The primary purpose of The Free Market Center consists of providing clear explanations for the economic science advocated by the "Austrian school." They have developed an understanding of human behavior and economic markets that surpasses any of the other schools of economics.
"How did you come to that conclusion?"
People don't often ask that question about the assertions made by economic pundits—economists and media commentators.
When people draw conclusions regarding economic issues, they should be able to explain why they reach those conclusions. If they don't explain, you should call those conclusions into question. But, you need the thinking tools required to help you formulate those questions.
In this section we will discuss the reasoning processes required to come to valid conclusions about economic activity.
Principles consist of assumptions that provide the basis for sound economic reasoning. In terms of logic they amount to truths. Starting with these principles and using valid argument we can arrive at only sound propositions.
The Free Market Center subscribes primarily to the values of Life, Liberty, and Property. I will add other important values as I have clearly defined them.
Although exchange represents of basic activity in markets, we need to break the theory of exchange down into component parts in order to understand it fully — also to begin to understand the critical role that money plays in exchanges.
You can consider everything that you do as an exchange. You eat breakfast in the morning in exchange for hunger. You get dressed in exchange for being naked — or wearing your pajamas all day long. Then, when you go to the store, you exchange something of value for something you value more.
Since most exchanges in the modern world consist of an exchange of money for goods, I have decided to put the details of the theory of economic exchange in the category of Money & Banking. You will see from the brief outline below that my description of the theory of economic exchange leads from voluntary exchange to the use of money.
Markets emerge from the exchange of goods and services. Those exchanges determine the allocation of resources. Free markets comprise voluntary exchanges free from intervention. Free markets represent a natural condition that operates effectively and efficiently without intervention.
As you have seen from the introduction to exchange, money plays a vital role in the efficient operation of large markets. I will cover some of the basics of money in this section and go into more detail in the category devoted entirely to money.
Money & Banking
Money and banking combine as a subject too important to not understand.
Money plays an extremely important role in the operation of any economy. Banking provides the infrastructure and tools for the storing, transfer, and (regrettably) the creation of money. Yet, so few people understand the topics that make up the subject money and banking.
In this section we will examine some of the more complex elements in the topics of money and banking.
Using fallacious and convoluted math, some people argue that the money supply must grow perpetually to pay interest on borrowed money, to maintain stable prices, and prevent deflation. We examine those assumptions.
To understand the nature of exchanges in the modern world we must take into account the many forms of intervention. Violent intervention has become so pervasive that we must consider it in the background of every question about the process of exchange. We must ask, "Would we see a different—and arguably better—result without a specific intervention."
In this section we pick up our discussion of exchange—started in the first section, but with an eye toward how interventions affect those exchanges.
Monetary intervention represents one of the more sinister influences on a market economy. Interference in the money supply cause distortions in money prices the laying false information to economic actors.
Have any of government's interventions in the free market aroused your curiosity? Why do they do such dumb stuff?
Economic crises seem to occur with significant regularity. The topic of economic crises takes up a lot of media time these days. So I will devote space here to discussing the whys and wherefores of economic crises.
The Fraud Enforcement and Recovery Act of 2009 created the Financial
Crisis Inquiry Commission (FCIC) to find the causes of the financial
crisis of 2008. They have started the process, however, by looking in
all the wrong places. I wrote this paper to guide them (or any reader)
to understanding the real source of the problem.