James Buchanan
2010 Cato Journal   unpublished
The market will not work effectively with monetary anarchy. Politicization is not an effective alternative. We must commence meaningful dialogue with acceptance of these elementary verities. Far too much has been said and written in elaboration of the first statement , which too often is taken to be equivalent to the assertion that "capitalism" or "the market" has failed. Admittedly claims for market efficacy without qualifiers can be found. But economists should know that anarchy can only
more » ... ate disorder rather than its opposite. Within a regime of stability in property rights, contracts, and money, persons will interact, one with another, to generate an order that will produce and distribute value, as determined by their own choices, which they remain at liberty to make. This claim was made by Adam Smith in 1776, but his emphasis on the necessary "laws and institutions" is too often overlooked. Importantly, this precept also informed the thinking of the American Founders, who explicitly included money in their constitutional assignment of authority. Acceptance of the two precepts noted, however, prompts the query: If anarchy in money fails along with politicization, how can the market economy ever be expected to function effectively? The Scylla and Charybdis metaphor seems all too appropriate, until we recognize that the limits here are behavioral rather than natural. Anarchy