The Social Market, Institutions, and Pre-Conditions

As Richard Epstein, a scholar of law and economics, observed: “The study of institutions is always a search for the most tolerable imperfections.” Markets need frameworks and rules, and some entity or person to enforce them. Government typically makes and enforces the rules. But what is the legitimate scope and functions of government in this area? And how does the answer to this question impact the effective allocation of scarce resources? When the proper institutions, practices, and virtues are in place the invisible hand works to the benefit of all. Wealth is created and reason, peace, and freedom flourish. Part two will focus on those essential factors.