Except we've never had a free market. One of the major reasons being government intervention. And it appears that people who used to champion the free market are amongst those who now say it doesn't work.
So I was attracted to this short list of myths about the free market.
Falsehood: The free market creates scarcity and higher prices.Hat tip NCPA
Falsehood: The free market means the government gives businesses special privileges.
- Reality: In any economic system the quantity of a good will typically not be enough to satisfy demand when the price is zero. In a free market, in which people trade their legitimate claims to those resources, prices will tend to rise or fall to the level where the quantity supplied equals the quantity demanded, and in that way prices help us to cope with scarcity.
Falsehood: The free market requires that all valuable resources be privately owned and traded on markets.
- Reality: The free market is free precisely because it denies special legal privileges to any person or group.
Falsehood: The free market is pro-war.
- Reality: Sometimes the alternatives to individual ownership just work better, such as when we "exchange" favors with family, acquaintances, and sometimes with strangers without the need for formal markets and market prices.
Falsehood: The free market is always efficient.
- Reality: War and the government interventions that inevitably accompany it restrict markets and free association, make it more costly for most people to buy and sell, reduce the purchasing power of households and businesses, and disrupt the peace that is necessary for a thriving free market.
- Reality: The real world is populated by real people who don't have complete information, who may have bad information and who may just make mistakes. An "ideal" economic system is not one in which no one ever makes a mistake; it is one in which the mistakes that people inevitably make are corrected as effectively as possible.