Pat Gunning asked:
> how prominent economists have used the
> term fallacy. What have they regarded as fallacies?
"Why protection retains such popular strength in
spite of all exposures of its fallacies" (p. v)
Henry George, Protection or Free Trade, 1883.
The concept of the pure free market, and the fallacy
that trade barriers are beneficial, goes back at least
to the Physiocrats, who espoused laissez faire. To
them, free trade required the abolition of taxation
other than the impot unique, a tax on the "net
product" which we today call the "economic rent" of
land.
Henry George added a moral dimension to the concept of
a free market, arguing that not only does the taxation
of wages and other interventions have an excess
burden, but that it is morally wrong to tax labor and
otherwise interfere with free trade.
I suspect today's libertarian opposition to taxation
originates with Henry George's works, even while
ironically today's libertarians are mostly opposed to
his ideas.
Previous 19th-century anarchists such as Lysander
Spooner had moral arguments against imposed
government. But their economic arguments were limited
in not confronting the land issue. Spooner, hower,
did use England as an example of a realm that was
financed from land rents.
Thus, the concept of the pure free market, and the
corollary, the fallacy of market failure, and its
relationship to the land issue, does indeed invoke the
history of economic thought.
Fred Foldvary
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