culture of a society for free market economies to function effectively. in capitalist societies, and especially under british common law and its derivatives, the moral validity of property rights is accepted, or at least acquiesced in, by virtually the whole of the population. [UNK] accordingly, a negligible proportion of commercial contracts has to be adjudicated through the courts. if it were otherwise, the system could not function. most other rights that we americans and others cherish - - protection against extralegal violence or intimidation by the state, confiscation of property without due process, as well as freedom of speech and of the press, and an absence of discrimination - - are all essential to a fully effective, functioning market system. indeed a list or bill of rights enforced by an impartial judiciary is, and i hesitate to use the analogy, what substitutes for the central planning function as the guiding mechanism of a free market economy. it is these “ rights ” that enable the value judgements of millions of consumers to be converted through a legally protected free market into prices of products and financial instruments ; and it is, of course, these market prices that substitute for the state orders of the centrally planned economies. the increasing recognition of a rule of law and its associated rights as being indispensable to an effective functioning market system, is pressuring political leaders to a greater acceptance of that framework. economic necessity appears to be functioning, but not in the way karl marx contemplated. the broad acceptance of market economics - - and the political rights associated with it - - is impressive. clearly, not all states protect the right of private property with the same fervor. indeed, they vary widely. nor is it the case that all societies with firmly protected property rights bend invariably to the majority will of the populace on all public issues. but the pressures to meld democracy and property rights appear persistent. centrally planned economies tend to be frozen in time. they cannot readily accommodate innovation, new ideas, new products, and altered specifications. in sharp contrast, market economies are driven by what professor joseph schumpeter, a number of decades ago, called “ creative destruction ”. by this he meant newer ways of doing things, newer products, and novel engineering and architectural insights that induce the continuous obsolescence and retirement of factories and equipment and a reshuffling of workers to new and different activities. market economies in that sense are continuously renewing themselves. innovation, risk - taking,

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