Editing Free market (section)

=== Georgism ===
{{main|Georgism}}
For classical economists such as [[Adam Smith]], the term free market refers to a market free from all forms of economic privilege, monopolies and artificial scarcities.<ref name="Popper 1994"/> They say this implies that [[economic rent]]s, which they describe as profits generated from a lack of [[perfect competition]], must be reduced or eliminated as much as possible through free competition.

Economic theory suggests the returns to [[land]] and other [[natural resource]]s are economic rents that cannot be reduced in such a way because of their perfect inelastic supply.<ref>[[Adam Smith]], ''[[The Wealth of Nations]]'' [[s:The Wealth of Nations/Book V/Chapter 2|Book V, Chapter 2]], Part 2, Article I: Taxes upon the Rent of Houses.</ref> Some economic thinkers emphasize the need to share those rents as an essential requirement for a well functioning market. It is suggested this would both eliminate the need for regular taxes that have a negative effect on trade (see [[deadweight loss]]) as well as release land and resources that are speculated upon or monopolised, two features that improve the competition and free market mechanisms. [[Winston Churchill]] supported this view by the following statement: "Land is the mother of all monopoly".<ref>House Of Commons May 4th; King's Theatre, Edinburgh, July 17</ref> The American economist and social philosopher [[Henry George]], the most famous proponent of this thesis, wanted to accomplish this through a high [[land value tax]] that replaces all other taxes.<ref>Backhaus, "Henry George's Ingenious Tax," pp. 453–458.</ref> Followers of his ideas are often called [[Georgism|Georgists]] or geoists and [[Geolibertarianism|geolibertarians]].

[[Léon Walras]], one of the founders of the [[neoclassical economics]] who helped formulate the [[general equilibrium theory]], had a very similar view. He argued that free competition could only be realized under conditions of state ownership of natural resources and land. Additionally, income taxes could be eliminated because the state would receive income to finance public services through owning such resources and enterprises.<ref>{{cite book |last= Bockman|first= Johanna |title= Markets in the name of Socialism: The Left-Wing origins of Neoliberalism|publisher= Stanford University Press|year= 2011|isbn= 978-0804775663|page = 21|quote= For Walras, socialism would provide the necessary institutions for free competition and social justice. Socialism, in Walras's view, entailed state ownership of land and natural resources and the abolition of income taxes. As owner of land and natural resources, the state could then lease these resources to many individuals and groups which would eliminate monopolies and thus enable free competition. The leasing of land and natural resources would also provide enough state revenue to make income taxes unnecessary, allowing a worker to invest his savings and become 'an owner or capitalist at the same time that he remains a worker.}}</ref>