================= HES POSTING ================= To suggest that "free banking" involves the absence of any regulatory context is of course wrong. In America, the regulatory context in New York was a well-crafted law that facilitated easy entry into banking, and hence competition, and hence innovation. Even the Suffolk system in Massachusetts relied on a disciplinary regulatory structure, though one that was largely "private" (but it is still effectively state sanctioned). All markets, even those for money and finance, are socially constructed, and in the Anglo-American experience, that has always meant a formal articulation of an initial legal framework to define property, contract, and tort. The historical record of "free banking" may have argued persuasively for the ability to devise systems that function without public central banks, but it does not suggest that banking (or any market process beyond simple commodity exchange) can function without socially defined and enforced rules. Fred C. ********************************************************************** Prof. Fred V. Carstensen Office: (860) 486-0614 Department of Economics Dept: (860) 486-3022 341 Mansfield Road FAX: (860) 486-4463 University of Connecticut Home: (860) 242-6355 Storrs, CT 06269-1063 e-mail: [log in to unmask] ********************************************************************** ============ FOOTER TO HES POSTING ============ For information, send the message "info HES" to [log in to unmask]