"A depression is a large-scale decline in production and trade...
there is nothing in the nature of a free-market economy to cause such an event."
by:
Nathaniel Branden
(1930- ) Canadian psychotherapist, writer
Source:
essay "Common Fallacies About Capitalism"
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Reader comments about this quote:
Ahh yes, but just one of the reasons the central bank with its funny money was created.
 -- Mike, Norwalk     
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    Depressions don't just happen, they are caused and the wrong people are always blamed by the politicians.
     -- jim k, austin     
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    1929, wonder how that happened? Lack of money supply maybe.
     -- Anon     
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    Mr. Barnden would do better to offer his psychotherapy services to some of the contributors to this site. As a shrink why does he not say something about things like confidence, irrational market exuberance etcetera, Of course there are things in a free market economy to cause people to stop or change there consumption and related production activity. What a stupid quote is this. Mass communications, runs on banks, fear, can effect peoples activity nation and world wide over night.
     -- Waffler, Smith, Arkansas     
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    When a money supply can be expanded and contracted at will, booms and busts are inevitable. Note that after each bust, the same old banking giants gobble up the other guys. Not only is this not an accident, it is working according to plan. Before fiat currency, every bank certificate was backed by gold or silver -- if there was a 'run' on a bank, every depositor could get his money. I believe it is Waffler that could use some psychotherapy -- or at least a lobotomy.
     -- E Archer, NYC     
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    Recently I heard none other than Robert Kennedy, Jr. say on national television, "There is no such thing as a free market, the free market is a myth." In economics they talk about the decision making of the economic man, this is a man with all knowledge of the economy and his options. Such a man does not exist in reality and maybe Kennedy is correct about the free market being a myth also, thus Mr. Branden's quote is null and void.
     -- Waffler, Smith, Arkansas     
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    You are using Robert Kennedy JR to void the concept of a Free Market?! Can I counter with, oh, let's say, Adam Smith. There may not be a pure Free Market. But this is because Government from the beginning of time have seen all the commerce and wealth that flow thru the markets, and have always, greedily, interfered with taxes, licenses, levies, duties, fines, etc, in order to grab a piece of it, thereby distorting the free market.
     -- Chris, Rougemont     
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    Chris, right on. You nailed it.
     -- jim k, austin     
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    Good response Chris, I appreciat it. I was shocked by Kennedy's remark also because we use the term "Free market" so flippantly but maybe it has never been free. Societies form and come together for mutual benefit, security and survival. They plan and institute systems and methodologies to reach that end. Thus Joesph was given the Prime Minister job of Egypt because of his plan to save crops for seven years to protect against famine. Our country does not operate with a free market. It was discovered and founded by companies granted the priviledge by the English Crown, the populated colonies were governed, controlled and taxed by the King. The new government in Washington established political,social, and commercial mechanisms for the new nation to operate under law. Government federal, state, and local constanly encourage, enhance and control enterprise, and markets. So maybe the term "free market" needs to be looked at a little deeper and more circumspectly. Your counter of Adam Smith and his invisible hand is good but I think it must include society or groups of individuals in the society as actors in that invisible activity. A centally planned economy as we know has proved to be a disaster, just like a supply side trickle down economy. A demand and bottom up economy where the market listens to individuals and society would appear to be best.
     -- Waffler, Smith, Arkansas     
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    Trade can only occur when it's equitable
     -- RBESRQ     
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