A Piece of Street Wisdom
The Reverend Doctor John K. Williams has been a teacher end currently does free-lance writing and lecturing from his base in North Melbourne, Victoria, Australia.
One of the illusions of our age is that wisdom is most likely to be found in the writings of the learned and the deliberations of academia. That this belief is an illusion is demonstrated if, in imagination, we take a tour of Athens as it was in the fifth century B.C.
Scholars we can find aplenty. The historian Thucydides is penning a volume which, he claims, “is not . . . designed to meet the taste of an immediate .public, but [to] last for ever.”[1] The philosopher Socrates is raising questions destined to haunt the human mind for millennia. The dramatist Sophocles is writing plays which audiences, in the year 1985 A.D., will still find awesome.
Yet in the streets of Athens ordinary people are doing what ordinary people ever have done and ever will do. They haggle in the market, discuss the weather, and make wagers on sporting events. They boast of their triumphs, lament their tragedies, and devise their schemes. They tell one another jokes and pass on the latest gossip. Occasionally they spice their conversations with snippets of street wisdom, quoting proverbs they drank in with their mothers’ milk.
One such proverb might puzzle us. “Ah, well,” one Athenian sighs, “the avenging gods are shod with wool.” “True, true,” nods his neighbor, and the conversation proceeds. And we wonder. “What,” we ask, “does this saying mean? . . . . The avenging gods are shod with wool.”
Actually, the saying enshrines a dramatic change in Greek thought, a change explored by Gilbert Murray in his magnificent little volume, Five Stages of Greek Religion.[2] The Greeks once believed that the avenging gods were swift and furious, riding in fiery chariots and announcing their entry into human affairs by ear-shattering thunder. They exacted vengeance with a blazing sword the visibility of which brought fear to the hearts of erring mortals.
The proverb questions this picture. The avenging gods, it affirms, are slow, deliberate, silent. No thundering sound or blazing sword signifies their presence. Their footfall is as soft as a whisper or a sigh. There is no noise, no spectacle, no chase, no headlong pursuit. For the feet of the avenging gods are shod with wool.
It would be superficial to dismiss the saying because we no longer believe in the avenging gods of Greek mythology, be these gods drawn by galloping steeds or shod with wool. Indeed, the Greeks themselves did not take the inhabitants of Mount Olympus too literally. What they be lieved and what the folk-saying we are considering affirmed, is that life is consequential. Actions have consequences which, while not always obvious, are inescapable.
They saw it in nature. A sapling, struggling toward the sky, is injured. It continues to grow, but the injury it incurred has consequences. The grown tree is crooked. The unintended injury has undesired consequences.
So, affirmed the ancient Greeks, with human life. The actions we sow determine the harvest we reap. That this is so is not, they held, entirely to be regretted. If a growing sapling could not bend its trunk to an injury, it could not bend its roots around rocks and seek out nourishment. If error did not carry the consequences of error, truth could not carry the consequences of truth. Unless folly brought the consequences of folly, wisdom could not bring the consequences of wisdom. If actions defying the laws of nature did not lead to disaster, actions in accordance with these laws could not lead to blessing. Indeed, were the world capricious rather than consequential, knowledge and partial control of the world would be impossible. Or so the ancient Greeks believed.
Actions Have Consequences
No sphere of human activity more displays the reluctance of human beings to acknowledge the consequential nature of their world than does the economic sphere. Again and again men and women have learned to their dismay that actions defying economic laws lead to disaster, but it would seem that our species suffers what educationalists pretentiously call a “subject-specific learning difficulty.” National leaders, laughingly called statesmen, launch a war against economic reality, then desperately seek for scapegoats when the nation they have so ill-served suffers the consequences. Social reformers, all too many of whom wear clerical collars, proffer for the re-mediation of real and imagined social ills the snake-oil nostrums of yesteryear. The mistakes of the past are repeated in the present. It is tempting to ask with Bob Dylan, “When will they ever learn?” Dylan’s assurance that “the answer, my friends, is blowin’ in the wind” I do not presume to understand, but I do know that, in the words of Scripture, those who “have sown the wind” sooner or later “shall reap the whirlwind.”[3]
Many today have “sown the wind.” Many today act as though the laws of economics could be defied. Yet if we listen we can hear a soft footfall. If we look we can see the pale shadows of ghostly figures just behind us. For the avenging gods, shod with wool, are in pursuit.
The Creation of Wealth
First, we have ignored the process whereby wealth is created. We have acted as though wealth could be created by political edicts. For most of humanity’s history men and women have so acted, hence examples of such behavior are legion. Let us consider, however, the cluster of writ ings, edicts and policies, usually known as mercantilism, which directed the economic life of most European nations during the seventeenth and eighteenth centuries.
Rigorous laws, designed to achieve the goal of an export surplus, controlled imports. Maximum wage laws allegedly kept the cost of production low. Governments dictated the cost of material goods. The children of the poor were trained so that they could labor in industries judged important by bureaucrats. In the France of Louis XIV state officials decided what industries were to be created and where in France or her colonies they were to be located. Self- styled experts dictated, to take but one example, what patterns were to be woven in the state- owned tapestry works at Aubusson, it taking some four years of intense negotiation between weavers and state officials before backwarp could be introduced into fabrics. Rules laid down between 1666 and 1830 for the textile industry filled in excess of two thousand pages.
The situation in the United States of America was only slightly less bizarre. The distant ruler who, in the words of the Declaration of Independence, had sent “hither swarms of Officers to harass [your] people” included among those officers not a few whose task it was to ensure that such commodities as tobacco, beaver pelts, pig and bar iron, and whale fins were traded only with Great Britain. Hats and woolen goods were not to be exported from one of your provinces to another. The story is well told by John Chamberlain in his volume, The Roots of Capitalism.[4] As an unrepentant Anglophile I draw my only comfort from the knowledge that attacks on George III and his policies penned in your nation were exceeded in thoroughness only by an attack penned in Great Britain by Adam Smith.
Fruits of Mercantilism
But what were the fruits of the economic system coordinated by political edicts we call mercantilism? They were the same as the fruits of any economic system so coordinated. Life, for the masses, was poor, nasty, brutish and short. The United Kingdora, France and your country were cursed by recurrent famines. Life expectancy at birth was, in the France of 1800, twenty- four for males and twenty-seven for females. In 1780, over 80% of French families spent at least 90% of their income solely .on bread. A few people, admittedly, prospered, but the many did not, and this unhappy situation was perpetuated by a plethora of brutally enforced laws establishing and maintaining a rigid system of caste, class and privilege.
The disastrous consequences of mercantilism were no accident—indeed, the disastrous consequences of any economic system coordinated by political edicts are no accident. For such economies ignore a simple but unalterable truth. Human beings are not omniscient. The knowledge of any person is fragmentary, imprecise, and imperfect.
The point is perhaps best made by considering first the situation of a small, primitive tribe. Its way of life has remained unchanged for generations. Members of the tribe know, by and large, what skills the tribe possesses, what needs the tribe has, and what material resources the tribe enjoys. Given this knowledge, tribal elders or all members of the tribe meeting together can lay down rules specifying how the tribe is to use what it has to acquire what it wants.
But consider the problem facing a large and complex society. Skills are dispersed through literally millions of people, and constantly change as new technologies evolve. People want many different things. The material resources available are distributed globally and are characterized by ever-altering relative scarcities. No individual or set of individuals, however wise or however benign, conceivably could collate and synthesize the totality of information so widely dispersed and so subject to change.
Yet this information, wondrously, is available, and economic decisions—decisions as to how a people can best use what they have to acquire what they want—can be made by reference to this information. Friedrich A. Hayek puts it succinctly and puts it well. “Each individual can rarely know the conditions which make it desirable, for him as well as for others, to do one thing rather than another, or to do it in one way rather than another. It is only through the prices he finds in the market that he can learn what to do and how. Only they, constantly and unmistakably, can inform him what goods or services he ought to produce in his own interest as well as the general interest of his community or country as a whole. The ‘signal’ which warns him that he must alter the direction or nature of his effort is frequently the discovery that he can no longer sell the fruits of his efforts at prices which leave a surplus over costs.”[5] Simply, chang ing relative money prices encode information about people’s changing wants, changing technologies, and changing relative scarcities of raw materials, otherwise unavailable.
Why Socialism Fails
This is why economics coordinated by political edicts do fail and must fail, misallocating resources and thereby spawning destitution and the human suffering destitution entails. This is why, as Ludwig von Mises compellingly argues, socialist economies cannot succeed.[6] This is why, to make the general specific, Tanzania, which once enjoyed thriving agricultural bases but socialized these bases in the name of agrarian reform, is today utterly dependent upon foreign aid for the most basic of foodstuffs. This is why, in socialist nations, men and women are not able to use what they have to acquire what they want, including food for their bellies and shelter for their bodies.
The point is not that their rulers are heartless or evil, deliberately issuing edicts which misallocate resources. Rather, the point is that economic reality has been defied. The most obvious of truths has been forgotten. People are finite, fallible creatures. The only means whereby finite, fallible beings can, in a large and complex society, obtain the information necessary if they are to use what they have to acquire what they want, has been ignored. And the avenging gods, shod with wool, inexorably overtake those who presume to defy reality.
Yet let us not pretend that these gods, slowly and silently, are not pursuing us. We may not totally have abolished a market economy, but we have severely fettered it, thereby distorting the information changing relative money prices encode. Tariffs. Quotas. Subsidies. Minimum wage laws. A plethora of regulations controlling industry. We have not utterly ignored economic reality, but we have infringed its laws. And the consequences are inescapable, their cost to human well-being incalculable. For the avenging gods cannot be deterred from their task.
At the heart of economic reality is the thinking, valuing, choosing and acting being we call “man” or “woman.” If we are to discover the law-abiding processes defining economic reality, our focus must therefore be upon this being. Should we pretend otherwise, thinking and writing and acting as though abstract fictions are concretely real, whereas flesh and blood people are irrelevant to our concerns, we invite error and the pursuit of the avenging gods.
The general fallacy informing such a pretense was called by the philosopher A. N. Whitehead “the fallacy of misplaced concreteness.”[7] Contemporary philosophers prefer to see the fallacy as an instance of what they call a “category mistake.”[8] In a paper entitled, “Redigging Old Wells.”[9] I suggest that social scientists are peculiarly prone to this error. A summary statement of the argument I develop in that paper may, however, here be appropriate, although I urge any person wishing to follow up the point carefully to read Friedrich A. Hayek’s volume, The Counter-Revolution of Science.[10]
The Priority of the Particular
Imagine that ten people are castaways on an island. Innumerable relationships between these people are formed. For some purposes it may be useful to refer to the “community” or the “society” existing on the island, but these expressions do not signify some single existing entity distinct from the ten individuals and the relationships between them. Rather, the expressions are a useful shorthand whereby we refer to the individuals and their relationships. If one of the ten individuals acquires a monopoly of coercive power, and starts ordering his nine companions around and exacting tribute from them, no mysterious eleventh “thing” called the “state” has magically come into existence. All that exists is one bullying ruler, nine bullied victims, and the relationships between these sets of individuals, relationships characterized by coercion.
Admittedly, the term “society” is frequently used to include institutions and customs no living individual created. This indicates, however, that the term “society” can designate the predecessors of an existing generation and the heritage these people passed on to their successors. As G. K. Chesterton somewhere observes, a particular generation is but “the small and arrogant oligarchy of those who merely happen to be walking about.” The ten castaways on our imaginary island doubtlessly bring into their present skills and practices inherited from the past. The crucial point, however, still holds. Terms such as “community” and “society” and “state” do not refer to concrete, existing “things” somehow distinct from individual human beings and their relationships.
When economists forget this, mischief is afoot. For the economist who deals in the abstractions called “aggregates” is ever in danger of losing from his sight the thinking, valuing, choosing and acting individual. He is thus in danger of departing from reality.
As a case in point, consider the seemingly self-evident proposition that an increase in the marginal tax rate will be followed by an increase in tax revenues. The assertion seems perfectly obvious—but only if individual people and their possible responses to an increased marginal tax rate are ignored.
Tax Models
To make this point, I shall refer to two “tax rate-tax revenue” models elaborated by Professors A. Laffer[11] and P. Gutmann.[12] I do so with some hesitation, for the models—the so-called Laffer Curve and Gutmann Curve—themselves can lure us into committing the fallacy of misplaced concreteness. The models are not photographs of reality or even portraits of reality; at best they are like cartoons featuring characters such as Uncle Sam and John Bull. Unlike a diagrammatic representation of, say, Boyle’s Law, which enables us to make specific predictions about the behavior of gases, the diagrams we shall consider cannot be used as a basis for precise prediction. Yet, given that we exercise due caution, the Laffer and Gutmann Curves can assist us in understanding a vital truth.
The Laffer Curve purportedly shows that increases in the tax rate cannot generate a rise in government receipts indefinitely. A zero tax rate means no government revenue. A 1% tax rate results in some government revenue. A 2% tax rate almost certainly leads to greater government revenue than does a 1% tax rate. Yet a 100% tax rate produces tax revenue approaching that resulting from a zero tax rate—namely, zero revenue. At some point, an increase in the marginal tax rate results in an individual choosing leisure rather than paid employment, and if sufficient individuals do this, tax revenue drops.
Put it this way. A person earns $100 a day. On Monday he is taxed at the rate of 20%, retaining $80 from his original $100. The cost of leisure—the cost of not engaging in paid employment and instead walking in the park, visiting friends, listening to the music of Mozart, and so on—is a forgone $80. On Tuesday a 40% tax rate applies, the individual retaining only $60 from his earnings. The cost of leisure has thus dropped, the individual forgoing only $60 if he chooses not to go to work. On Wednesday and Thursday the tax he pays rises to 60% and 80% respectively of his earnings. By Thursday the cost of leisure is temptingly low, being merely $20 forgone. On Friday a 100% tax rate applies. The cost of leisure is now zero—save, perhaps, for whatever pleasure an individual derives from his work and the company of his working compan ions. Simply, at some point an increase in the marginal tax rate will so decrease the cost of leisure, that many people will choose leisure rather than paid employment. Tax revenues thus drop. Hence the Laf-fer Curve (Figure I).
I repeat that this tidy diagram ridiculously oversimplifies complex reality. It might suggest that if governments were smart enough, they could discover a tax rate which, at all times and places, maximizes government revenue. Clearly, this is nonsense. The point at which the cost of engaging in paid employment—that is, forgone leisure—becomes so high that what is forgone by not working is less valuable to an individual than the joys of his leisure activities, varies from person to person and, in the case of a specific individual, from time to time. What the Laffer Curve dramatically displays is that an increase in the marginal tax rate can so reduce the cost of leisure that an individual may rationally change his pattern of behavior in a way that reduces tax revenue. A consideration of the relationship between the marginal tax rate and tax revenue that ignores the thinking, valuing, choosing and acting individual is absurdly simplistic and misleading.
The Gutmann Curve depicts another possible human response to increasing marginal tax rates. Instead of choosing leisure rather than paid employment, individuals may choose to transfer their productive activities from the “legal” economy to the so-called “subterranean” economy. Gutmann suggests that three distinct phases in the relationship between the “legal” economy, the “subterranean” economy, tax rates and tax revenues, can be specified. Given a low marginal tax rate, the totality of goods and services people cooperatively produce—a totality, incidentally, which is itself a fiction we must handle with care—will involve both a legal output and an illegal output, but a relatively small illegal output. As the marginal tax rate climbs, the ratio of legal output to illegal output changes, more individuals deciding to switch their productive activities to the “subterranean” economy. Since typically an illegal activity is less efficient than an open market exchange, the total productive output of a community drops. Finally, a limit is reached: given the institutional structures obtaining, no further economic activities can be transferred from the “legal” economy to the “subterranean” economy. Hence the Gutmann Curve (Figure II).
Again, my warning message: Diagrams depicting a relationship between abstractions are an economic health hazard! Yet the diagram does depict a very real choice individuals can make when confronted with an increase in the marginal tax rate. The Gutmann Curve, like the Laffer Curve, suggests that a government may threaten its own well-being—and, indeed, the well-being of an entire community—by increasing marginal tax rates. A decrease in government revenues does not in itself disturb me; indeed, I deplore attempts to “sell” the Laffer and Gutmann Curves to governments by the lure of increased government revenue. I am disturbed by a decrease in the number of goods and services a community produces and provides, for this affects the material well-being of all people—save, perhaps, government officials. Certainly, a decrease in the number of goods and services available to a community is disastrous from the point of view of the poorest.
Marginal Tax Rates Affect the Marginal Dollar
I have but touched on the consequences of tax policies dictated by theories which, focusing upon aggregates, ignore the real world of flesh and blood people. I make one further point. Marginal tax rates affect, by definition, the marginal dollar. Now the marginal dollar is important, for it is that dollar which an individual is most likely to save and to invest. Put it this way. An individual wins the lottery and, after tax, has $100,000 at his disposal. He is tempted either to invest that sum and add, let us say, $10,000 per annum to his income stream,’ or to blow the lot on a luxury cruise. The cost of the cruise is considerable: a forgone $10,000 per annum. A marginal tax rate of 50% reduces the cost of the cruise to a forgone $5,000, for the income derived from investing $100,000 at 10% per annum is taxed at 50%. The marginal tax rate of 97% which obtained in pre-Thatcher Britain reduces the cost of the cruise to a mere $300 forgone per annum. Extravagant consumption is thus encouraged, and capital formation is discouraged. And this is disastrous, for capital formation is the sine qua non of economic growth. Jeopardize economic growth, and human beings suffer—again, particularly the poorest.
My primary claim, however, is simple. The rules defining a fascinating game with abstractions and aggregates, and the laws defining economic reality, are not identical. If the rules defining a game are applied to the real world, an invitation has been extended to retribution. And the invitation is accepted. The avenging gods, shod with wool, set about their slow and silent task.
The People’s Money
Money matters. By “money” I mean merely an economic good sought by all or nearly all members of a community and used primarily for present or future exchanges, units of the economic good “money” being exchanged for services and other goods. The discovery of money was a momentous discovery, for without it the cooperative activities of the division of labor and free exchange could not have gone beyond rudimentary forms. Indeed, if any person doubts that money matters, that person should ponder the recent obscenity that was Pol Pot’s regime in Cambodia. By abolishing money and its uses, Pol Pot and his henchmen devastated an economy and forced men and women humbly to beg from state officials what they needed to survive.
As the title of a recent volume affirms, money today, in most developed and seemingly secure nations, is in crisis.[13] Indeed I urge you to read the volume in question: Money in Crisis, edited by Barry N. Siegel. Within its pages “economists from such diverse perspectives as monetarism, Keynesianism, rational expectations, supply-side economics, and the Austrian school” proffer a variety of proposals with a single objective, namely, “to make monetary institutions strictly accountable and devoid of political and bureaucratic influences.” This cover description of the book accurately indicates the book’s contents.
In a very real sense, however, money has always been in crisis. The long history of money can be read as an ongoing war between rulers and the ruled. It is no accident that money controlled by the masses through the market was once called “the people’s money” as against money controlled by political rulers and their associates.
It is not my purpose to narrate the fascinating albeit depressing story of the battles between a “people’s” money and a “ruler’s” money. All I wish to affirm is that the laws of economics, the precepts of high morality, and the blessings of individual liberty, lead to the injunction, “Put not thy monetary trust in princes.” A people who so place their trust shall be pursued and overtaken by the avenging gods.
A Choice from the Market
How best to secure money not subject to “political and bureaucratic influences” can be debated and today is hotly debated. My own conviction is that we should, with Friedrich A. Hayek, agitate for the demonopolization of money and choose a gold currency from whatever rival cur rencies result. By a ‘gold currency,’ I mean simply coins made from gold and carrying information as to the maker and weight of the coins and notes the issuers of which must, by law, on request convert into whatever weight of gold the notes specify. While personally choosing such a currency from whatever currencies the free market makes available, I would keep an interested eye upon alternative forms of currency available. Who knows in advance what new discoveries individuals might make?
I stress this openness to alternatives simply because some advocates of the case for gold attempt to utilize for their own purposes the strategy so brilliantly deployed by Lord Keynes, namely, ridiculing the views of opponents. There is nothing objectionable in this: reductio ad absurdum is a legitimate form of argument, even when spiced with humor. What/s objectionable is the suggestion that people could not value rare pieces of paper carrying certain words, or that walking gold is “scientific” whereas valuing printed pieces of paper is “magical.” People can value anything. Of course paper money has no intrinsic value, but neither does gold. The “value” of any good is not some “thing” inhering in the good, but a relationship between an appraising mind and a good appraised.
A Reasonable Doubt
At this point, permit me a second personal aside. I am second to none in my admiration for Ludwig von Mises. I do not believe, however, that Mises is honored if his admirers fail to do what he invariably did, namely, be prepared to question any claim. Frankly, I have some worries with Mises’ “regression theorem,” at least as sometimes stated.[14] Crudely, the theorem can be understood as asserting that units of money can be exchanged for services and other economic goods if and only if what first functioned as money had a non-monetary use. It must be possible to trace back the monetary use to a non-monetary use. I see no absurdity in asserting that an extraordinarily intelligent human being could have realized that some substance all people in a community would accept in an economic exchange would serve a very useful function. I see no absurdity in asserting that this individual might specify some rare substance, hitherto regarded as utterly useless, as an ideal candidate for a currency. I see no absurdity in asserting that the case for using this substance as money might be accepted by a community. The happy coexistence of such intellectual perspicuity and such persuasive prowess in a single individual is absurdly unlikely, but it is not logically ira-possible or empirically impossible.
The point is possibly pedantic. Maybe it is sufficient to say that we are ill-advised to overstate the case for a gold currency or to assert that individuals in a money-creating-and-providing free market could not create and provide a paper money somehow protected from the cupidity of those providing it and from political and bureaucratic influences. How such could be done I know not and that such will be done I believe not. But the free market again and again has done what many said was impossible. Hence my option: the de-monopolizing of money, my own choice from whatever currencies the market provides of a gold currency, and my ongoing observation of the success or failure of non-gold currencies.
Milton Friedman’s advocacy of a constitutional amendment proscribing the arbitrary inflation of the currency by government fails to convince me. First, unless people thoroughly understand why money matters, an amendment passed today could be revoked tomorrow. Second, an acceptance of “non-arbitrary” inflation, whether under a 2% rule or a 5% rule[15] or any other rule, overlooks the effect of any inflation upon the relative prices of goods and services. Friedman’s arguments against a gold currency have, I submit, been anticipated and answered in Ludwig von Mises’ volume, On the Manipulation of Money and Credit.[16]
Money Matters
Similarly, Friedrich A. Hayek’s advocacy of the de-monopolization of money,[17] divorced from the prudential advice that one should choose from any alternatives proffered a gold currency, does not satisfy me. While not saying that competition between rival paper currencies could not discover means for securing a non-inflatable currency, I would not, and the pun is intended, bank upon such a possible discovery. During your nation’s history different states issued their own paper currencies, and these currencies, in a very real sense, competed.[18] This precedent, so to speak, does not provide grounds. for optimism.
My main point, however, is simply that money matters. If men and women entrust their nation’s monetary system to rulers who can inflate the currency, the avenging gods make ready to strike. And there is no protection from their vengeance. Advertisements promising men and women that an investment in gold will protect them “from inflation”and that should read “from the effects of inflation”—are utterly misleading. The effects of inflation are not identifiable with the decreasing purchasing power of a nation’s monetary unit. The entire communication system that is the free market in a free society is distorted by inflation, and that distortion can become so grotesque that a market economy ceases to function. There is no protection from the wool-shod, avenging gods.
Conclusion
It would be pleasant if economic reality were not as I have depicted it. But our desires must be adjusted to reality, for reality will not adjust itself to our desires.
Yet I remind you of what I said earlier. If error did not contain the consequences of error, truth could not contain the consequences of truth. Unless folly brought the consequences of folly, wisdom could not bring the consequences of wisdom. If actions defying the inexorable laws of economic reality did not end in disaster, actions complying with those laws could not result in blessing.
I remind you also of what that blessing involves. Men and women freed from the horrors of destitution. Men and women, their material needs satisfied, freed to create beauty bringing delight to their souls and to seek truth bringing joy to their minds. Men and women freed to foster and to nourish the warm and intimate relationships that make human life holy. Men and women freed to dream dreams of an even greater future and to struggle to make their dreams come true. All that, and so much more, is involved in the blessing we seek.
So maybe the avenging gods are but angels in disguise. Maybe, by visiting upon us the consequences of error and folly, they lure us back to the pathway of truth and wisdom. Maybe they wish us well, not ill. For the pathway from which we stray and to which they so insistently redirect us, is the pathway leading from a city doomed to crumble and which nothing can save to a city our forefathers in the fight for liberty founded, and which we, under God, are called upon to complete.
1. Thucydides, The Peloponnesian War, trans. Rex Warner (Harmondsworth: Penguin Books, 1972), p. 48.
2. G. Murray, Five Stages of Greek Religion (London: Watts and Co., Thinkers’ Library Edition, 1935), pp. 72-8.
4. J. Chamberlain, The Roots of Capitalism (Indianapolis: Liberty Press, 1976), pp. 39-41.
5. F.A. Hayek, 1980s Unemployment and the Unions (London: Institute of Economic Affairs, 1980), p. 28.
6. L. von Mises, “Economic Calculation in the Socialist Commonwealth,” in Collective Eco nomic Planning ed. F.A. Hayek (London: Rutledge & Kegan Paul Ltd., 1935), pp. 87-130; idem., Socialism (Indianapolis: Liberty Press, Liberty Press Edition, 1981), pp. 95-130.
7. A.N. Whitehead, Process and Reality (New York: Macmillan, 1929), p. 11; idem., Science and the Modern World (New York: Macmillan, 1929), p. 75.
8. G. Ryle, The Concept of Mind (London: Hutchinson, 1949), pp. 16-18.
9. J.K. Williams, “Redigging Old Wells,” The Freeman, June, 1985.
10. F.A. Hayek, The Counter-Revolution of Science (indianapolis: Liberty Press, second edition, 1979).
11. A.B. Laffer, “Government Exactions and Revenue Deficiencies,” Cato Journal, 1 (Number 1, Spring 1981), pp. 1-22.
12. P. Gutmann, “The Subterranean Economy,” Financial Analysts Journal (November- December, 1977), pp. 26-34.
13. B.N. Siegal, ed., Money in Crisis (San Francisco: Pacific Institute for Public Policy Re search, 1984).
14. Mises, Human Action (Chicago: Regnery, 1966), pp. 408-11, 610f.; idem., The Theory of Money and Credit (New York: The Foundation for Economic Education, 1971), pp. 97-123.
15. Friedman, The Optimum Quantity of Money (Chicago: Aldine, 1969), pp. 46-8.
16. Mises, On the Manipulation of Money and Credit (Dobbs Ferry, N.Y.: Free Market Books, 1978).
17. F. A. Hayek, Choice in Currency (London: Institute of Economic Affairs, 1976); idem., Denationalization of Money: The Argument Refined (London: Institute of Economic Affairs, second edition, 1978); idem., “The Future Monetary Unit of Value,” in Siegel, op cit., pp. 32335.
18. E. Groseclose, Money and Man (Norman: University of Oklahoma Press, 1976), pp. 18093.
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