Free Market

Winter is here, and for the last few years this seasonal event has meant the sudden discovery of a brand-new category of the pitiable: the "homeless."

It is a common myth that the near-disappearance of the whale and of various species of fish was caused by "capitalist greed," which, in a short-sighted grab for profits, despoiled the natural resources—the geese that laid the golden eggs—from which those profits used to flow. Hence, the call for government to step in and either seize the ownership of these resources, or at least to regulate strictly their use and development.

It is private enterprise, however, not government, that we can rely on to take the long and not the short view.

September 1986 is an historic month in the history of United States monetary policy. For it is the first month in over fifty years—thanks to the heroic leadership of Ron Paul during his four terms in Congress—that the United States Treasury has minted a genuine gold coin. 

In the last few months, the Reagan administration seems to have achieved the culmination of its "economic miracle" of the last several years: while the money supply has skyrocketed upward in double digits, the consumer price index has remained virtually flat. Money cheap and abundant, stock and bond markets booming, and yet prices remaining stable: what could be better than that? Has the President, by inducing Americans to feel good and stand tall, really managed to repeal economic law? Has soft soap been able to erase the need for "root-canal" economics?

The only way that we can escape from the business cycle is through the establishment of sound money (i.e., a gold standard and no central bank) and the free market. If we are ever able to do so, the Austrian school of economics will deserve the credit.

Today as we move boldly forward into the 21st Century, we have as our most important symbol, the Statue of Ellis  Island. May we never forget its new meaning.

When will we realize that only a genuine gold standard can bring us the virtues of both systems and a great deal more: free markets, absence of inflation, and exchange rates that are fixed not arbitrarily by government but as units of weights of a precious market commodity, gold?

Each year at this time, schoolchildren all over America are taught the official Thanksgiving story, and newspapers, radio, TV, and magazines devote vast amounts of time and space to it. It is all very colorful and fascinating. 

It is also very deceiving.

It is well-known that bureaucracies, especially governmental bureaucracies, have an unparalleled ability to suffocate innovation. Perhaps not as well known is the ability of those same institutions to ignore systematically well-documented, empirically supportable precepts about how the world really works.

Free-market capitalism is a marvelous antidote for racism. In a free market, employers who refuse to hire productive black workers are hurting their own profits and the competitive position of their own company.