Exposition


Explaining concepts related to free markets represents one purpose of The Free Market Center. I have included the following categories of explanations in the section.

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.

Economic Reasoning

"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.

Economic Principles

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.

Value Theory

Because of the fundamental nature of value theory I will return to the subject frequently. I will add to this discussion as time goes on.

Deductive Logic

The power of deductive logic comes from the fact that, if you apply valid logic to true premises, you will arrive at a true conclusion.

Systems Thinking

Because of the connected nature of the world in which we live, systems thinking can aid in better reasoning.

General Semantics

General Semantics consists of the study of the various levels of thought used to evaluate the world in which we live.

Philosophy

Philosophy guides your actions during the course of a normal day. Philosophy, therefore, becomes an important part of thinking about free markets and economics.

Values

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.

Economic Exchange

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.

Introduction to Exchange

It has been said that all human activity consists of exchanges. We will study the theory of exchange in extensive detail throughout this website.

Market Pricing

Prices convey a significant amount of important information about markets. Limited models can prove useful in demonstrating theories about market pricing.

Markets

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.

Money Basics

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.

Creation of Money

You cannot fully understand the topic of Money and Banking without understanding how money gets created.

Monetary System

You cannot fully understand the topic of Money and Banking without understanding how money gets created.

Inflation - Deflation

Changes in the supply of money creates one of the most disruptive influences in market activity. Learn about artificial changes in the money supply and its effect on the economy.

Bank Limitations & Losses

A lot of misconceptions exist about the regulations that control the behavior of Federal Reserve member banks.

Perpetual Growth of Money

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.

Money Not Debt

Somehow the idea of that debt equals money has become popular in some circles. This argument does not hold up under logical scrutiny.

Money Matters

The importance of money cannot be overstated. To not understand money and its role in the economy, amounts to not understanding the economy at all.

Money Fallacies

A collection of the many myths about money.

Market Intervention

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.

Redistribution

The forcible redistribution of economic resources — primarily by governments — causes harmful distortions in markets and the waste of precious resources.

Regulations

Government regulation interferes with people's right to interact freely in an open market.

Monetary

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.

Bank Legislation

The power of banks and the Federal Reserve system depends on authorities granted to them by banking legislation. Understand how banks operate under federal (and sometimes state) charters.

Federal Government

The intervention of the federal government, which creates a particularly problematic form of intervention, seems to grow without limitation.

State & Local

The construction worker will insert a summary as soon as he has the page contents outlined.

Economic Curiosity

Have any of government's interventions in the free market aroused your curiosity? Why do they do such dumb stuff?

Economic Crises

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 Roots of a Financial Crisis

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.

Real Estate Crisis

Government legislators for many decades have given undo importance to real estate. That emphasis led, in part, to the real estate crash 2007-2008.