The truth about unfettered free markets

I wish that the Democrats would engage the Republicans in a serious debate over the often-repeated Republican claims that a totally unregulated free market would be the best thing for the country.
The Democrats should acknowledge the true aspects of these claims, but remind people of the equally real down sides.

When the Republicans say that a completely free market is the greatest engine for creating wealth, the Democrats should say "Yes, that's true, as far as it goes."
The claim really is true, as far as it goes.
The free market is an amazing natural mechanism for calculating the right prices to set for everything, so that everything is bought and sold as efficiently as possible.

But there's an important point that too often gets overlooked: the free market only cares about maximizing wealth creation. It can be thought of as a giant computer that only cares about efficiency as it calculates prices.
A truly free market does produce the most wealth.
But it doesn't care about literally anything else.
It is perfectly happy to have children working in factories at midnight, without any safety equipment, and dumping mercury into the drinking water, if that will create wealth the most efficiently.
The only thing that the free market cares about is maximizing wealth creation.

So if we understand this, the reasonable question to ask is, do we want to sacrifice some of the unbridled wealth creation in order to achieve other goals, like minimum wages, pollution control, child-labor laws, etc.? Most people would say yes. And reasonable governments do regulate businesses to achieve such goals.

But it is important to realize that this is indeed a decision about a trade-off between different goals. We really do give up some of the wealth creation in order to get the other benefits.
So we should figure out where the right balance is. It is unhelpful and incorrect to just dogmatically assert that all regulation is bad.

Back to the list of economic myths