Stephen Monrad

In yesterday’s post, I concluded that most people like freedom even if it means they make mistakes and suffer the consequences.

Does this mean that markets are good because people are free to buy and sell whatever they want? In principle, I’d say yes. In practice, I say no.

If market economies worked reasonably well, I’d be content. The problem is that, for a lot of people, they don’t work well. Freedom in a market economy is a choice between one sort of misery as opposed to another. If you can’t find work, your freedom isn’t much use to you.

As an extreme analogy, a person stranded on an isolated island has complete freedom. Nobody is going to tell them what to do. Are they happy? Probably not. While they are free to do whatever they want, there isn’t much worth doing.

Market economies are like the island for many people. They are free to do whatever they want to do, but their opportunities are severely limited. The fundamental premise in the work I am doing is that by giving up some freedoms others can be gained. Specifically, I believe that if we give up some freedom in how prices are set, we can grow the economy to a point where people can reliably find work. Being able to reliably find work creates greater control over ones life than being able to haggle over prices.