> I am trying to think about cultures that don't have the economic > institutions that Western countries have. > Fabio
The pure market is trans-institutional. The voluntariness of human action does not depend on any particular institutions. One can have a voluntary society in a primal or primitive hunting and gathering economy. > For example, if the people > of one nation voluntarily adopted Islamic law and did not charge > interest, voluntarily, would that be a market? Yes, if "the people" meant all the people. > Basically, I want > to get beyond "voluntary interaction" and try to think about > the institutions you need in order to have Western style markets. This is a different question than your original question of what is a market. > So if people abolish interest rates, they're abolishing one of the > key market mechanisms. It is impossible to abolish interest rates. All one can do is change who gets the interest and the form the interest payments take. If one loans funds without an explicit payment of interest, then implicitly the lender is gifting the interest to the borrower. If a bank becomes a partner in an enterprise instead of loaning it funds, then the interest is implicitly paid to the bank in the form of profits. > Although it's voluntary, it's certainly missing > something important. No, it is just a different institutional structure for obtaining the interest or shifting who receives it. Fred Foldvary ===== [EMAIL PROTECTED] __________________________________________________ Do You Yahoo!? Yahoo! Health - your guide to health and wellness http://health.yahoo.com
