Keith Weiner's PhD Thesis Available for Download
As many of our readers probably know, there are a few topics regarding which we are at odds with Dr. Antal Fekete's 'New Austrian School' (to name two of the more important ones that have previously been discussed in these pages: fractional reserve banking and the real bills doctrine).
Nevertheless, Keith Weiner, the president of the US Gold Standard Institute and a follower of Dr. Fekete's school, has become a regular and valued contributor to this site. It is our hope that the occasional juxtaposition of points on which we disagree serves as an encouragement for readers to carefully think through the arguments that are presented and helps to foster debate (we realize of course that quite a few of our readers are already au fait with the subjects concerned).
There are a number of sub-groups in what one might term the 'Austrian tent' that disagree on certain topics. However, what unites all of them is unwavering support for the free market economy and individual liberty, as well as the rejection of statism, violence and coercion.
This is all we really ask of our guest authors as it were. We will obviously never be a forum for interventionist and statist ideas, but we have no problem with publishing articles by authors who support the above mentioned fundamental principles but disagree with us on finer points of economic theory.
In this spirit, we present Keith's PhD thesis “A Free Market for Goods, Services and Money” (pdf).
We can assure our readers that it is a very interesting and thought-provoking read. We will endeavor to publish a critical review as time permits.
Abstract
A free market is composed of people who produce and trade the products of their efforts in exchange for the products of others. Each sets the prices at which he is willing to offer his product and at which he is willing to bid on others’ products. The market is dynamic, with prices constantly changing, and more importantly, spreads between prices always changing. This dynamic is driven by a ceaseless arbitrage whereby people attempt to earn a profit. The free market is able to coordinate the activities of everyone, and enable everyone to optimize his results.
Unfortunately, governments interfere in the free market. They do so by the use of force. They attempt to substitute their gun for the reason of the individuals whose rights are thereby violated. The government always justifies its intrusions on the grounds of helping people. Government officials and voters are not aware of the lessons of Frederic Bastiat. The attempt of all to live at the expense of all is doomed. There ain’t no such thing as a free lunch.
Rather than helping people, the government’s interference inevitably causes distortion. They must take more from point A in the economy in order to give less to point B, and which has the unintended yet still destructive effect on points C, D, and E.
As destructive as government interference is in the area of production, it is that much worse in the area of money and credit. Every aspect of production and trade depends on money, so distortions in this area are magnified. Unfortunately, the government has distorted the monetary system so badly that both are accelerating towards destruction.
The solution, and the only hope for civilization, is to rediscover the principles of free markets, particularly on the monetary realm, and begin returning to a gold standard.
