There are many factors which explain the origin and existence of institutions. One such factor refers to controversial human nature and also to the idea that each individual is a sum of pluses and minuses, of challenges and opportunities. Additionally, it is well-known that due to human nature, a strong negative tendency at the personal level cannot be neglected. Is there a solution to the undesired negativity which is within us? Adam Smith found it! It is the free market. Mises, Hayek, Kirzner, Buchanan, Hazlitt and others offer similar explanations; as well as all advocates of new institutionalism. The paper discusses the non-institutional contribution to this issue.

institution, market, human nature, division of labour.