Cafe Hayek: Adam Smith … an economy, if only allowed to work freely
The genius of Adam Smith and other eighteenth-century philosophers lay in their recognition of this coordinating characteristic of the exchange process, and in their explicit analysis of the precise manner in which such an economy would work. Smith showed that such an economy, if only allowed to work freely, in contrast to the network of mercantilist controls that governments of Europe imposed on their economies in the sixteenth and seventeenth centuries, would increase the “Wealth of Nations.”
MD: So why don’t the Mises Monks get this.? When you declare “gold is money” by edict, you are “imposing controls”.
A “proper” MOE process that knows money is created by traders making trading promises spanning time and space and getting them certified … such a process requires “no” controls whatever. All it has to do is record money creation and destruction and immediately recover defaults incurred by interest collections of like amount. It just reacts … it doesn’t control.
It “guarantees” perpetual free supply of money, zero inflation, and zero interest load on responsible traders.