy, and then use the term “capitalism” also for the concept of a pure free market. Hence they argue that “capitalism,” as the mixed economy, suffers from economic woes, and then jump to the false conclusion that “capitalism,” meaning the pure market, causes the problems.

A real debate should also unmask the role of land that hides under the label “capital”ism. Critics who speak of the “market’s” unequal distributions overlook the massive redistribution of income from workers to landowners, as taxes on wages pay for public goods that pump up rent and land values. Their call for higher taxes on the rich disregards the distinction between earned income from entrepreneurship and unearned income from governmental subsidies.

Pearlstein admits that “many of the arguments have been a bit flabby, with both sides taking refuge in easy moralizing.” That is true. An honest and robust debate should avoid the deceitful switching of meanings for “capitalism”, and indeed avoids using the flabby term altogether. Instead, use the clear and honest words “pure market,” “intervention,” and “mixed economy.” If we say that the mixed economy has economic woes, one cannot then conclude that the pure market has caused them, because the mix also includes intervention. Clear thinking about economic morality cannot begin until we have clear terms that reflect the full-spectrum of economic reality.

Free Banking Beats Central Banking

Fred Foldvary Economics , , , , , , , , , , , ,

In “More Bits on Whether We Need a Fed,” a November 21 MarginalRevolution blogpost, George Mason University economics professor Tyler Cowen questions “why free banking would offer an advantage over post WWII central banking (combined with FDIC and paper money).”  He adds, “That’s long been the weak spot of the anti-Fed case.”

Free banking is better than central banking because only in a free market can the optimal prices and quantities of goods be determined.  Those goods include the money supply, and prices include the rate of interest.

There is no scientific way to know in advance the right price of goods.  With ever-changing population, technology, and preferences, markets are turbulent, and there is no way to accurately predict fluctuating human desires and costs.

The quantity of money in the economy is no different from other goods.  The optimal amount can only be discovered by the dynamics of supply and demand in a market.  The impact of money on prices depends not just on the amount of money, but also on its velocity, that is, how fast the money turns over. The Fed cannot control the velocity since it cannot control the demand for money, that is, the amount people want to hold. Also, even if the Fed could determine the best amount of money for today, the impact on the economy takes several months to take effect, and so the central bankers would need to be able to accurately predict the state of the economy months into the future. Continue reading →

A Free Market in Medical Services

Fred Foldvary Economics, Law, Politics , , , , , , , , , , ,

There are two directions for the reform of the U.S. medical services systems. One is towards welfare statism, the control of the medical system by the federal government, and the other is towards economic freedom, providing individuals and families a free choice in medical care.

Economic theory points to a pure free market providing the most productive and equitable economy and therefore medical services. Central planners lack the knowledge to efficiently allocate resources, and politics skews the outcome towards special interests.

Here are the reforms need to have a really free market in medical services: Continue reading →

How to Extirpate Poverty

Fred Foldvary Economics, Liberty , ,

To “extirpate” means to complete eliminate, from the Latin word meaning to pull out by stem and root. To extirpate poverty means to eliminate its cause, so that it does not come back. Fundamentally, poverty comes from a low wage level, so we need to examine what makes a wage level low.

The wage level of an economy can be thought of as the wages paid to unskilled people. Those with greater skill and talent get higher wages, so some think that the solution to poverty is better education. But a stagnant economy also depresses the return to human capital, the extra wage for those who are more productive. In a thriving productive economy, even those with few skills are better off than skilled labor in a depressed economy. Indeed, in an unproductive economy, those with skills often find little market for their human capital.

The wage level of an economy is set by marginal labor, those who work at the least productive land in use. The classical “law of wages” says that when workers are mobile, the wage at the margin of production will set the wage level for the rest of the economy.

The margin of production has several edges. There is the horizontal extensive margin of land that is just barely worth using, land so unproductive it fetches no rent. There is the vertical extensive margin of the space above a city, into which taller buildings can rise, without increasing the site rent. There is also the intensive margin of adding more workers to land already being used. The wage at the intensive margin will equalize to that of the extensive margin. Workers are paid what they add to production, which is called their marginal product. Continue reading →

Government and Governance

Fred Foldvary Law, Politics , , , , , , , , , , ,

Policy debates typically center around the role of markets versus the role of governments. But this is a misleading distinction. Human society always has governance. Private organizations such as corporations and clubs have management, rules, and financial administration similar in function to those of government. The difference is that private governance is voluntary, while state-based government is coercively imposed on the people within some jurisdiction. So a central question is not whether the market or the government can best accomplish some task, but whether the governance shall be voluntary or coercive.

The Market-Failure Doctrine

Most economists would agree that we don’t live in the best of all possible worlds. But the doctrine of market failure found in most economics textbooks fails to distinguish between consensual and coercive governance as correctives. The prevailing theory asserts that while markets might provide private goods efficiently in a competitive economy, markets fail to provide the collective goods that people want. There are two basic reasons offered as to why markets are not sufficient. Markets can easily determine the demand for private goods, but how can we tell how much each individual wants of a collective good? We could ask people how much they are willing to pay, but how do we get a truthful answer? Free riders also are a problem. Once the collective good is provided, folks can use it whether they pay or not, so why pay?

So, the market-failure story goes, markets fail to deliver collective goods. Entrepreneurs lack incentive because they can’t get their customers to pay for the service the way they can get people to pay for individually consumed private goods. Continue reading →

Private Means, Public Ends: Voluntarism vs. Coercion

Fred Foldvary Books ,

Do you have friends who are socialists? Show them Robert Zimmerman’s chapter, “New York’s War Against the Vans” in Private Means, Public Ends. Zimmerman shows private enterprise efficiently providing much-needed transportation, while the city transit police block passenger pickup, issue summonses, and otherwise harass van operators and passengers. If government is needed to provide such public goods, why does government keep blocking private services?

The essays in Private Means, Public Ends demonstrate how private efforts have effectively provided public goods. This collection of mostly recent articles reprinted from The Freeman will challenge those who doubt the workability of free markets and buttress the thinking of those already oriented to liberty with excellent examples. Case after case, nicely combining stories with analysis, shows voluntary and market means as more effective than government, despite state barriers and imposed costs.

The introduction by Professor Mixon begins with the metaphor of free human action as a wildflower field, in contrast to the potted plants of state institutions. If wildflowers disappear and all we see are flowers in pots, who can imagine the breathtaking beauty of the wild field—nature’s spontaneous order? Continue reading →

Baby’s a Tuna, and It’s Feeling Blue

Fred Foldvary Current Events , , , , , , ,

Bluefin tuna are being hunted to extinction. They have already been reduced to a small fraction of the global numbers of a hundred ago. They may disappear from the Atlantic Ocean by 2012. The average weight of those caught has already been dropping. Other kinds of tuna and related fish are also being slaughtered, but the bluefish will be the first to go under.

Bluefin tuna are the genus Thunnus in the family Scombridae, with several species, among them Thunnus atlanticus (blackfin tuna), Thunnus orientalis (Pacific bluefin), and Thunnus thynnus (Northern bluefin).

The bluefin have a big problem: they taste very good. Tuna have been eaten for centuries. Indeed, the word “tuna” comes from ancient Greek. Canned tuna greatly increased the consumption, but what is finally terminating the bluefin is sushi. Four fifths of the bluefin tuna consumption is for sushi and sashimi. Sushi is seaweed-coated vinegar rice wrapped around a morsel of food such as raw fish, and sashimi is the raw fish by itself.

Bluefin tunas taste good because unlike most fish, they are homeothermic (warm blooded); they metabolize their temperature, like mammals and birds. With a higher body temperature than the surrounding cold water, tuna have a large ocean range. The warmth also enables tuna to swim fast (“tuna” in Greek means “to rush”), which enables them to catch more prey. So bluefin tuna grow up to a size of up to four meters. Continue reading →

The Tragedies of Haiti

Fred Foldvary History ,

The greatest tragedy of the earthquake of 12 January 2010 in Haiti was that the devastation was caused more by human failure than the natural disaster. The earthquake that hit the San Francisco Bay Area in 1989 was about as strong, causing the Bay Bridge to break, but killed only 63 people.

Before the Spanish came, the island of Hispaniola had been divided into chiefdoms, and the two western ones, Jaragua and Marien, became Haiti. Haiti’s first tragedy began with the arrival of the Spanish, who sickened, enslaved and killed off the native Taino Indians.

The second tragedy of Haiti was the importation of African slaves by the Spanish. French pirates and colonists cam to Haiti, The Treaty of Ryswick of 1697 split Hispaniola between Spain and France. Many more French settlers arrived and established plantations producing sugar, coffee, and indigo with slave labor.

A slave rebellion, inspired by the ideals of the French Revolution, fought the French government from 1791 to 1803. The liberated armies were commanded by General Toussaint L’Ouverture. The French National Assembly abolished slavery in the French colonies in 1794, but later Napoleon sent troops to regain French control. Continue reading →

No Tax Favors for Government Employees

Fred Foldvary Politics

There should be no tax favors for the employees of governments. Tax breaks for “public service” amounts to a tax-free increase in their wages, which does not show up in the government’s budget. It is not just sneaky and unfair; it implements a political bias for government and against private enterprise.

In his “State of the Union” address, President Obama advocated debt forgiveness for students who obtain loans and then spend ten years as government employees. This is an expansion of debt cancellation programs that already exist. The College Cost Reduction Act, implemented in 2009, but enacted under President Bush, provides that loans backed by federal guarantees are forgiven after 10 years of public service in government as well as in nonprofit organizations. That program does not include private loans.

If the citizens wish to raise the wages of government employees, they should just do this by raising their money wage, rather than doing this implicitly with tax-free debt cancellations. But many government employees are already overpaid, as they not only get equal or better money wages than those in private enterprise, they often get early retirement and pensions almost the size of their salaries. Many states such as California have chronic large budget deficits because of the high cost of government employees.

What is superior about government work that entitles employees of the state special favors? Are they better people? Is government service intrinsically better than private-sector service? The term “public service” implies that government workers serve the public whereas those in private industry serve just themselves. Continue reading →

Free Banking Explained

Fred Foldvary Economics , , , , , ,

Free Banking is free-market banking. In pure free banking, the money supply and interest rates are handled by private enterprise, there is no restriction on peaceful and honest banking services, and there is no tax on interest, dividends, wages, goods, and entrepreneurial profits. Free banking provides a stable and flexible supply of money, and allows the natural rate of interest to do its job of allocating funds among consumption and investment, thereby preventing inflation, recessions, and financial panics.

To understand free banking, we first need to understand the relationship between capital goods and interest rates. Capital goods, having been produced but not yet consumed, have a time structure. Think of it as a stack of pancakes. The bottom pancake is circulating capital goods, which turnover in a few days, such as perishable inventory in a store. The higher levels take ever longer to turn over. The highest pancake level consists of capital goods with a period of production of many years, the most important type being real estate construction.

Lower interest rates make the pancake stack taller, while higher interest rates make it flatter. Think of trees that take 20 years to mature. Suppose the trees are growing in value at a rate of three percent per year. If bonds pay a real interest rate of four percent, and the interest rate is not expected to change, then the trees will not be planted, since savers will put their funds into bonds instead. But if bonds pay a rate of two percent, then the trees get planted. So the lower interest rate induces an investment in long-lived trees and steepen the capital-goods pancake stack. Continue reading →

Credit Booms Gone Wrong

Fred Foldvary Economics, History , , , , , , , ,

Recent research by economists Moritz Schularick and Alan M. Taylor have confirmed the theory that economic booms are fueled by an excessive growth of credit. They have written a paper titled “Credit Booms Gone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870–2008“, published by the National Bureau of Economic Research.

A major cause of the Great Depression was a credit boom, as analyzed by Barry Eichengreen and Kris Mitchener in their paper, “The Great Depression as a credit boom gone wrong” (BIS Working Paper No. 137). Eichengreen and Mitchener cite Henry George’s Progress and Poverty as providing an early theory of booms and busts based on land speculation. They also credit the Austrian school of economic thought, which in the works of Friedrich Hayek and Ludwig von Mises, had developed a theory of the business cycle in which credit booms play a central role. Henry George’s theory of the business cycle is complementary to the Austrian theory, as George identified the rise in land values as the key role in causing depressions.

An expansion of money and credit reduces interest rates and induces a greater production and purchase of long-duration capital goods and land. The most important investment and speculation affected is real estate. Much of investment consists of buildings and the durable goods that go into buildings as well as the infrastructure that services real estate. Much of the gains from an economic expansion go to higher land rent and land value, so speculators jump in to profit from leveraged speculation. This creates an unsustainable rise in land value that makes real estate too expensive for actual uses, so as interest rates and real estate costs rise, investment slows down and then declines. The subsequent fall in land values and investment reduces total output, generates unemployment, and then crashes the financial system.

We can ask whether this theory is consistent with historical evidence. One strand of evidence is the history of the real estate cycle, which has been investigated by the works of Homer Hoyt, Fred Harrison, and my own writings. Another strand is the history of credit booms, as shown by Schularick and Taylor, who assembled a large data set on money and credit for 12 developed economies 1870 to 2008. They show how credit expansions have been related to money expansions, and how financial innovations have greatly increased credit. Because economic booms are fueled by credit expansion, Schularick and Taylor note that credit booms can be used to forecast the coming downturn.

Followers of Henry George have focused on the real estate aspect of the boom and bust, while the Austrian school has focused on credit, interest rates, and capital goods. A complete explanation requires a synthesis of the theories of both schools, but these recent works on credit booms have not recognized the geo-Austrian synthesis. In order to eliminate the boom-bust cycle, both the real side (real estate) and the financial side (money and credit) need to be confronted.

Current Austrian-school economists such as Larry White and George Selgin have investigated the theory and history of free banking, the truly free-market policy of abolishing the central bank as well as restrictions on banking such as limiting branches and controlling interest rates. In pure free banking, there would be a base of real money such as gold or a fixed amount of government currency. Banks would issue their own private notes convertible into base money at a fixed rate. The convertibility and the competitive banking structure would provide a flexible supply of money along with price stability. The banks would associate to provide one another with loans when a bank faces a temporary need for more base money, or a lender of last resort.

Both the members of the Austrian school and the economists who have studied credit booms have not understood the need to prevent the land-value bubble by taxing most of the value of land. That would stop land speculation and eliminate the demand for credit by land buyers.

But the credit-bubble theorists have not understood that financial regulation and rules for central banks cannot solve the financial side of credit bubbles. Credit booms always go wrong. As the Austrians have pointed out, there is no scientific way to know the correct amount of money or the optimal rates of interest. Only the market can discover the rate of interest that balances savings and borrowing, and only the market can balance money supply with money demand.

Thus the remedy for the boom-bust cycle is both land value taxation and free banking. Land speculation would not be as bad without a credit boom, but will still take place as land values capture economic gains and land speculators suck credit away from productive uses. But also, a credit boom with land-value taxation will still result in excessive construction and the waste of resources in fixed capital goods, reducing the circulating capital need to generate output and employment, as Mason Gaffney has written about.

Economic bliss requires both the public collection of rent and a free market in money.

[Editor’s note: this essay first appeared on Dr. Foldvary’s blog, the Foldvarium, on April 4 2010]