The state punishes those who do good (those who provide services that customers are willing to pay for at a price they are willing to pay) and rewards those who do evil (those who use the coercive power of the state to prevent people from entering the marketplace and earning a living).
And so it happened that Birmingham became "emphatically the town of 'free trade'," where practically no restrictions, commercial or municipal, were known" (Timmins 1866, p. ??), and where the notion of free trade was even to be extended, however briefly, to the nation's coinage.
The idea of private coinage seems so strange today that it is worth examining carefully.
They want to abolish private control of the means of production, market exchange, market prices, and competition. But at the same time they want to organize the socialist utopia in such a way that people could act as if these things were still present. – Ludwig von Mises
So when Henry Paulson argues that it is necessary to pump money into credit markets to prevent them from freezing up, he doesn't bother to realize that the money he pumps into the credit markets is coming directly out of the very same credit markets.
Those of us not receiving the new money will be crowded out of the market only to see the prices of our purchases rise and our planning and value of our savings dissipate as it takes more and more money to do in the future what we could today have done for less.
The law of comparative advantage tells us that no matter how much more productive they are than the rest of us, even people who are very productive can be made better off by trading with people who are not.
Bernstein's book takes us outside the here and now and helps us understand the big picture, and he does this by looking at the details of goods traded in lands far away in all times.
By outlawing short selling, the Securities and Exchange Commission outlawed a practice that produces information necessary for financial markets to function smoothly.
Q: So what's the solution?
A: Get out of the way. Let the market work.
