Every imaginable way to organize society has its strengths and flaws. Free markets are the same, but we don't often hear enough about some of its benefits. Here are six worth thinking about:
1. Fostering the Arts
The arts and the free market are mistakenly thought to be at odds, because many artists don't like the idea of a profit motive. The idea that capitalism and globalization destroy indigenous cultures is also widespread. But economist Tyler Cowen argues the profit motive pushes artists to produce great works and that the mixing of cultures in globalization has resulted in some of our richest works of art.
And KickStarter is now raising more money for artists than the National Endowment for the Arts.
2. Supporting Peace
You've probably heard of Democratic peace theory, The argument that the characteristics of democracies make them much less likely to attack each other than other types of states. Columbia University political scientist Erik Gartzke argues we should speak of "capitalist peace" because economic freedom not democracy is what promotes peace. While causation is hard to prove from correlation, it makes sense that countries which have a great deal of foreign trade and immigration and where citizens have a lot to lose personally economically from war would be less likely to start wars.
3. Encouraging Meritocracy
The "market" is far from perfect but it does seek to put inputs in places where they are most valuable. It makes an economic virture out of hiring and rewarding people based on their ability to make money for you rather than on superficial qualities. The market punishes someone who doesn't want to hire minorities and allows for many to have opportunities to advance.
4. Keeping a Check on the Government
The success of progressive Scandinavian countries may have partially proven wrong Hayek's popular argument that increasing the size of government necessarily leads to oppression. But the big, totalitarian state is still a scary possibility especially given modern technology.
Free market solutions like Bitcoin can limit how oppressive the government. Where the free market provides choices and alternatives, it ensures that too much power is not concentrated in the state.
5. Encouraging Prosperity
Free markets make countries richer. The hundreds of millions of people lifted out of poverty by China's economic liberalization may be the simplest example. In the short run free markets can hurt some people more than protectionist policies would. But think about the long term. If two nations start at the same point and one has 2% economic growth while other has 5%, after 20 years the first country's economy will be 1.5 times larger while latter's will be 2.7 times larger. Increasing the rate of growth even slightly, even if it comes at the cost of higher inequlality or bad times for certain industries, makes a huge difference in wealth in the long run.
When laws change so you don't have to go to an accredited barber school to cut hair and can work for whatever price you negotiate, leftists point out that workers are still not "free." But I think we can agree there's something inherently good about people being able to make choices for themselves and exchange their labor and goods however they see best.