Tuesday 30th September, 2008. Sir, Your editorial “In praise of free markets” (September 27/28) conflates regulation of trade markets with that of financial markets.
This is a flawed analysis, one at the core of most economic orthodoxy – that money, like land, oil, soya beans, diamonds or gold, is a commodity, and therefore that trade and markets in money are no different from markets in, say, soya beans.
I am not an economist. I heard that there was a flaw with Keynes theory: stagflation. I’ve been
reading about Austrian economics (such as “Economics in One Lesson”). It has a lot of appeal and makes much sense to me. I personally like the idea
of a safety net though that isn’t reliant on charity/philanthropy.
A return to a gold standard has some appeal. It would mean that money
was a commodity and could operate like other commodites as you say. Another reasonable alternative is to have a fixed amount of fiat money
(including debt – broad money I think).
I look forward to the talk of reform that this crisis will bring. Let’s hope the depression isn’t
long and deep.