chapter  29
5 Pages


Economic inquiry has long been concerned with the origin of such social institutions. The earlier, naïve explanation that regarded them as institutions of the State, or as dependent on a social contract, now has few adherents. Money, for example, existed before the state and, as world-money, is today more extensive than the state. How could any general contractual agreement be reached as to institutions whose being is still hidden in the mists of the future, and is only conceived in an incomplete manner by a few far-seeing persons, while the great mass can never clearly appreciate the nature of such an institution until it has actually attained its full form and is generally operative? Also the mere contract into which one freely enters, and from which one may freely withdraw, could never establish

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the binding, compelling power that characterizes all true social institutions.