Argument: The free market is morally superior because it operates on liberty

Liberty is one of the highest values human beings strive for. Liberty means that individuals ‘own’ themselves: individuals only decide for themselves what to do with their minds and bodies during their lifetime. Private property is an extension of this, because private property comes about by undertaking an activity with one’s own body or mind: when I pluck apples from a wild apple tree, they become my property through me using my own body to do the plucking. Similarly, free exchange is an extension of this, because it only comes about if both parties perceive the exchange to be beneficial to them: I will only sell the apples I plucked if I get more value in exchange than the value that continued possession of the apples gives me.

Free markets are the only system of allocating goods and wealth in society that relies on these basic notions of liberty to operate. If someone becomes rich in a free market, then that came about through free exchange: this person has provided so many goods and services of value to other people, that they gave him or her great wealth in return.

Compare this to the government redistributing wealth: that would require the government appropriating part of someone’s income via taxes. That income is private property. Appropriating private property, not voluntary exchange, amounts to theft, which means that taxes are a form of theft and therefore a significant harm to individual liberty. Free markets don’t harm liberty like this, which is why they are morally superior.

Candidate 1: "It’s not true that all markets naturally lead to a concentration of power. Whenever concentration of market power, even leading up to a monopoly, does happen, this is caused by the underlying cost structure of the industry, whereby a company experiences increasing returns to scale and relatively high fixed costs. This means it is most efficient for the first entrant in a market to become as big as possible, as fast as possible. An example of such a natural monopoly used to be the markets for utilities: when the distributing networks for water or energy weren’t built yet, the first company to expand would gain a natural monopoly.

Given that a natural monopoly is a consequence of the underlying cost structure of the industry, there is not much one can do to change it. Basically, one can choose between a private unregulated monopoly, private monopoly regulated by the state, and government monopoly (Capitalism and Freedom, 2002). Of these, the private monopoly is best. A government monopoly would not just be a monopoly, but would also have the force of law to back it – the result would be the most direct form of regulatory capture, where the business interest takes over the public interest of the government agency."
Candidate 2: "The procedural justice of free exchange is important, but is presumes that humans are born with equal talents and in equally enabling environments. This is obviously not true: people can be born to parents with high or low socio-economic status and the talents they are born with, like IQ, are normally distributed.

Suppose you’re born with high talents but to parents with a low socio-economic status. That means your parents do not have enough income to spend on your education: their money is all spent on the basic necessities like food and housing. Since you don’t get the education you need to further develop your talents, you will also likely remain stuck in the same socio-economic class, as will your children, and their children. At the same time, the children of rich parents get more opportunities: even when they’re moderately talented, their parents can invest in maximally developing their talents or even give them a large endowment to live from.

An example of this lack of ‘social mobility’ is the United States, where parental income is an important predictor of a child’s future (Upper Bound, 2010). This is not just a gross and unfair inequality: it is also an infringement upon the liberty of the individual, who, in a free market, is effectively and structurally constrained to develop his or her own talents."
Candidate 3: "A free market can only operate when some basic conditions have been met. One of these is the condition that exchange of private property is possible. It’s important to realize that private property is both a normative concept but also a legal reality: in everyday life, private property exists because there are contracts and title deeds that prove that something is my private property.

This legal dimension of private property is key to realizing how the government can make free markets work even for common and public goods. The key is to create private property rights that are rivalrous and excludable, and enforce them accordingly. It is these private property rights that are traded, not necessarily the good itself (The Private Production of Public Goods, 1970).

For the public good of roads, the private property right the government can create is the right to operate a toll booth on that road. For the common good of fisheries, the government can create conditional exploitation rights to private actors, and for carbon dioxide emitting industries, the government can create limited, tradable emissions rights. The most well-known example of government created private property rights is intellectual property: even though listening to music is non-rivalrous and with the internet, relatively non-excludable, the government’s enforcement of intellectual property allows a business like iTunes to survive and thrive."
Candidate 4: "It might be that under theoretical conditions, free markets match up supply and demand in the long run, but as the famous economist John Maynard Keynes said: “in the long run we are all dead”. Even if a stable equilibrium is theoretically possible, in practice, it almost never happens, with high fluctuations in price, shortages and excesses as a consequence (A Tract on Monetary Reform, 2000).

An example of a market never reaching equilibrium is the so-called, empirically observed, ‘Pork Cycle’. When prices for pork meat are high, producers flock to the market. Since it takes a while, anywhere from months to over a year, to raise pigs before slaughter, prices will continue to rise and producers continue to join – until suddenly, the new supply reaches maturity and there is a sudden excess of pork meat on the market. This excess will then last for a longer period, since many producers are ‘locked in’, waiting for their pigs to mature. The same dynamics operate in the market for skilled labour, since getting the required vocational training also takes time.

Even if equilibrium is reached, the outcome isn’t necessarily fair. An example is the Irish Great Famine: due to circumstance and bad policy, potato supply in Ireland dropped dramatically. This caused prices to rise beyond the budget of the average Irish citizen, but England could still pay the higher price. The perverse result was that even during the Great Famine, Ireland was actually still a net exporter of food (The Great Irish Famine, 1996)."
Candidate 5: "The free market doesn’t invest in fundamental research this is research to understand fundamental principles as it does not have a commercial purpose and may never result in a commercial product, ultimately, fundamental research is the key enabler of innovation. Private companies don’t invest in fundamental research, because by its nature it is open ended and very expensive and as a result may never pay back the investment.

One example is the invention of the laser: the foundations were laid by theoretical physicists like Albert Einstein. This theoretical work wasn’t done with the purpose to invent something like a laser, but to probe deeper into the fundamentals of reality. The first actual existing lasers emerged only 40 years later, and only then did corporations begin to be interested. More examples are Defense Advanced Research Projects Agency (DARPA), a military research lab, and CERN, the operator of the world’s largest particle accelerator. Between them, they serendipitously invented the key technologies of the internet, something that no one could have foreseen.

Governments have both the resources and the patience to invest in open-ended and long-term projects like this, whereas for corporations, this would have been too risky to be a sensible business decision."
Candidate 6: "The notion that labour alienates might have looked true in Marx’s days, but nowadays, employers have learnt that if they want to get the most from their workforce, they need to make their jobs meaningful. Employers can do this by offering work that fits an employee’s ‘intrinsic motivation’ (Intrinsic motivation at work, 2009), and by designing the work process in such a way that it facilitates ‘flow’ (Beyond boredom and anxiety, 2000). Interestingly, these days, companies actually compete for labour by making their work environment more meaningful, as for example Google’s ‘Life at Google’-page shows (Life at Google).

As to the idea of allowing a market in organs: if people willingly and knowingly choose to sell their organs, what is wrong with it?

Also, consider the status quo: demand is still there, but the prohibition effectively lowers supply, leading to a significant number of deaths every year for lack of donor organs. Why is that morally more justifiable?"

The procedural justice of free exchange is important, but is presumes that humans are born with equal talents and in equally enabling environments. This is obviously not true: people can be born to parents with high or low socio-economic status and the talents they are born with, like IQ, are normally distributed.

Suppose you’re born with high talents but to parents with a low socio-economic status. That means your parents do not have enough income to spend on your education: their money is all spent on the basic necessities like food and housing. Since you don’t get the education you need to further develop your talents, you will also likely remain stuck in the same socio-economic class, as will your children, and their children. At the same time, the children of rich parents get more opportunities: even when they’re moderately talented, their parents can invest in maximally developing their talents or even give them a large endowment to live from.

An example of this lack of ‘social mobility’ is the United States, where parental income is an important predictor of a child’s future (Upper Bound, 2010). This is not just a gross and unfair inequality: it is also an infringement upon the liberty of the individual, who, in a free market, is effectively and structurally constrained to develop his or her own talents.
