The Free Market
This is an advance summary of a forthcoming article in the Oxford Research Encyclopedia of Politics. Please check back later for the full article.
Market economies outperform alternative forms of economic organization on almost every measure. Nevertheless, this leaves open the question of what is the optimal degree of government regulation and macroeconomic adjustment. Most economists seem to favor mostly, but not completely, free markets. While regulation can, in principle, correct certain market failures, whether it will do so in practice depends in part on how pervasive and damaging corresponding government failures will be.
Philosophers, unlike economists, think that questions about the value of the free market are not settled entirely by examining how well free markets function. Some philosophers, such as G. A. Cohen, think that, while markets deliver the goods, they are intrinsically unjust. In their view, markets encourage wrongful exploitation and induce people to treat each other in inhumane ways.
Among those philosophers who are more sanguine about markets, one major question is: what is the moral status of economic liberty? Some philosophers, such as John Rawls, hold that economic liberty is of purely instrumental value. Citizens should be imbued with a significant degree of economic freedom only because this turns out, empirically, to produce good distributional consequences. However, other philosophers, such as Robert Nozick and John Tomasi, argue that economic freedom is valuable, in part, for the same reasons that civil and political liberties are valuable—as a necessary means to respect citizens’ autonomy.