Economics Dictionary of ArgumentsHome
| |||
|
| |||
| Free market: A free market in economics is a system where prices and the distribution of goods and services are determined by supply and demand, with minimal government intervention. In a free market, producers and consumers make decisions based on their self-interest, leading to competition, innovation, and efficient resource allocation. See also Markets._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
| Author | Concept | Summary/Quotes | Sources |
|---|---|---|---|
|
Murray N. Rothbard on Free Market - Dictionary of Arguments
Rothbard III 176 Free market/contracts/Rothbard: (…) contracts assigning away the will of an individual cannot be enforced in such a market, because the will of each person is by its nature inalienable. >Goods/Rothbard. On the other hand, if the individual made such a contract and received another’s property in exchange, he must forfeit part or all of the property when he decides to terminate the agreement. We shall see that fraud may be considered as theft, because one individual receives the other’s property but does not fulfill his part of the exchange bargain, thereby taking the other’s property without his consent. This case provides the clue to the role of contract and its enforcement in the free society. Contract must be considered as an agreed-upon exchange between two persons of two goods, present or future. >Contracts. Rothbard III 177 On the other hand, take the case of a promise to contribute personal services without an advance exchange of property. Thus, suppose that a movie actor agrees to act in three pictures for a certain studio for a year. Before receiving any goods in exchange (salary), he breaks the contract and decides not to perform the work. Since his personal will is inalienable, he cannot, on the free market, be forced to perform the work there. Further, since he has received none of the movie company property in exchange, he has committed no theft, and thus the contract cannot be enforced on the free market. >Invasion of Property/Rothbard. Rothbard III 616 Free market/Rothbard: International Trade/Rothbard: trade.” In a purely free market, (…) there can be no such thing as an “international trade” problem. The laws of the free market (…) apply, (…) to the whole extent of the market, i.e., to the “world” or the “civilized world.” Wages: Wage rates will tend toward uniformity for the same labor in different geographical areas in precisely the same way as from industry to industry or firm to firm. >Geographical factors. Rothbard III 622 VsFree market/VsRothbard/Rothbard: Many people criticize the free market as follows: Yes, we agree that production and prices will be allocated on the free market in a way best fitted to serve the needs of the consumers. But this law is necessarily based on a given initial distribution of income among the consumers; some consumers begin with only a little money, others with a great deal. The market system of production can be commended only if the original distribution of income meets with our approval. Distribution/RothbardVsVs: This initial distribution of income (or rather of money assets) did not originate in thin air, however. It, too, was the necessary consequence of a market allocation of prices and production. It was the consequence of serving the needs of previous consumers. (…) after the initial period, the effect of unjust incomes becomes less and less important. For in order to keep and increase their ill-gotten gains, the former robbers, now that a free economy is established, have to invest and recoup their funds so as to serve consumers correctly. If they are not fit for this task, and their exploits in predation have certainly not trained them for it, then entrepreneurial losses will diminish their assets and shift them to more able producers. >Consumer’s Sovereignty/Hutt, >Consumer’s Sovereignty/Rothbard. Rothbard III 640 Free market/Rothbard: Criticism of steel owners for not producing "enough" steel or of coffee growers for not producing "enough" coffee also implies the existence of a caste system, whereby a certain caste is permanently designated to produce Steel, another caste to grow coffee, etc. Only in such a caste society would such criticism make sense. Yet the free market is the reverse of the caste system; indeed, choice between alternatives implies mobility between alternatives, and this mobility obviously holds for entrepreneurs or lenders with money to invest in production. >Cartels/Rothbard, >Cartels/Mises. Rothbard III 748 Free market/patens/copyright/inventions/Rothbard: On the free market, there would therefore be no such thing as patents. There would, however, be copyright for any inventor or creator who made use of it, and this copyright would be perpetual, not limited to a certain number ofyears. Obviously, to be fully the property of an individual, a good has to be permanently and perpetually the property of the man and his heirs and assigns. If the State decrees that a man's property ceases at a certain date, this means that the State is the real owner and that it simply grants the man use of the property for a certain period of time.(1) >Patents/Rothbard, >Copyright/Rothbard, >Inventions/Rothbard, >Research funding/Rothbard. Rothbard III 803 Purely free market/Rothbard: In a purely free market where fraud cannot, by definition, occur, all bank receipts will be genuine, i.e., will represent only actual gold or silver in the vaults. In that case, all the bank's money-substitutes (warehouse receipts) will also be money certificates, i.e., each receipt genuinely certifies the actual existence of the money in its vaults. The amount of gold kept in bank vaults for redemption purposes is called its "reserves," and the policy of issuing only genuine receipts is therefore a policy of " 100-percent reserves" of cash to demand liabilities (liabilities that must be paid on demand.(2) Reserve: However, the term "reserve" is a misleading one, because it assumes that the bank owns the gold and independently decides how much of it to keep on hand. Actually, it is not the bank that owns the gold, but its depositors.(3) >Bank Reserve/Rothbard. 1. For a legal hint on the proper distinction between copyright and monopoly, see F.E. Skone James, “Copyright” in Encyclopedia Britannica (14th ed.; London, 1929), VI, 415–16. For the views of nineteenth-century economists on patents, see Fritz Machlup and Edith T. Penrose, “The Patent Controversy in the Nineteenth Century,” Journal of Economic History, May, 1950, pp. 1–29. Also see Fritz Machlup, An Economic Review of the Patent System (Washington, D.C.: United States Government Printing Office, 1958). 2. Time deposits are, legally, future claims, since banks have a legal right to delay payment 30 days. Moreover, they do not pass as final media of exchange. The latter fact is not determining, however, since a secure claim to a money-substitute is itself part of the money supply. "Idle" cash balances are kept as "time deposits," just as gold bullion is a more "idle" form of money than coins. The deciding factor, perhaps, is that the 30-day limit is virtually a dead letter, for if a "savings" bank should impose it, a bankrupting "run" on the bank would ensue. Furthermore, actual payments are sometimes made by "cashiers' checks" on time deposits. Thus, "time" deposits now function as demand deposits and should be treated as part of the money supply. If banks wished to act as genuine savings banks, borrowing and lending credit, they could issue I.0.U's for specified lengths of time, due at definite future dates. Then no confusion or possible "counterfeiting" could arise. 3. Such items as bills oflading, pawn tickets, and dock warrants have been warehouse receipts rooted in the specific objects deposited, in contrast to the loose "general deposits" where a homogeneous good can be returned. See W. Stanley Jevons, Money and the Mechanism ofExchange (16th ed.; London: Kegan Paul, Trench, Trübner & Co., 1907), pp. 201-11._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
||
> Counter arguments against Rothbard
> Counter arguments in relation to Free Market
Authors A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Concepts A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
