Sunday, August 3, 2014

A Defense of the Free Market

I've written before in defense of socialism, but that doesn't mean I'm opposed to the free market. Quite the opposite, in fact. The free market is a very powerful tool, and under the right conditions it's maximally efficient.

However, like any tool, it can be misused and abused. But that doesn't mean it should be completely banned, just that it should be used in a carefully controlled manner. There are those who think that regulating a market makes it non-free, but they're wrong. Regulations can help establish the conditions a free market needs to work efficiently.

One of the best uses for the free market is the production of luxuries, for example, video games. They're not a necessity, like medical care, so no will die if they can't afford them. They're not a natural monopoly, like electrical transmission, so lots of people can make them and drive competition. They don't have significant externalities, like pollution, so the costs and benefits are primarily borne by the buyers and sellers. And the free market environment is great for the spurring greater innovation and variety.

That is exactly the kind of thing for which the free market should be used.

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