Abstract

In real‐world markets, individual intentions cannot be brought into perfect harmony before decisions are taken. Choices made without this pre‐ordering—choices made in ignorance of one another—produce unwanted outcomes. It is this absence of coordination among plans, not centralized banking, that is the primary cause of macroeconomic market failure. Steven Hor‐witz's free‐banking alternative would aggravate the collective‐action problems inherent in economies without complete markets.