Defending the Free Market

1. Economic Freedom is Essential for All Freedoms

Lose your economic freedom, and soon enough you will lose your other freedoms as well.

Interconnectedness of Freedoms. Economic liberty isn't just about money; it's the bedrock upon which other freedoms—like speech, religion, and assembly—are built. When the state controls the economy, it inevitably encroaches on other areas of life. History shows that societies that suppress economic freedom also tend to suppress personal and political freedoms.

• The Soviet Union's constitution guaranteed freedom of speech, but in practice, dissent was brutally suppressed.
• The Obama administration's contraception mandate showed how government control over healthcare can infringe on religious freedom.
• Economic dependence on the state makes individuals vulnerable to political control.

Hayek's Road to Serfdom. As Friedrich Hayek warned, the pursuit of economic equality and security through government control often leads to the loss of fundamental liberties. People don't intend to trade away their freedoms, but the result is always the same: a slide into serfdom. The lesson is clear: economic freedom is not just about wealth; it's about the very essence of human liberty.

The American Experiment. The American Founders understood this connection, emphasizing that the constitutional republic they formed was "made only for a moral and religious people." They understood that freedom is not just about limiting government power, but also about fostering a culture of personal responsibility and economic independence.

2. Private Property Rights are Human Rights

Property rights are personal rights.

More Than Just Things. Property isn't just about physical objects; it's a relationship between a person and a thing or idea. It's about the ability to create, control, and benefit from one's labor and ingenuity. When people aren't secure in their property rights, they're not secure in their human rights.

• If a farmer doesn't own the land he farms, he has no means to provide for himself.
• If an entrepreneur can't own the business he creates, he has no incentive to innovate.
• If a writer can't own the words she writes, she has no freedom of expression.

Foundation of a Free Society. Private property rights are essential for a free and prosperous society. They provide a foundation for individual autonomy, economic growth, and the rule of law. When property rights are respected, people are more likely to invest, create, and contribute to the common good.

• History shows that societies with strong property rights tend to flourish.
• Societies that attack property rights tend to wither.
• The Pilgrims' experiment with communal property led to starvation and near extinction.

Not Absolute, But Sacred. The right to private property is not absolute, but it is sacred because it is so closely tied to human dignity and creativity. It is a right that is recognized, not granted, by the government. The best thing that politicians can do is to protect people from having their belongings unjustly confiscated.

3. Businesses, Not Charity, Are the Best Anti-Poverty Program

The normal way people rise out of poverty is through enterprise and markets—through ordinary business.

The Power of Enterprise. The most effective way to lift people out of poverty is not through charity or government aid, but through the creation of jobs and opportunities through business. The past 200 years have seen billions of people rise out of poverty, not because of handouts, but because of the dynamism of the market economy.

• Where people are free to pursue enterprise, economies develop and people prosper.
• Where economic freedom is absent, poverty persists.
• The contrast between North and South Korea illustrates this point starkly.

Beyond Material Needs. The poor are not just mouths to feed; they are creative beings with talents and capacities. When we see them only as a locus of material needs, we miss their potential to contribute to society. The best way to help the poor is to empower them to create wealth, not just to receive it.

• The question should not be "What causes poverty?" but "What causes wealth?"
• Jobs are the best anti-poverty program.
• Entrepreneurs are the key to unlocking the potential of the poor.

The Fallacy of the Fixed Pie. The idea that the economy is a zero-sum game, where one person's gain is another's loss, is false. Markets are dynamic; they grow. Entrepreneurs create new wealth, expanding the pie for everyone. The market is a "win-win" proposition, providing incentives for people to serve each other.

4. "Creative Destruction" is Actually Creative Flourishing

Creative destruction is seen in layoffs, downsizing, the obsolescence of firms, and, sometimes, serious injury to the communities that depend on them. It looks horrible... But think of the alternative.

The Inevitable Process. "Creative destruction" is the process by which old skills, companies, and industries are replaced by new ones. It can be painful for those who are displaced, but it is essential for economic progress and innovation.

• The transition from horse-drawn carriages to automobiles was painful for farriers and saddle makers, but it led to a more efficient and productive transportation system.
• Technological advances do not destroy workers; they place them in new and more productive roles.
• The alternative to creative destruction is stagnation and decline.

The Importance of Adaptation. While we must assist those who are hurt by economic transitions, we must not try to prevent change. The government should not prop up obsolete industries or businesses. Instead, it should create an environment where people can adapt, retrain, and find new opportunities.

• Employers can ease the transition by managing change humanely.
• Workers can be encouraged and assisted to retrain.
• Charitable institutions can play an important role in helping those who are displaced.

Progress Requires Change. To resist creative destruction is to replace it with a slow destruction without creativity. The perfectly "safe" economy is the economy where nothing and no one face challenges and growth, but such an economy is not really safe at all because it is not a living, thriving economy.

5. Greed is Not Good, and Socialism Breeds More of It

Under socialism, greed’s primary outlet is exploitation—legal or illegal.

Greed Defined. Greed is not simply the desire for material things; it's an unbalanced, inordinate craving for what we do not have, without regard for others. It's a vice that can manifest in many forms, not just in the pursuit of wealth.

• Greed is not the same as ambition or the desire to improve one's life.
• Greed is a moral failing, not an economic necessity.
• Greed exists in every economic system, but some systems are more likely to encourage it.

Capitalism Channels Greed. Capitalism doesn't require greed, but it can channel it toward socially useful ends. A greedy person in a free market can get rich by creating value for others. Under socialism, the greedy person has fewer options: they can become a thief or a corrupt government insider.

• In a free market, the most efficient way for a greedy person to pursue wealth is to serve others.
• Socialism removes the brakes on selfishness that a capitalist system provides.
• The Soviet Union's lack of a profit motive led to indifference to consumer needs.

The Socialist Mirage. Socialism promises a more just and equitable society, but it often leads to the opposite: the decline of civil society and an increase in alienation. The elimination of the profit motive does not diminish selfishness; it removes the brakes on selfishness that a capitalist system provides.

6. Equality of Dignity, Not Sameness, is the Goal

All people are inherently equal in their rights and dignity. But the attempt to create perfect equality in everything (which is really the pursuit of sameness) is bound to fail.

Inherent Equality. All human beings are created equal in dignity and rights. This means that everyone deserves to be treated with respect and fairness, regardless of their background, social status, or economic condition.

• This equality is not based on material possessions or social standing.
• It is based on our shared humanity and our creation in the image of God.
• The Declaration of Independence articulates this principle well.

The Danger of Sameness. The attempt to create perfect equality in everything—to make everyone the same—is not only impossible but also dangerous. It leads to the suppression of individual differences, the erosion of freedom, and the concentration of power in the hands of the state.

• The pursuit of equality of outcome often leads to treating people unfairly.
• It undermines the incentive to work, create, and innovate.
• It leads to a society where everyone is equally poor and oppressed.

Focus on the Floor, Not the Ceiling. The real moral problem is not the gap between the rich and the poor, but the fact that some people lack the basic necessities of life. The focus should be on raising the floor, not lowering the ceiling. We should strive to create a society where everyone has the opportunity to flourish, not a society where everyone is the same.

7. Smart Charity Empowers; Welfare Enslaves

The displacement of charity by welfare has left people’s most fundamental moral and spiritual needs unmet—and in the process actually perpetuated material poverty.

The Limits of Government. Government welfare programs, while often well-intentioned, are not an adequate substitute for private charity. They tend to be impersonal, bureaucratic, and ineffective at addressing the root causes of poverty.

• Government programs often create dependency rather than empowerment.
• They can undermine the family and other mediating institutions.
• They often fail to address the moral and spiritual dimensions of poverty.

The Power of Personal Charity. Private charity, on the other hand, is more personal, flexible, and effective at meeting individual needs. It is rooted in love and compassion, and it seeks to empower people to help themselves.

• Charity is not just about giving money; it's about building relationships.
• It's about seeing the poor as people with dignity and potential.
• It's about helping them to become self-sufficient.

The Samaritan's Dilemma. The parable of the Good Samaritan illustrates the importance of personal involvement in helping those in need. The Samaritan didn't just throw money at the problem; he stopped, cared for the injured man, and made sure he was taken care of. True charity is about more than just giving; it's about loving our neighbor as ourselves.

8. Free Markets, Not Government, are the Key to Health

Most of the problems in the American health care system stem from government intervention, not from market failure.

The Illusion of Government Control. The idea that government can solve the problems of health care is a dangerous illusion. Government intervention in the health care system has led to higher costs, lower quality, and less innovation.

• The U.S. health care system is not a free market; it's a heavily regulated and subsidized system.
• Government involvement has created a separation between the payer and the consumer, leading to a lack of price transparency and cost control.
• Obamacare has only exacerbated these problems.

The Power of Competition. The key to a better health care system is to unleash the power of competition and consumer choice. When people are free to choose their own doctors, insurance plans, and treatments, prices will come down and quality will improve.

• Competition drives innovation and efficiency.
• It empowers consumers to make informed decisions.
• It creates incentives for providers to offer better services at lower prices.

Beyond the Market. While the market is essential for a functioning health care system, it is not enough. We also need a culture of compassion and a commitment to serving the vulnerable. The most profound care lies beyond the government and the market—in the realm of personal relationship and love.

9. Environmental Stewardship Requires Ownership, Not Control

An ownership society is a stewardship society where human creativity that holds the key to meeting environmental challenges is encouraged.

The Biblical Mandate. The Christian view of the environment is not one of exploitation or indifference, but of stewardship. Human beings are called to care for the earth as God's viceroys, using their creativity and ingenuity to protect and enhance it.

• The Bible does not teach that man is in conflict with nature.
• It teaches that man is a steward of creation, responsible for its care.
• This stewardship is not just about preserving nature; it's about using it wisely for the benefit of all.

The Tragedy of the Commons. Many environmental problems can be traced to ill-defined or poorly enforced property rights. When no one owns a resource, everyone has an incentive to exploit it. Private ownership, on the other hand, creates incentives for responsible stewardship.

• The tragedy of the commons is a major cause of environmental degradation.
• Private property is the best preserver of creation.
• The market economy, with its price signals, is a powerful tool for conservation.

Human Creativity is Key. Human beings are not a threat to the environment; they are the key to solving environmental problems. By unleashing human creativity and innovation, we can find new ways to protect the planet and meet the needs of a growing population. The solution is not to limit human activity, but to channel it in a more responsible and sustainable direction.

10. A Sound Theology is the Foundation of a Free Economy

How we answer the big questions—Who am I? Why am I here? Where did I come from? Where am I going? What is man?—has an enormous impact on every facet of our lives, including how we work and buy and sell...

Beyond Homo Economicus. Economics at its most fundamental level is not about money; it's about human action. How we understand the human person—our anthropology—has a profound impact on how we organize our societies and economies.

• Homo economicus, the purely self-interested actor, is a useful abstraction, but it is not a complete picture of human nature.
• Human beings are motivated by more than just material self-interest.
• They are also motivated by love, compassion, and a desire for meaning and purpose.

The Importance of Truth. Freedom is not an end in itself; it is a means to an end. The ultimate aim of freedom is the truth, and the Truth. Without a shared understanding of truth, freedom becomes rudderless and can easily be abused.

• A sound theology provides a foundation for a free and virtuous society.
• It reminds us of our limits and our ultimate destiny.
• It provides a moral compass to guide our actions.

The Incarnation and Work. The Christian doctrine of the Incarnation—that God became man—elevates the dignity of human labor and provides a theological basis for the market economy. It teaches us that ordinary work is not just a means to an end; it is a way to participate in God's creative work in the world. The pursuit of excellence in any legitimate occupation is a way to encounter the whole truth of the universe.

Last updated: January 19, 2025