ECON 001A Chapter Notes - Chapter 5: Totalitarianism, Monetary System
19 May 2020
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Hierarchical economies are an inefficient exercise of contract theory because any tax would alter the relevant measure costs and organizations. They are also inefficient anywhere the ruler can cut a profit, because he/she will pass laws that maximize the rulers" income and then ones that reduce transaction costs. Though inefficient, hierarchal economies will survive if more efficient organizations threaten the survival of its ruler. They are so powerful they will survive while culturing profits by literally slavery. Milton friedman, capitalism and freedom (1962)*, chapter ii: the role of government in a free society. A common objection to totalitarian societies is that they regard the end as justifying the mean (indirectly to assert the end in question is not the ultimate end) To the liberal, the appropriate means are free discussion and voluntary co- operation; any form of coercion is inappropriate. Ideal is unanimity among responsible individuals achieved on the basis of free and full discussion.
