On the Characteristics of the Free Market in a Cooperative Society

Abstract

The key characteristic of a true free market economy is that exchanges are entirely voluntary. When there is a monopoly in the creation of currency as we have in today's markets, you no longer have a true free market. Features of the current economic system such as central banking and taxation would be nonexistent in a free market. This paper examines how currency monopoly leads to the instabilities and imbalances that we see in today's economy. It also proposes that currencies should emerge from the voluntary exchange of goods and services, and studies economic interaction across all scales, by considering economic action in cases where the self-interests of individuals are coincident. By examining the voluntary exchange of goods and services at the scale of an entire society, it is shown that a new currency system, which resolves a lot of the problems caused by the current fiat currency system, emerges naturally from the free market. The new currency system is robust and efficient, and provides a way for public goods and services to be provided, and its providers compensated, without the need for direct taxation.