The Fed's money and banking policy of fixing interest rates below the inflation rate risks the global financial system's continued resilience. The system of efficiently allocating capital is called capitalism. Capitalism, with globalization, emerged through the international financial system, from Renaissance Italy to nineteenth-century Britain and into the modern era.

Global capitalism is a vital part of free trade. Adam Smith's Wealth of Nations (1904 [1776]) advocated free trade in goods and in capital. The British colony that was the precursor to the United States was well aware of the limits to trade through taxation of the markets engaged in trade. The 1776 Declaration of Independence coincides with Smith's 1776 statement of efficient allocation through free trade.

The US Constitution sufficiently innovated on England's Magna Carta to enshrine free trade in social, economic and political spheres, making the United States the centre of world democracy, freedom and capitalism. Milton Friedman's Capitalism and Freedom stresses these interconnections, with “economic freedom as a means to political freedom” (Friedman 1962: 8), whereas “capitalism is a necessary condition for political freedom” (1962: 10).

Adam Smith, as a student and then professor at the University of Glasgow in Scotland, essentially invented modern economics. A professor of moral philosophy at Glasgow, starting in 1752, Smith wrote a triad of treatises on free culture, law and economics, respectively.

The first book, published in 1759, followed the theme of his chair, The Theory of Moral Sentiments (Smith 1853 [1759]). This landmark achievement sets out how an equilibrium culture of norms arises through free social interaction and exchange. The treatise takes as given the legal and economic environment in which social norms flourish.

Smith next published, in 1763, his Lectures on Justice, Police, Revenue and Arms (Smith 1896 [1763]). This second treatise describes how the social and economic setting induces a demand and supply for law that results in legal equilibrium, provides the enforcement of property rights and creates the foundations for free social and economic exchange.

Smith's last treatise, published in 1776, was An Inquiry into the Nature and Causes of the Wealth of Nations (Smith 1904 [1776]), commonly known simply as The Wealth of Nations.