Sunday
This is the abstract of a dissertation by Dr. Keith Weiner. The link to the complete body is at the bottom. For the economically inclined, it’s well worth reading. Keith is a clear thinker on the subject of economics. A rarity.
Abstract
A free market is composed of people who produce and trade the products of their efforts in exchange for the products of others. Each sets the prices at which he is willing to offer his product and at which he is willing to bid on others’ products. The market is dynamic, with prices constantly changing, and more importantly, spreads between prices always changing. This dynamic is driven by a ceaseless arbitrage whereby people attempt to earn a profit. The free market is able to coordinate the activities of everyone, and enable everyone to optimize his results.
Unfortunately, governments interfere in the free market. They do so by the use of force. They attempt to substitute their gun for the reason of the individuals whose rights are thereby violated. The government always justifies its intrusions on the grounds of helping people. Government officials and voters are not aware of the lessons of Frederic Bastiat. The attempt of all to live at the expense of all is doomed. There ain’t no such thing as a free lunch.
Rather than helping people, the government’s interference inevitably causes distortion. They must take more from point A in the economy in order to give less to point B, and which has the unintended yet still destructive effect on points C, D, and E.
As destructive as government interference is in the area of production, it is that much worse in the area of money and credit. Every aspect of production and trade depends on money, so distortions in this area are magnified. Unfortunately, the government has distorted the monetary system so badly that both are accelerating towards destruction.
The solution, and the only hope for civilization, is to rediscover the principles of free markets, particularly on the monetary realm, and begin returning to a gold standard.
Download the dissertation here.