I. A better solution: the free-market system

The final economic system to consider is a free-market system. A free- market system is one in which economic production and consumption are determined by the free choices of individuals rather than governments, and this process is grounded in private ownership of the means of production. In very simple, practical terms, a free-market system means that people, not the government, own the farms, businesses, and properties in a nation (“the means of production”).

“Fundamentally,” says Nobel laureate Milton Friedman, “there are only two ways of co-ordinating the economic activities of millions. One is central direction involving the use of coercion—the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals—the technique of the market place.”[1]

We describe such a free-market system in the next chapter.

  • [1] Milton Friedman, Capitalism and Freedom: A Leading Economists View on the Proper Role of CompetitiveCapitalism (Chicago: University of Chicago Press, 1962), 13.
 
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