Stephen Moore, President of the Club for Growth (a political organization dedicated to government fiscal responsibility and deregulation) has a column in today's Washington Times on "Who Needs the NYSE?" His basic point, echoing Richard Baker, the Chair of the Subcommittee on Capital Markets of the House Financial Services Committee, is that the New York Stock Exchange "derives its power not from the marketplace, but from government charter."

A focus of Moore's critique is the information problem: "Perhaps the most harmful monopoly power bestowed on the NYSE is its status as an information cartel for the stock market. Brokerage firms are forced by regulation to send information . . . of great value . . . to the exchange . . . . Those same firms are then forced to buy the aggregated data stream back whem providing a stock quote . . . . This grants the NYSE an information cartel and impairs the liquidity of the stock market."

Protection of property rights and investment in databases is important to the long-term health of the economy and to simple Lockean justice. But the NYSE situation illustrates the problems when the government creates and continues ossified monopolies unrelated to real value added, monopolies that will be defended to the max with political contributions and other forms of influence.

The correct approach is to define the property rights correctly and assign them to the people doing the work -- and this in itself presents exquisitely difficult issues -- and then let the parties deal by private contract. The firms that produce the data, and their customers, should be able to bargain with the aggregators to share the value created.

This "less government action is more" approach is particularly important in a time of great uncertainty over the role of information in the economy and the society and over how information will produce value in the future. Part of the genius of F. A. Hayek was his emphasis on Competition as a Discovery Procedure, a process of learning and feedback rather than the static equilibrium of the academic blackboard.