Charity Needs Markets

by Jörg Guido Hülsmann

Even if everyone were totally charitable, we still could not build a complex economy without the price mechanism provided by markets.

Although it is sometimes imagined that a world based on gift-giving rather than market exchange would be a world without scarcity or want, we are still left with the problem of manufacturing and producing complex goods that require markets to allocate resources.

Moreover, if we remember that the act of gift-giving requires both the giver and the recipient to agree to the exchange, we quickly find that the situation is more complex than we initially thought.

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