ABSTRACT
Finance is a crucial aspect of the third of Locke's trinity of individual freedoms—property and the right to freely own, allocate, and dispose of it. When these decisions are made without government coercion or hindrance and, as important, when information is freely available, the social product from available resources and technology is substantially greater than when the state intervenes or regularly controls the allocation of private funds. Without autonomy of financial markets, the freedom that saving and investment decisions represent—and the efficient allocation they induce—would dissipate. Under individual capitalism, the entrepreneur finances himself for short periods of time by commercial credit, while under security capitalism there is more reliance on investment credit. A financial transformation as well as a political and social one was driven by the Glorious Revolution of 1688 and its aftermath. The Jewish moneylenders developed a broad security interest in a borrower's total assets—all property both movable and immovable.
