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About that concept of a "free lunch"

Economic Perspectives from Kansas City:

Chicago School practitioners of free-market mathematics crow that "there is no such thing as a free lunch," distracting attention from economic reality by dropping the history of economic thought and economic history itself from the curriculum. The very idea that there is such a thing as a free lunch is deemed heretical. This idea now governs academic departments and monopolizes the most prestigious economic journals, without publication in which it is difficult for junior faculty ever to rise to tenured positions in their universities. The aim is to censor the perception that today's economy is all about getting a free lunch by obtaining legal privileges, as exemplified by the recent U.S. health care HMOs, the bailouts over banks deemed "too big to fail" and other beneficiaries of government largesse.

Most wealth through the ages has come from privatizing the public domain. Europe's landed aristocracy descended from the Viking invaders who seized the Commons and levied groundrent. What is not taken physically from the public domain is taken by legal rights: HMO privileges, banking privileges, the rezoning of land, monopoly rights, patent rights everything that falls under the character of economic rent accruing to special privilege, most recently notorious in the post-Soviet kleptocracies, and earlier in the regions of the world colonized by Europe. (The word "privilege" derives from the Latin, meaning "private law," legis.) These bodies of privilege are what make national economies different from each other. ...

For classical and Progressive Era economists, the word "reform" meant taxing economic rent or minimizing it. Today it means giving away public enterprise to kleptocrats and political insiders, or simply for indebted governments to conduct a pre-bankruptcy sale of the public domain to buyers (who in turn buy on credit, subtracting their interest payments from their taxable income). The global economy is being "financialized," not industrialized in the way that most economic futurists anticipated would be the case a century ago. ....

Financial analysis turned away from viewing interest as a form of economic rent income achieved without a cost of production.

It's all about the rents, baby!

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