Many people criticize the free market as “materialistic”; it reduces everything to monetary values. Murray Rothbard analyzes this charge against the free market, and in this week’s column, I’d like to consider his distinct perspective. He first sets the stage:

There has been a lot of buzz going on about nudges ever since Thaler and Sunstein popularized the concept in their book “Nudge: Improving Decisions About Health, Wealth, and Happiness” published in 2008. Nudges are basically subtle suggestions or motivations devised to change people’s behavior without denying them the freedom to make own decisions. Thaler and Sunstein define nudges as:

Both Sweden and Finland have applied for membership within the North Atlantic Treaty Organization this week, with both countries ending their long-standing policy of neutrality. On Wednesday, several NATO members announced they would immediately extend NATO-like military defense to both Finland and Sweden.

In 2008 Warren Buffett issued a public challenge to the industry he most despised: hedge funds. Charging its clients 2% of assets under management plus 20% of any profits, Buffett wagered none of them could beat the annual return of the S&P 500. That bet was accepted, and ten years later the token wager of one million dollars was duly paid to the charity of Buffett’s choice.

Below is a graph depicting the results of the participating funds against the returns of an S&P 500 Index: