Truly Free Market Capitalism

October 17, 2013

Sankarshan Acharya
Pro-Prosperity.Com and Citizens for Development

The crux of modern shenanigans to get rich indolently (without risk) is to usurp a lion share of the fiat money - collected as taxes or created by the central bank or borrowed by the government - and lend the same at usurious rates of interest to those deprived by such systemic shenanigans.  The academy of finance and economics has been selling such shenanigans as "free market capitalism" necessary for prosperity and stability of humanity. 

Adam Smith's Wealth of Nations (1776) has laid the foundation for "free market capitalism."  This foundation has been buttressed recently by Gary Gorton, a professor at Yale School of Management, through his book on Slap of Invisible Hands (god) published by the Oxford University Press.  This book corroborates Adam Smith to paint financial catastrophes like the Great Depression and the Great Recession as acts of god.  Such tomes have been eulogized by the guardians of free market capitalism, known as the Masters of the Universe, the government regulators and academic experts of economics and finance. 

The guardians of free market capitalism testified before the Financial Crisis Inquiry Commission set up by the US Congress that no one saw the 2008 Great Recession coming and that it was an act of god. The Federal Reserve Board has considered the Great Recession as worse than the Great Depression. 

I had promptly sent rejoinders to the FCIC about the myth behind the testimonies of the guardians of free market capitalism, by citing reference to all my communication with the US Congress since 2003 and to my research on first-best efficient governance since 1991 designed to preemptively avert a looming financial crisis brewing within the economy under the veneer of economic growth statistics.  My rejoinders to the FCIC factually established how the experts and guardians of free market capitalism had blocked publication of such research in the journals they controlled to perpetuate the established system of usurpation. 

The FCIC 'found' that the experts of free market capitalism failed and their failure caused a manmade (avoidable) crisis.  (See the FCIC Report released in January 2011 through Google search.)

Research on first-best efficient governance shows that the free market shenanigans are unstable, economically inefficient (causing downfall of society in long run) and constitutionally unfair.  This is discoursed in a compendium entitled, "Constitutional Capitalism" and is in a paper "Constitutional System of Money and Finance," published in the Journal of Financial Transformation. 

This note is focused on the myth behind the extant theory of banking under free market capitalim, modeled academically as a “free market economy.” The academic model of a "free market economy" ironically allows coalition of creditors, but not of borrowers.

How can the theoretical economic environment be free when the users of credit (borrowers) are not allowed to exist (i.e., suppressed from a model of the free market economy)? 

Academic research may not have modeled a truly free market economy. But basing national economic policies on such research by tacitly suppressing the fundamental elements of a truly free market economy is inconsistent with the American founding fathers' dream for truly free market capitalism.

The price of credit 'set' unilaterally by the creditors (or their representative banks and central banks) - according to the existing free market economic theory of banking, propagated by the modern academy as free market capitalism - cannot maintain an equilibrium (stability) or be constitutionally fair. 

In a truly free market economy, the price of credit (interest rate) is supposed to be determined in equilibrium between suppliers and users of credit. 

New research entitled, "Coalition of Borrowers, Government-Regulated Lender, Interest Rate and Safe Central Bank in Equilibrium," restores constitutional fairness and users an era of constitutional capitalism in a truly free market economy needed for prosperity amid stability

I look forward to having your feedback, comments and critique of the new research.   

With best regards,

Sankarshan Acharya
Founder, Pro-Prosperity.Com and Citizens for Development