We are hearing the cry more frequently that the free market system doesn’t work and the critics point to all the injustices and inequities they can find to prove their point. However, to make that claim they have to ignore how the free market system works.
A grandfather clock looks beautiful on the outside but the way it works on the inside is a result of engineering precision. At the top is found the clock itself and in the lower half is located the pendulum that swings gracefully back and forth but it is the swinging of the pendulum that makes the clock keep accurate time. If we were to stop the pendulum from swinging, the clock would not work.
The free market system works on the same principle. Like the grandfather clock, it too has its swings, except, instead of going from side to side, it goes up and down. Sometimes the market is up and sometimes it is down, financially speaking, but, instead of that being a bad thing, it is necessary because that’s what keeps the gears of an economy moving. If this swinging action didn’t take place the free market would not work properly and that would cause our economy to get out of sync.
It is true that there are some companies who sell shoddy products, gouge their customers, or lie and cheat to make a profit but, in the long run, they don’t stay in business very long because, if the marketplace is left free to regulate itself, those companies will lose customers and go out of business or their owners will eventually be put in jail for violating the law. That’s the result of the pendulum swinging back and forth.
It is true that there are some companies whose products are no longer in demand and therefore they will go out of business but it is just as true that new products will be invented that will take the place of the old and those companies that sell these new products will prosper and grow. That is the normal and necessary up and down cycle of the free market.
The proof that free markets work is that, since America is the freest country in the world, it also has the greatest economy in the world. That’s what happens when the marketplace is left free to regulate itself. It isn’t a coincidence that freedom and prosperity go together.