Is There a Moral Basis for Free Markets

The basic goodness of free exchange has been ratified by success. Market economies in the modern world dramatically reduce the material poverty endemic to the human condition, battling hunger, cold, disease, and isolation. We have seen such progress in Western societies over the past five hundred years and, in recent decades, in China, India, and a host of other nations as well. By allowing individuals freedom to acquire and sell, markets tap unexplored sources of human activity and inventiveness.

A century ago, advanced opinion treated this as a one-time effect of modernization and demanded redistribution of the bounty. Now it appears that the dynamic is ongoing: global markets seem to be the most efficient way to distribute modern plenty to all places, and technology continues to develop and amaze.

Now, “If men were angels,” as James Madison wrote in The Federalist Papers, or “if angels were to govern men”—that is, if we were perfectly rational beings seeking innocent ends, or were governed by such—then the logic of the market might be sufficient to guide our social relations. But we aren’t, and government isn’t, so the morality of markets cannot rest only on the logic of voluntary exchange. For a market to be free, there has to be protection against coercion or fraud. Accordingly, defenders of free markets are rarely anarchists, but instead insist upon strict justice.

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