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[VIDEO] The Morality of Profit

The free market needs and deserves a moral defense.

Source: Libertarianism.org

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TOP FIVE Infuriatingly Ignorant Socialist Quotes From Elizabeth Warren

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Intellectuals and socialism have a long, sordid history

Senator Elizabeth Warren (D-MA) is a smart cookie, no doubt about it. In fact, she used to vote Republican, so it appears at once she might have had a tiny soft spot for the free market… not that Republicans really believe in a free market either but… forget them, this is about Warren.

Intellectuals and socialism have a long, sordid history. Academics are generally thought to be highly intelligent, so since so many university professors tend to lean left, wouldn’t that mean that socialism is good because smart people back it?

Not so fast.

In “The Intellectuals and Socialism” by F.A. Hayek, the Austrian economist argued that we may be suffering from what’s known as “sample selection bias,” meaning that there are lots of intelligent people who don’t favor socialism, but these people are more likely to find a productive job in the marketplace, rather than join the academy and teach. In other words… in the famous words of polemicist H.L. Mencken: “Those who can, do. Those who can’t, teach.” And don’t forget that “intellect is not wisdom,” from Thomas Sowell.

Let’s see if Liz Warren has any wisdom to offer in accordance with her intellect.

1. “No one in this country should work full time and still live in poverty.”

Poverty is about more than just how many hours you work. It’s about the decisions you make with the money you earn. Poverty isn’t always a choice, but it isn’t always mandatory either. The US federal government uses poverty thresholds to determine which and how many households have pre-tax income which they claim is insufficient to meet minimal food and basic needs. Really it’s about determining who should receive government assistance, but if you only look at these dollar amounts in American figures, you’re not getting a very good picture of what true poverty is on a global scale. You don’t want to be poor in Europe, trust us.

[Read the full story here, at  thelibertarianrepublic.com]

And it’s a complete fallacy that the poor are getting poorer in America. The bottom fifth of U.S. households in 1975 earned $28,000 more in 1991. Not only that, but the poor’s purchasing power has increased. Here in the good old US of A, even poor people have microwaves, smart phones, and a vehicle or two parked in the old dirt road. Some people are poor and happy. Some people aren’t, but here in America, at least poor can be a choice rather than a mandate.

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2. “The federal government will make $ 51 billion in profits off student loans. That’s more than wrong. It’s obscene.”

There’s that old bugaboo word there “profit” again. As if making a profit was a bad thing. Libertarians don’t think the government should be in the student loan business at all. Read the rest of this entry »


[VIDEO] Santa Monica Evicts Airbnb: The War on Homesharing 

The popular “homesharing” service made it affordable to book a beachfront property in Santa Monica. Then the city intervened.

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[VIDEO] Ted Cruz vs Bernie Sanders Debate the Future of Obamacare 

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[VIDEO] Is America an Imperialist, White-Supremacist, Capitalist Patriarchy? 

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Gender scholars like bell hooks argue that American is an imperialist, white-supremacist, capitalist patriarchy. Is she right? The Factual Feminist responds.  Read the rest of this entry »


The End of an Era: Economist Thomas Sowell Says ‘Farewell’ 

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‘There is no economist alive today who has done more to eloquently, articulately, and persuasively advance the principles of economic freedom, limited government, individual liberty, and a free society than Thomas Sowell.’

 writes: After writing a weekly (sometimes semi-weekly) column for the last 25 years (here’s an archive of his columns back to 1998), economist, scholar, author and national treasure Thomas Sowell made this announcement in his column today (“Farewell“):

“Even the best things come to an end. After enjoying a quarter of a century of writing this column for Creators Syndicate, I have decided to stop. Age 86 is well past the usual retirement age, so the question is not why I am quitting, but why I kept at it so long.”

Here’s a link to Thomas Sowell’s second column today (“Random Thoughts, Looking Back“), here’s some of the reaction on Twitter and the Internet to Sowell’s retirement, here’s Thomas Sowell’s webpage, and here’s his Wikipedia entry. Milton Friedman once said, “The word ‘genius’ is thrown around so much that it’s becoming meaningless, but nevertheless I think Tom Sowell is close to being one.”

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“I don’t think any living free-market economist even comes close to matching Sowell’s prolific record of writing about economics. And I don’t think there is any writer today, economist or non-economist, who can match Thomas Sowell’s “idea density” and his ability to consistently pack so much profound economic wisdom into a single sentence and a single paragraph.”

In my opinion, there is no economist alive today who has done more to eloquently, articulately, and persuasively advance the principles of economic freedom, limited government, individual liberty, and a free society than Thomas Sowell. In terms of both his quantity of work (at least 40 books and several thousand newspaper columns) and the consistently excellent and crystal-clear quality of his writing, I don’t think any living free-market economist even comes close to matching Sowell’s prolific record of writing about economics. And I don’t think there is any writer today, economist or non-economist, who can match Thomas Sowell’s “idea density” and his ability to consistently pack so much profound economic wisdom into a single sentence and a single paragraph.

Even at 86 years old, Thomas Sowell has remained intellectually active with his syndicated newspaper columns and the publication last year of his 40th book — Wealth, Poverty and Politics: An International Perspective — which was, amazingly, his 13th book in the last decade! To honor Thomas Sowell’s well-deserved retirement from writing his invaluable weekly column for the last quarter century, I present below some of my favorite quotations from Dr. Thomas Sowell (most were featured on a CD post in June on Sowell’s birthday) and a bonus video of the great economist:

1. Knowledge. The cavemen had the same natural resources at their disposal as we have today, and the difference between their standard of living and ours is a difference between the knowledge they could bring to bear on those resources and the knowledge used today.

[Read the full story here, at Carpe Diem Blog » AEIdeas]

2. Obamacare. If we cannot afford to pay for doctors, hospitals and pharmaceutical drugs now, how can we afford to pay for doctors, hospitals and pharmaceutical drugs, in addition to a new federal bureaucracy to administer a government-run medical system?

3. Economics vs. Politics I. Economics and politics confront the same fundamental problem: What everyone wants adds up to more than there is. Market economies deal with this problem by confronting individuals with the costs of producing what they want, and letting those individuals make their own trade-offs when presented with prices that convey those costs. That leads to self-rationing, in the light of each individual’s own circumstances and preferences. Read the rest of this entry »


Hollywood’s Views of Capitalism

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The free enterprise system is not inherently corrupt.

Oliver Stone’s Wall Street leads the movie-goer to believe that the securities industry is a rigged game, and that capitalism is inherently corrupt. Hard work as a means to success in the financial community is debunked, only to be supplanted by corruption and law breaking, as securities trading is seen as a game with little or no productive value. Stone presents a harsh judgment on an economic system he fundamentally misunderstands.

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Wall Street has come to be the historical revisionists’ cinematic representation of the 1980s—the so-called “decade of greed.” It, unfortunately, offers a view prevailing not only in the film industry, but in academia and the media as well. In many ways, Wall Street perpetuates a class warfare myth, with contrasts being drawn between so-called haves and have nots, or the bourgeoisie and the proletariat.

The movie’s antagonist is Gordon Gekko, a corporate raider. Gekko’s speech at the stockholders meeting of Telder Paper, his takeover target, is meant by Stone to reflect the corrupt nature of capitalism. In fact, Stone managed—knowingly or not—to provide a glimpse of why corporate raiders provide a positive service in a free market economy. Gekko states:

Telder Paper has 33 different vice presidents, each making over $200,000 a year . . . . Our paper company lost $110,000,000 last year, and I’ll bet half of that was spent in all the paperwork going back and forth between all these vice presidents. The new law of evolution in corporate America seems to be survival of the unfittest. . . . I am not a destroyer of companies; I am a liberator of them. The point is, ladies and gentlemen, that greed for a lack of a better word—is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms, greed for life, for money, for love, knowledge, has marked the upward surge of mankind. And greed—you mark my words—will not only save Teldar Paper, but that other malfunctioning corporation called the United States of America.

Greed or Self-Interest?

The word “greed” in such a speech is Stone’s carrier of corruption. It is his word of choice designed to elicit a specific response from the movie-going audience. After all, how could one view greed favorably? In fact, “self-interest” would have been a more apt term, which was understood over two centuries ago by Adam Smith, the father of capitalism. Smith wrote in An Inquiry into the Nature and Causes of the Wealth of Nations: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” Self-interest removes the judgmental nature of Stone’s presentation, while encompassing not only greed, but also industry, charity, self-improvement, and altruism, i.e., any human motivation.

[Read the full story here, at Foundation for Economic Education]

Gekko’s later statements lend greater clarity to Stone’s view of the world. In reference to a Gekko plan to liquidate the holdings of an airline company, Budd Fox (the movie’s symbol of redemption as he in the end rejects the greed Gekko represents) asks, “Why do you need to wreck this company?” Gekko’s answer: “Because it’s wreckable!” Stone views the breakup of a firm as pure destruction. He is unable to understand what Joseph Schumpeter termed “creative destruction.” That is the notion that resources might be more efficiently used if freed from less profitable ventures and reinvested elsewhere. This is the dynamic aspect of capitalism that allows for renewal and growth.

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But the essence of Stone’s limited vision is captured in Gekko’s definition of capitalism: “It’s a zero sum game. Somebody wins, somebody loses. Money itself isn’t lost or made, it’s simply transferred from one person to another—like magic. This painting here, I bought it ten years ago for $60,000. I could sell it today for $600,000. The illusion has become real, and the more real it becomes, the more desperate they want it. Capitalism at its finest . . . . I create nothing. I own . . . . You’re not naive enough to think that we live in a democracy, are you, Buddy? It’s the free market.” Stone does not understand that wealth can be created, not merely shifted around, and that the free market provides the incentives for individuals to create, innovate, and take risks. He sees a rise in the price of a painting as the pinnacle of capitalism. In fact, it is in those nations that have rejected free enterprise where the only source of value is to be found in a painting, for little else is created.

Wall Street presents a view of capitalism as being controlled by the few at the expense of the many—democracy versus the free market in Gekko’s words. Stone does not understand the nature of an exchange economy, missing a fundamental point that in a free enterprise system, one must first supply a service or good in order to demand; i.e., even the most greedy individuals must supply something that fulfills the needs or wants of another individual in order to participate in an exchange economy. Individuals vote with their dollars, if you will. The phrase “democratic capitalism” seems quite natural, for example, while “democratic socialism” seems oxymoronic. Read the rest of this entry »


[VIDEO] How Can Capitalism Help End Poverty? Here’s How

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Former U.S. Treasury Secretary Lawrence Summers, Nigeria‘s former finance chief Ngozi Okonjo-Iweala and the president of the Institute for Liberty and Democracy Hernando de Soto join us at Fortune-Time Global Forum.


[VIDEO] REWIND: Milton Friedman on the Immorality of Socialism

Milton Friedman is no fan of socialism. And he walks us through his reasoning. Socialism is force he says. Lenin, Stalin, Mao, and Hitler he reminds us only instituted socialism with the oppression and force agains many people who were disadvantaged. Milton Friedman was an American economist who received the 1976 Nobel Memorial Prize in Economic Sciences.

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[VIDEO] Milton Friedman: Is Capitalism Humane? (Q&A) 

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Jeffrey Tucker: Blessed Fish! How the Market Brought It to Your Table

Here’s to fish, and here’s to the technology that has made it possible to enjoy, cheaply and easily, in every household.

Jeffrey Tucker writes: In the Renaissance, painters often featured fishmongers selling fish from tables right there for anyone to buy. Why? For the first time in history, people had money to buy things, from actual merchants. Fish for sale to anyone and everyone was a lovely sign of wealth, an indicator of progress.

Fish preparation now takes less time than it took the burger place yesterday to make me lunch.Still, you could only get it if you lived near the sea. Fast forwarding a few centuries, when I was a kid in West Texas, eating fish at home was unthinkable. Fish
sticks, maybe. Otherwise fish at home didn’t exist. By culture, tradition, and by sheer availability, we ate beef.

“Dramatic things have happened to the market for fish over the past 10 years. It is wholly changed. Now you can get incredibly great fish at nearly every supermarket”

Even today, many people are reluctant to prepare fish at home. This is my strong impression from talking to friends and colleagues.

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This usually traces back to one bad experience. Maybe it came from childhood. The fish was fishy, boney, and just generally dreadful. That one experience can color a lifetime of food choices.

“Hardly any time passes between swimming around and landing in a separately sealed individual packet, ready for eating. Massive improvements in technology (thank you, capitalism) have improved the way fish is caught and brought to market. Now it is caught, cleaned, deboned, and flash frozen right on the boat.”

In my own case, I thought for years I would only eat fish at a restaurant. Only they know how to do it right, I thought. Surely I could never replicate that process at home. At most, I could make those awful breaded fish sticks Mom would drag out on dreaded occasions.

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The Glorious Fishy World

Well, dramatic things have happened to the market for fish over the past 10 years. It is wholly changed. Now you can get incredibly great fish at nearly every supermarket. At Wal-Mart, I recently found a vast selection — tilapia, flounder, swordfish, salmon, whiting, halibut, lobster, and so much more. The prices were ridiculously low. I’ve been sampling them all for months.

[Read the full story here, at Foundation for Economic Education]

What’s the secret? Head to the freezer section. I know it sounds inferior. Wouldn’t you rather have fresh? Not any more.

Hardly any time passes between swimming around and landing in a separately sealed individual packet, ready for eating. Massive improvements in technology (thank you, capitalism) have improved the way fish is caught and brought to market. Now it is 41eQn3GP4ZL._SL250_caught, cleaned, deboned, and flash frozen right on the boat. Hardly any time passes between swimming around and landing in a separately sealed individual packet, right there ready for the eating.

[Order Jeffrey Tucker ‘s bookBit by Bit: How P2P Is Freeing the World” from Amazon.com]

And you don’t have to worry about timing. In the old days, when you bought fish, you had to eat it that night or risk having it become slimy and gross. Now it can stay in your freezer and be ready for you when you want it.

For the first time, the equivalent of fresh fish, stunningly yummy, is available to nearly everyone at low prices, ready for preparation right in your own kitchen. And despite the reputation that fish once had of being difficult to prepare, now it is easier than pork or beef, and even faster.

In other words, cut open the bag, and it is ready to go.

I find this just amazing. That’s a shorter period than it took the burger place yesterday to make me lunch.

And it is a fraction of the price. Read the rest of this entry »


[VIDEO] Q&A with Fred Smith: ‘The Alternative To Innovation Is Not Stability. It’s Stagnation’

“The alternative to innovation is not stability,” says Fred L. Smith, who founded the influential and controversial Competitive Enterprise Institute (CEI) in 1984. “It’s stagnation.”

In 2014, after almost 30 years as CEI’s president, Smith became director of the group’s Center for the Advancement of Capitalism, which champions free markets as the best means to create a fair, prosperous, and future-oriented society. Libertarians, says the one-time federal bureaucrat, have always had a difficulty communicating their ideas to a wider public, even to the entrepreneurs and business leaders who radically improve our lives on a daily basis by providing better and better goods and services at lower and lower prices. “We need to re-calibrate our arguments so they reach the people we need to have as allies. That means businessmen.”

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Reason‘s Nick Gillespie sat down with Smith to talk about the liberating history of capitalism, the regulatory war on innovation, whether millennials are socialists or capitalists, and the morality of market exchanges. “The market not only creates a web of voluntary economic interactions,” says Smith. “It is the best facilitator for creating the social networks that encompass the modern world.” Read the rest of this entry »


Happy 86th Birthday to Economist Thomas Sowell, One of the Greatest Living Economists

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 writes: Two of my all-time most favorite economists — Thomas Sowell and Frederic Bastiat – share the same birthday — they were both born on June 30. To recognize Bastiat’s birthday today I posted some of his quotes on CD yesterday, and I’ll now do the same for Thomas Sowell, who turned 86 today. Here is Thomas Sowell’s webpageand here is his Wikipedia entry. Milton Friedman once said, “The word ‘genius’ is thrown around so much that it’s becoming meaningless, but nevertheless I think Tom Sowell is close to being one.”

In my opinion, there is no economist alive today who has done more to eloquently, articulately, and persuasively advance the principles of economic freedom, limited government, individual liberty, and a free society than Thomas Sowell. In terms of both his quantity of work (at least 40 books and several thousand newspaper columns) and the consistently excellent and crystal-clear quality of his writing, I don’t think any living free-market economist even comes close to matching Sowell’s prolific record of writing about economics. Even at 86 years old, Thomas Sowell is still active and writes two syndicated newspaper columns almost every week (one column in some weeks) and recently released his 40th book last fall Wealth, Poverty and Politics: An International Perspective — which amazingly was his 13th book in the last decade! To honor Thomas Sowell’s 86 birthday today, I present here 15 of my favorite quotations from Dr. Thomas Sowell and a bonus video:

1. Knowledge. The cavemen had the same natural resources at their disposal as we have today, and the difference between their standard of living and ours is a difference between the knowledge they could bring to bear on those resources and the knowledge used today.

2. Obamacare. If we cannot afford to pay for doctors, hospitals and pharmaceutical drugs now, how can we afford to pay for doctors, hospitals and pharmaceutical drugs, in addition to a new federal bureaucracy to administer a government-run medical system?

[Read the full story here, at Carpe Diem Blog » AEIdeas]

3. Economics vs. Politics I. Economics and politics confront the same fundamental problem: What everyone wants adds up to more than there is. Market economies deal with this problem by confronting individuals with the costs of producing what they want, and letting those individuals make their own trade-offs when presented with prices that convey those costs. That leads to self-rationing, in the light of each individual’s own circumstances and preferences.

4. Economics vs. Politics II. The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.” Read the rest of this entry »


[VIDEO] Deirdre McCloskey: What are the Biggest Misunderstandings about Capitalism? 

What are the biggest misunderstandings about capitalism? Deirdre McCloskey, professor at the University of Illinois at Chicago, argues that contrary to common belief, it’s not the amount of capital that has been amassed which sets the last two centuries apart, but rather the explosion of innovation—which in turn has made the capital investment worth it.

Subscribe to AEI’s YouTube Channel


Tax Rates Now & Tax Rates Under Bernie

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[CHART] Share of the World Population Living in Absolute Poverty, 1820-2011

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Frank Zappa on Communism

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Is America is Due for a Revolution?

Revolution of the Eye: Modern Art and the Birth of American TelevisionMay 1, 2015 – September 20, 2015 The Jewish Museum, New York

Here’s the good news: The chaos and upheaval we see all around us have historical precedents and yet America survived. The bad news: Everything likely will get worse before it gets better again.

Michael Goodwin writes: That’s my chief takeaway from “Shattered Consensus,” a meticulously argued analysis of the growing disorder. Author James Piereson persuasively makes the case there is an inevitable “revolution” coming because our politics, culture, education, economics and even philanthropy are so polarized that the country can no longer resolve its differences.

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“How, Piereson wonders, was it possible that Fidel Castro and Che Guevara became heroes to the American left when it was a committed communist who killed the left’s beloved Kennedy?”

To my knowledge, no current book makes more sense about the great unraveling we see in each day’s headlines. Piereson captures and explains the alienation arising from the sense that something important in American life is ending, but that nothing better has emerged to replace it.shattered consensus

The impact is not restricted by our borders. Growing global conflict is related to America’s failure to agree on how we should govern ourselves and relate to the world.

[Order James Piereson’s bookShattered Consensus: The Rise and Decline of America’s Postwar Political Order” from Amazon.com]

Piereson describes the endgame this way: “The problems will mount to a point of crisis where either they will be addressed through a ‘fourth revolution’ or the polity will begin to disintegrate for lack of fundamental agreement.”

[Read the full text here, at New York Post]

He identifies two previous eras where a general consensus prevailed, and collapsed. Each lasted about as long as an individual’s lifetime, was dominated by a single political party and ended dramatically.

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“Piereson also deftly demolishes the myth of Camelot by recounting how a grieving first lady created the legend on a single weekend after the president’s funeral…White and his editors resisted the grandiose and sentimental story line, but finally relented to the grieving widow. White later expressed regret for helping to create the Camelot myth.”

First came the era that stretched from 1800 until slavery and sectionalism led to the Civil War. The second consensus, which he calls the capitalist-industrial era, lasted from the end of the Civil War until the Great Depression.

Author James Piereson

Author James Piereson

“That’s not to say he’s pessimistic — he thinks a new era could usher in dynamic growth, as happened after the previous eras finally reached general agreement on national norms. But first we must weather a crisis that may involve an economic and stock-market collapse, a terror attack, or simply a prolonged and bitter stalemate.”

It is the third consensus, which grew out of the depression and World War II, which is now shattering. Because the nation is unable to solve economic stagnation, political dysfunction and the resulting public discontent, Piereson thinks the consensus “cannot be resurrected.”

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“The problems will mount to a point of crisis where either they will be addressed through a ‘fourth revolution’ or the polity will begin to disintegrate for lack of fundamental agreement.”

That’s not to say he’s pessimistic — he thinks a new era could usher in dynamic growth, as happened after the previous eras finally reached general agreement on national norms. But first we must weather a crisis that may involve an economic and stock-market collapse, a terror attack, or simply a prolonged and bitter stalemate. Read the rest of this entry »


[VIDEO] Is Capitalism Moral? 

Is capitalism moral or greedy? If it’s based on greed and selfishness, what’s the best alternative economic system? Perhaps socialism? And if capitalism is moral, what makes it so? Walter Williams, a renowned economist at George Mason University, answers these questions and more.


[CARTOON] Capitalism Confesses

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New York’s Taxi Cartel Is Collapsing. Now They Want a Bailout. Tell Them to Stick It.

The free market: best anti-monopoly weapon ever developed.

“In New York, we are seeing a collapse as inexorable as the fall of the Soviet Union itself.”

Jeffery A. Tuckerjeff writes: An age-old rap against free markets is that they give rise to monopolies that use their power to exploit consumers, crush upstarts, and stifle innovation. It was this perception that led to “trust busting” a century ago, and continues to drive the monopoly-hunting policy at the Federal Trade Commission and the Justice Department.

No more standing in lines on corners or being forced to split fares. You can stay in the coffee shop until you are notified that your car is there.”

But if you look around at the real world, you find something different. The actually existing monopolies that do these bad things are created not by markets but by government policy. Think of sectors like education, mail, courts, money, or municipal taxis, and you find a reality that is the opposite of the caricature: public policy creates monopolies while markets bust them.

For generations, economists and some political figures have been trying to bring competition to these sectors, but with limited success. The case of taxis makes the point.

“Think of sectors like education, mail, courts, money, or municipal taxis, and you find a reality that is the opposite of the caricature: public policy creates monopolies while markets bust them.”

There is no way to justify the policies that keep these cartels protected. And yet they persist — or, at least, they have persisted until very recently.

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“In less than one year, we’ve seen the astonishing effects. Not only has the price of taxi medallions fallen dramatically from a peak of $1 million, it’s not even clear that there is a market remaining at all for these permits.”

In New York, we are seeing a collapse as inexorable as the fall of the Soviet Union itself. The app economy introduced competition in a41eQn3GP4ZL._SL250_ surreptitious way. It invited people to sign up to drive people here and there and get paid for it. No more standing in lines on corners or being forced to split fares. You can stay in the coffee shop until you are notified that your car is there.

[Order Jeffrey’s book “Bit by Bit: How P2P Is Freeing the World” from Amazon.com]

In less than one year, we’ve seen the astonishing effects. Not only has the price of taxi medallions fallen dramatically from a peak of $1 million, it’s not even clear that there is a market remaining at all for these permits. Read the rest of this entry »


[VIDEO] REASON TV: Whole Foods’ John Mackey: Why Intellectuals Hate Capitalism

They’re jealous, he says, they side with rulers, and they don’t understand how markets work.

 &  “Intellectuals have always disdained commerce” says Whole Foods Market co-founder John Mackey. They “have always sided…with the aristocrats to maintain a society where the businesspeople were kind of kept down.”

More than any other outlet, Whole Foods has reconfigured what and how America eats and the chain’s commitment to high-quality meats, produce, cheeses, and wines is legendary. Since opening his first store in Austin, Texas in 1980, Mackey now oversees operations around the globe and 51YVrzR5lBL._SL250_continues to set the pace for what’s expected in organic and sustainably raised and harvested food.

Check out the book “Conscious Capitalism: Liberating the Heroic Spirit of Business” at Amazon.com]

Because of Whole Foods’ trendy customer base and because Mackey is himself a vegan and champions collaboration between management and workers, it’s easy to mistake Mackey for a progressive left-winger. Indeed, an early version of Jonah Goldberg‘s best-selling 2008 book Liberal Fascism even bore the subtitle “The Totalitarian Temptation from Mussolini to Hillary Clinton and The Totalitarian Temptation from Hegel to Whole Foods.”

[See more at Reason.com]

Yet nothing could be further from the truth—and more distorting of the radical vision of capitalism at the heart of Mackey’s thought. A high-profile critic of the minimum wage, Obamacare, and the regulatory state, Mackey believes that free markets are the best way not only to raise living standards but also to explore new ways of building community and creating meaning for individuals and society.

[Order Jonah Goldberg’s book “Liberal Fascism: The Secret History of the American Left, From Mussolini to the Politics of Meaning”  from Amazon]

At the same time, he challenges all sorts of libertarian dogma, including the notion that publicly traded companies should always seek to exclusively maximize shareholder value. Conscious Capitalism, the book he co-authored with Rajendra Sisodia, lays out a detailed case for Mackey’s vision of a post-industrial capitalism that addresses spiritual desire as much as physial need. Read the rest of this entry »


The Socialist Economics of Italian Fascism

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If classical liberalism spells individualism, Fascism spells government. Sound familiar? 

Lawrence K. Samuels writes: The economics of Italian Fascism is often ignored or trivialized because so much of it is found in today’s world economies. Consider some of the components of fascist economics: central planning, heavy state subsidies, protectionism (high tariffs), steep levels of nationalization, rampant cronyism, large deficits, high government spending, bank and industry bailouts, overlapping bureaucracy, massive social welfare programs, crushing national debt, bouts of inflation and “a highly regulated, multiclass, integrated national economic structure.”1

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“The Fascist conception of life accepts the individual only in so far as his interests coincide with the State…Fascism reasserts the rights of the state. If classical liberalism spells individualism, Fascism spells government.”

— Benito Mussolini, from “Doctrine of Fascism

On numerous occasions, Benito Mussolini identified his economic policies with “state capitalism”—the exact phrase that Vladimir Lenin used to usher in his New Economic Policy (NEP). Lenin wrote: “State capitalism would be a step forward as compared with the present state of affairs in our liberal-fascismSoviet Republic.”2 After Russia’s economy collapsed in 1921, Lenin allowed privatization and private initiative, and he let the people trade, buy and sell for private profit.3 Lenin was moving towards a mixed economy.

[Order Jonah Goldberg’s book “Liberal Fascism: The Secret History of the American Left, From Mussolini to the Politics of Meaning”  from Amazon]

He even demanded that state-owned companies operate on profit/loss principles.4Lenin acknowledged that he had to back away from total socialism and allow some capitalism.

 “In his 1928 autobiography, Mussolini made clear his dislike for liberal capitalism: ‘The citizen in the Fascist State is no longer a selfish individual who has the anti-social right of rebelling against any law of the Collectivity.’”

Mussolini followed Lenin’s example and proceeded to establish a state-driven economic model in Italy. In essence, Mussolini’s fascism was simply an imitation of Lenin’s “third way,” which combined market-based mechanisms and socialism—similar to Red China’s “market socialism.” In short, Lenin’s revised Marxism culminated in “socialist-lite” policies that helped inspire Mussolini to craft his own Italian-style fascism with a right-wing socialist twist. Thus, one could argue that Lenin’s politics were the first modern-day version of fascism and state-corporatism.

01 Adolf Hitler and Benito Mussolini during Hitler's 1938 state visit to Italy

“As the effects of the Great Depression lingered, Italy’s government promoted mergers and acquisitions, bailed out failing businesses and ‘seized the stock holdings of banks, which held large equity interests.’ The Italian state took over bankrupt corporations, cartelized business, increased government spending, expanded the money supply, and boosted deficits. The Italian government promoted heavy industry by ‘nationalizing it instead of letting the companies go bankrupt.”

Economist Ludwig von Mises, who fled the Nazi conquest of Europe, contended that the “economic program of Italian Fascism did not differ from the program of British Guild Socialism as propagated by the most eminent British and European socialists.”5,6

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“The Fascist conception of life accepts the individual only in so far as his interests coincide with the State…Fascism reasserts the rights of the state. If classical liberalism spells individualism, Fascism spells government.”

— Benito Mussolini

In The Concise Encyclopedia of Economics, Sheldon Richman succinctly states: “As an economic system, fascism is socialism with a capitalist 36b25ade-47bd-11e1-9a92-00144feabdc0.imgveneer.”7 He contends that socialism seeks to abolish capitalism outright, while fascism gives the appearance of a market-based economy, even though it relies heavily on the central planning of all economic activities. According to authors Roland Sarti and Rosario Romeo, “[U]nder Fascism the state had more latitude for control of the economy than any other nation at the time except for the Soviet Union.”8

[Read the full text here, at Library of Economic Liberty]

Interestingly, Mussolini found much of John Maynard Keynes’s economic theories consistent with fascism, writing: “Fascism entirely agrees with Mr. Maynard Keynes, despite the latter’s prominent position as a Liberal. In fact, Mr. Keynes’ excellent little book, The End of Laissez-Faire (1926) might, so far as it goes, serve as a useful introduction to fascist economics. There is scarcely anything to object to in it and there is much to applaud.”9

After the worldwide Great Depression, Mussolini became more vocal in his claims that fascism explicitly rejected the capitalist elements of economic individualism and laissez-faire liberalism.10 In his “Doctrine of Fascism,” Mussolini wrote: “The Fascist conception of life accepts the individual only in so far as his interests coincide with the State…Fascism reasserts the rights of the state. If classical liberalism spells individualism, Fascism spells government.” In his 1928 autobiography, Mussolini made clear his dislike for liberal capitalism: “The citizen in the Fascist State is no longer a selfish individual who has the anti-social right of rebelling against any law of the Collectivity.”11 Read the rest of this entry »


Peter Moruzzi: Havana Before Castro, When Cuba was a Tropical Playground

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Remembering Milton Friedman

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Today is the birthday of prominent free-market economist Milton Friedman, recipient of the 1976 Nobel Prize for Economic Science.

Friedman, who passed away in 2006 at the age of 94, was widely regarded as the leader of the Chicago School of monetary economics.

Friedman also wrote extensively on public policy, always with primary emphasis on the preservation and extension of individual freedom.

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Friedman’s ideas on economic freedom hugely influenced both the Reagan administration and the Thatcher government in the early 1980s, revolutionized establishment economic thinking across the globe, and have been employed extensively by emerging economies for decades.

In the picture above,  Friedman is all smiles with Cato Institute founder, Ed Crane and Vice President for Monetary Studies, Jim Dorn.

Learn more about Milton Friedman and his ties to Cato

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‘Everything is Amazing’: The Physical Results of Capitalism and The Paradise of the Real

The Paradise of the Real

Kevin D. Williamson writes:

“We treat the physical results of capitalism as though they were an inevitability. In 1955, no captain of industry, prince, or potentate could buy a car as good as a Toyota Camry, to say nothing of a 2014 Mustang, the quintessential American Everyman’s car. But who notices the marvel that is a Toyota Camry? In the 1980s, no chairman of the board, president, or prime minister could buy a computer as good as the cheapest one for sale today at Best Buy. In the 1950s, American millionaires did not have access to the quality and variety of food consumed by Americans of relatively modest means today, and the average middle-class household spent a much larger share of its income buying far inferior groceries. Between 1973 and 2008, the average size of an American house increased by more than 50 percent, even as the average number of people living in it declined. Things like swimming pools and air conditioning went from being extravagances for tycoons and movie stars to being common or near-universal. In his heyday, Howard Hughes didn’t have as good a television as you do, and the children of millionaires for generations died from diseases that for your children are at most an inconvenience. As the first 199,746 or so years of human history show, there is no force of nature ensuring that radical material progress happens as it has for the past 250 years. Technological progress does not drive capitalism; capitalism drives technological progress — and most other kinds of progress, too…”

Read the full text here…

Dana has good taste. (And a great laugh) In a comment to Dana, Kevin D. Williamson notes: “It’s actually an old piece that’s been making the rounds…” Fooled me, too. I also thought it was new column. Good to see it circulation again.

National Review


CLICHÉS OF PROGRESSIVISM #51: ‘The Free Market Cannot Provide Public Education’

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The Foundation for Economic Education (FEE) has been proud to partner with Young America’s Foundation (YAF) to produce “Clichés of Progressivism,” a series of insightful commentaries covering topics of free enterprise, income inequality, and limited government. This is the final installment in the series. 

(Editor’s Note: For 15 years, the author was editor of The Freeman, the journal of the Foundation for Economic Education. A version of this essay was originally published there in June 2000.)

Sheldon Richman writes: Can the free market provide public education? The short answer, of course, is: yes, look around. Right now, private enterprise and nonprofit organizations provide all manner of education  —  from comprehensive schools with classes in the traditional academic subjects, to specialized schools that teach everything from the fine arts to the martial arts, from dancing to dieting, from scuba diving to scrutinizing one’s inner self.

If we define “public education” as “what the government does now,” then it’s a trick question. Every school serves members of the public. For the sake of this discussion, we can ignore that the word “public” has been corrupted to mean “coercively financed through the tax system.”

Summary

  • As long as government can tax its citizens and then provide educational services to them at a marginal price of zero, much private education will never come into being.
  • Most parents would no more make educational decisions without consulting knowledgeable authorities than they would make medical decisions without consulting doctors.
  • We don’t use the small number of neglectful parents as a pretext for government control or finance of religion. Nor should we use it as a pretext for government control or finance of schooling.
  • Government domination of education assures that the entrepreneurial innovation and creativity we are accustomed to in, say, the computer industry will be missing from education.

The free market — and I include here both for-profit and nonprofit organizations — would provide even more education than it does now but for the “unfair competition” from government. Since government has a resource that private organizations lack — the taxpayers — it’s able to offer its services for “free.” They’re not really free, of course; in the government context, “free” means that everyone pays whether he wants the service or not. Clearly, as long as government can tax its citizens and then provide educational services to them at a marginal price of zero, much private education will never come into being. How ironic that government vigilantly looks for predatory pricing in the private sector when it is the major offender.

[Read the full text here, at The Freeman : Foundation for Economic Education]

There is certainly nothing about education that should lead anyone to doubt that the market could provide it. Like any other product or service, education is a combination of land, labor, and capital goods directed at a particular objective — instruction in academic subjects and related matters demanded by a class of consumers, primarily parents.

Here’s where things may get contentious. Critics of market-provided education are uncomfortable with education’s being treated like a commodity, subject to supply and demand. In the marketplace, consumers ultimately determine what is produced. Entrepreneurs take risks to serve them. And fickle consumers show no mercy when something new and attractive comes along. Ask the shareholders of Boston Chicken or Kodak, among others.

Why should parents alone determine what is and what is not acceptable education? But why not parents? To whose hearts are the interests of children closer? Besides, most parents would no more make educational decisions without consulting knowledgeable authorities than they would make medical decisions without consulting doctors. The uninformed-consumer argument against free-market education is a red herring. Read the rest of this entry »


[VIDEO] Economics: A Price Is a Signal Wrapped up in an Incentive

Join Professor Tabarrok in exploring the mystery and marvel of prices. We take a look at how oil prices signal the scarcity of oil and the value of its alternative uses. Following up on our previous video, “I, Rose,” we show how the price system allows for people with dispersed knowledge and information about rose production to coordinate global economic activity. This global production of roses reveals how the price system is emergent, and not the product of human design. Read the rest of this entry »


[VIDEO] Reason TV: Jason Brennan on Why Capitalism is Better than Socialism


[VIDEO] REWIND: 1940s Capitalism Cartoon Comeback

A great find. For Reason.com writes:A 1940s capitalism cartoon is making a comeback with over 7 million views on YouTube. The cartoon “Make Mine Freedom” was produced by Harding University, a private university in Arkansas in 1948 extolling the virtues of free-market capitalism and inveighing against “isms” particularly communism and statism more generally.

The cartoon mixes humor with serious philsophy as it defines what freedom means: “America is the freedom to work at the job you like, freedom of speech and to peacefully assemble, freedom to own property, security from unlawful search and seizure, the right to a speedy and public trial, protection against cruel punishments and excessive fines, the right to vote, and worhip God in your own way.” Read the rest of this entry »


Mosquitos vs. Capitalism

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[VIDEO] The Most Dangerous Monopoly: When Caution Kills

How the Free Market Can Better Ensure Safe Products

Everyone wants the items they buy to be safe to use or consume. Prof. Howard Baetjer of Towson University explains that when products undergo third-party certification processes to determine their safety, market forces are able to optimize the amount of testing conducted and consumers can use the information provided by certification firms to make their own decisions. It is difficult to say how much testing is enough: another test can always be run on a product, but at some point the benefit of the extra testing outweighs the costs.

In a free-market system, competition among certification firms allows the market to work as it should and prevents both under- and over-testing of products. Conversely, when the government holds the monopoly on safety standards, products are likely to be over-tested, delaying their entry into the market and making them more expensive. Sometimes the costs of such delays cannot be quantified; lives can be lost while life-saving medicines are held up in safety-testing processes. 

doyouevenliberty – runningrepublican

The most dangerous monopoly: When caution kills | LearnLiberty – YouTube

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“If, for any reason, we are unable to finance solar energy systems through tax-advantaged structures … we may no longer be able to provide solar energy systems to new customers on an economically viable basis”

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How to Succeed in Solar Energy: Grab Government Giveaways

What’s the secret sauce? You guessed it…

Lisa De Pasquale reports:  Time and time again, the free market has spoken on alternative energy companies.  Yet, we keep hearing about booming companies like SolarCity.  Watchdog.org (via FoxNews.com) knows the secret to their success:

The company’s stock, initially offered at $8 a share in December 2012, is trading around $82 a share early Monday. And in a shareholder’s meeting last week, company officials said they’re bullish on the company’s future.

Buried in SolarCity documents is the secret to that success. Musk, the billionaire who founded PayPal and is chief executive officer and product architect of electric carmaker Tesla, has built SolarCity on government giveaways — subsidies that will decrease substantially in the next two years.

Read the rest of this entry »


Say What? The New Republic Praises The Onion for ‘Marxist’ Bent

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“Cognitive dissonance or not, Das Kapital has so thoroughly permeated our understanding of capitalism that we’re seldom even aware that we are citing it. It’s become a kind of cultural white noise – always present, but rarely acknowledged.”

Considering that The Onion is post-college humor, it’s not surprising in the least, as universities inoculate students with Marxist dogma. It’s as natural to typical college students as term papers, speech codes, censorship, conformist ‘protests’ (of approved targets) spring break customs, cheating on tests, screwing, drinking beer, and nearly worthless degrees that lead to low-paying jobs and moving back in with their parents. The New Republic‘s admiring, fawning, pro-communist praise of the Onion is, for better or worse, fairly accurate. 

William Bigelow  writes:

Noting pieces such as “Man Briefly Forgets Hotel Staff Are Not Human” as a reminder of “capitalist commodification not just of goods, but of humans’ subjective agency in the form of labor,” “Laid Off Man Finally Achieves Perfect Work-Life Balance” as espousing “the contention that capitalism alienates the proletariat from their species-consciousness by making them participants without control in the economic relations of their culture,” “Majority of Office’s Supplies Used to Apply for Different Job” as a “clear indictment of false consciousness, arising inexorably from bourgeois dogma as it perverts our very understanding of fulfillment, family, and success…”

Read the rest of this entry »


Obama To Americans: You Don’t Deserve To Be Free

Photo by: Pablo Martinez Monsivais President Barack Obama talks about the the budget and the partial government shutdown, Tuesday, Oct. 8, 2013, in the Brady Press Room of the White House in Washington. The president said he told House Speaker John Boehner he's willing to negotiate with Republicans on their priorities, but not under the threat of "economic chaos." (AP Photo/Pablo Martinez Monsivais)

Photo by: Pablo Martinez Monsivais

Harry Binswanger  writes:  President Obama’s Kansas speech is a remarkable document. In calling for more government controls, more taxation, more collectivism, he has two paragraphs that give the show away. Take a look at them.

“…there is a certain crowd in Washington who, for the last few decades, have said, let’s respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If we just cut more regulations and cut more taxes–especially for the wealthy–our economy will grow stronger. Sure, they say, there will be winners and losers. But if the winners do really well, then jobs and prosperity will eventually trickle down to everybody else. And, they argue, even if prosperity doesn’t trickle down, well, that’s the price of liberty.

Now, it’s a simple theory. And we have to admit, it’s one that speaks to our rugged individualism and our healthy skepticism of too much government. That’s in America’s DNA. And that theory fits well on a bumper sticker. (Laughter.) But here’s the problem: It doesn’t work. It has never worked. (Applause.) It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible postwar booms of the ’50s and ’60s. And it didn’t work when we tried it during the last decade. (Applause.) I mean, understand, it’s not as if we haven’t tried this theory.”

Though not in Washington, I’m in that “certain crowd” that has been saying for decades that the market will take care of everything. It’s not really a crowd, it’s a tiny group of radicals–radicals for capitalism, in Ayn Rand’s well-turned phrase.

The only thing that the market doesn’t take care of is anti-market acts: acts that initiate physical force. That’s why we need government: to wield retaliatory force to defend individual rights.

Radicals for capitalism would, as the Declaration of Independence says, use government only “to secure these rights”–the rights to life, liberty, property, and the pursuit of happiness. (Yes, I added “property” in there–property rights are inseparable from the other three.)

That’s the political philosophy on which Obama is trying to hang the blame for the recent financial crisis and every other social ill. But ask yourself, are we few radical capitalists in charge? Have radical capitalists been in charge at any time in the last, oh, say 100 years?

Read the rest of this entry »


Why I Am an Anarcho-Capitalist

LewRockwell2011Llewellyn H. Rockwell writes: A great many people – more than ever, probably – describe themselves as supporters of the free market today, in spite of the unrelenting propaganda against it. And that’s great. Those statements of support, however, are followed by the inevitable but: but we need government to provide physical security and dispute resolution, the most critical services of all.

Almost without a thought, people who otherwise support the market want to assign to government the production of the most important goods and services. Many favor a government or government-delegated monopoly on the production of money, and all support a government monopoly on the production of law and protection services.

This isn’t to say these folks are stupid or doltish. Nearly all of us passed through a limited-government – or “minarchist” – period, and it simply never occurred to us to examine our premises closely.state-vs-market-graphic

To begin with, a few basic economic principles ought to give us pause before we assume government activity is advisable:

  • Monopolies (of which government itself is a prime example) lead to higher prices and poorer service over time.
  • The free market’s price system is constantly directing resources into such a pattern that the desires of the consumers are served in a least-cost way in terms of opportunities foregone.
  • Government, by contrast, cannot be “run like a business,” as Ludwig von Mises explained in Bureaucracy. Without the profit-and-loss test, by which society ratifies allocation decisions, a government agency has no idea what to produce, in what quantities, in what location, using what methods. Their every decision is arbitrary, in a way directly analogous to the problem facing the socialist planning board (as Mises also discussed, this time in his famous essay “Economic Calculation in the Socialist Commonwealth“).

In other words, when it comes to government provision of anything, we have good reason to expect poor quality, high prices, and arbitrary and wasteful resource allocation.

Read the rest of this entry »


Reality Check: Free Market Myths Debunked

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Just as there are timeless truths, there are also timeless falsehoods.

Here are a few of the latter that I’ve recently encountered, but there are, of course, plenty more. Some libertarians may not agree with me (at least at first) on all of them.

1) The free market creates scarcity and higher prices. In any economic system—socialist, interventionist, or free market—the quantity of a good will typically not be enough to satisfy demand when the price is zero. In a free market, in which people trade their legitimate claims to those resources, prices will tend to rise or fall to the level where the quantity supplied equals the quantity demanded, and in that way prices help us to cope with scarcity. Not only that, the free market, via a system of profit and loss, gives entrepreneurs an incentive both to supply more of scarce resources and to discover alternatives to them. (But not all “trade” is conducted this way. See No. 4 below.)

2) The free market means the government gives businesses special privileges. This is a very common belief based on the idea that pro-market means pro-business. But the free market is free precisely because it denies special legal privileges to any person or group. People sometimes define “privilege” as any advantage a person or group may have over others. Certainly such advantages exist today and would exist in a free market—you may be born into a wealthy family or have superior drive and resourcefulness—but these advantages are consistent with the absence of privilege in the libertarian sense, as long as you acquired such advantages without fraud or the initiation of physical violence against the person or property of others.

3) The pre-Obamacare healthcare industry was a free market. Actually, it was a highly interventionist market, as John C. Goodman explains. Similarly, the failures of the housing and financial markets were hardly the result of “free-market policies,” and the same could be said for practically every other sector of the American economy. The free market is free of legal privileges and discrimination; it is whatever happens in the absence of aggression and within certain “rules of the game”—for example, private property, freedom of association, and the rule of law. Again, it’s not pro-business, pro-consumer, or pro-anything if that means using political power to intentionally help some and hurt others.

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[VIDEO] What Libertarians Mean By ‘The Free Market’

Aaron Ross Powell writes:  Markets are much more than multinational corporations, banking firms, and stock brokerages on Wall Street, though all of those things are the result of a market system.

Sound economies, from the biggest multinational banks to a child’s sidewalk lemonade stand, operate on the principles of private property and exchange. These concepts are the building blocks of free societies, and it is the system of countless small trades, taken as a whole, that we call “the market.”

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