E. Moral objections

Objection: free markets do not work

In light of the remarkable productivity of free-market economies in the last two centuries, it is somewhat surprising to us that people still raise the objection that free markets do not work. For example, even President Barack Obama, in a speech in Kansas on December 6, 2011, said:

The market will take care of everything, they tell us. . . . But here’s the problem: it doesn’t work. It has never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible postwar booms of the ’50s and ’60s. And it didn’t work when we tried it during the last decade. I mean, understand, it’s not as if we haven’t tried this theory.28

We disagree. Neither the president of the United States, the president of Venezuela, a brilliant movie producer such as Steven Spielberg, nor any of the thousands of critics of free markets before or after the 2008 financial meltdown have proposed a more decent, moral, and uplifting system. Compared to perfection, the free market is easy to criticize. Utopia is always a better idea. But compared to any real- world example ever tried in the past, its virtues of greater economic productivity, of lifting the masses from poverty, of promoting virtuous behavior, and of frequent personal benevolence are unsurpassed.

On the other side, we are reminded of the historical fact that systems other than economic freedom trample liberty, spawn totalitarian political regimes, and make a mockery of economic efficiency. Despite the evidence that socialism, in all of its manifestations, leads to government intervention in private actions and often ruthless dictatorship, the hope for a welfare state or a “third way” lives on. President Obama’s suspicions about free markets are not new, but they must be challenged. If poverty is to be overcome and the preciousness of human beings living as free moral agents is to be realized, the free-market system now being tried successfully by countries on every continent needs to be morally defended.

 
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