Length: 435 Words Reading Time: 2 Minutes
The free market system is alive and well. All reports of its premature death or its relevance for the 21st Century are well off the mark. Let me explain.
The free market system is a simple and straightforward concept. Let’s use a simple example to show how it works. The free market allows a Baker to sell, say, a dozen doughnuts to a Customer for a price posted on a menu board. Both sides of the transaction gain. The baker receives money for his artisan product, and the customer has a dozen doughnuts for his or her family. Even in its basic form, the free market system is profound in its outcome for both parties. Multiply these kinds of transactions by billions and trillions of times, and you have the greatness of the free market system. No coercion occurs, and choices are made freely by everyone. Choices, voluntarily made, is the essential core of the free market system.
Societies create laws to protect both sides of these transactions, depending on their complexity. The State (that is, the Government) is empowered by the people to undertake this role on behalf of all individuals who are parties to such commercial transactions.
The free market is easy to understand because every business, small and large, is about contributing to the success of our society. These businesses act in their own self-interest and, as a result, they create goods and services that add value to our lives, and they create jobs for people. People can develop, thrive, and prosper. There is no other system that offers such an elegant prescription for success. The Welfare State does not compare in the least, and certainly, Socialism or Communism are tragically flawed and go counter to the principles of life, liberty, and property. The latter are embedded in the very essence of the free market.
Only when the Government intervenes is there a cause for alarm. Governments have the best of intentions and want to do good (at least we hope that is their mindset), but they fall short of the mark because human nature is what it is and the government turns the incentives upside down for the benefit of the few. Special interests lobby for special treatment and, consequently, crony capitalism displaces the free market system, and problems multiply at all levels of business. Governments, at the State and Federal level, have a role to play but it is not in pandering to the crony capitalists.
I believe that the free market will continue to work its magic if the government gets out of the way. It is that simple.
