Author: Guest Author

If markets do a better job of meeting human needs than other principles, that is, if more people enjoy higher standards of living under markets than under socialism, it seems that the allocation mechanism under markets does a better job of meeting the criterion of need, as well. Food, certainly a more basic need than…

Market processes redistribute wealth, giving owners of assets incentives to maximize their value or to shift their assets to those who will. Political processes redistribute property, making property in general less valuable and destroying wealth. Those with the power to transfer property in the name of equality inevitably use it to benefit themselves, and the…

In the face of an unknown future, such as selecting investments, it’s wise to have a diversified portfolio. But we know that market forces work to grow the economy, and that big-government, interventionist policies don’t. It makes no sense to include these in the policy mix.

Markets provide mechanisms for adjusting levels of investment and preventing booms and busts in the business cycle. Government policies, however, often distort markets and nurture the conditions that lead to depressions and human suffering.

What needs explanation is not poverty, which is the natural state of mankind, but wealth. No system better than the free market, based on well defined and legally secure property rights and legal institutions to facilitate exchange, has ever been discovered for generating incentives for wealth creation.

As society becomes more complex, reliance on voluntary market exchange becomes more — not less — important. A complex social order requires the coordination of more information than any mind or group of minds could master.

Negative externalities such as air and water pollution are not a sign of market failure, but of government’s failure to define and defend the property rights on which markets rest.