So, let's start with my main premise - the free market does more good than harm.
And ... The main benefit of the free market is INCENTIVES.
These reinforcements, or incentives, are at the heart of the free market system - it allows personal rewards to be offered to individuals in return for certain behaviors that are valued by others. The incentives inspire action. If I do something that the market wants, I'll get something I value in return. This simple process unlocks many powerful forces - creativity, innovation, design, production, technology, and more.
The free market is often criticised, particularly by those on the economic left of the spectrum. They would favor a system that focuses on the collective rather than the individual. That is, a socialist system. From a social perspective, this is underpinned by the ideal of treating everyone equally within a society. However laudable that goal is, from an economic standpoint, it just doesn't work.
So, to make this point clear, let's look at the most compelling chart that shows the benefit to economic systems that have moved from socialist to free market.
|Chart source: Wikipedia|
The big one of course is China, and the statistics are compelling. China is now the world's second largest economy - and all of the growth has occurred since the shift to a market economy.
Incentives drive economic activity. By and large, this is a very good thing.
Let me know what you think.