What is a Free Market, and Why Does It Matter for Me?

I think it would be better if I started with what a free economy is not. Or, in other words, what a “controlled” (or command or planned) economy is. A ​controlled economy is “a type of economic system in which a government controls its country's industries and decides what goods should be produced and in what amounts.” (Oxford University Press)

Features of a controlled economy include price/wage controls (in which the government controls how much things are sold for), governmental choice of career (in which the government chooses where/how you work, or at least what type of industry you are in), and product-creation rationing (in which the government controls how much of a particular product you make.)

The modern (fully) controlled economies would include China, Cuba, Russia, Libya, Belarus Iran, and North Korea. And when the population is compared worldwide, this countries include about a quarter of the population of the world. So a quarter of the world's population lives in a controlled economy. (Worldmaster)

So now that we’ve briefly defined a controlled economy, what exactly is a “free” economy? Well, it’s just the opposite of a controlled economy. A truly “free” economy will be uninterfered with by the government, allowing people to buy and sell according to the subjective value of their labor.

Now is that completely good? Not necessarily. The Old Testament does involve a 3 ⅓ percent tax for the poor (Deut 14:28), so a completely free economy is not required or prescripted in the Bible. However, there is no other biblical warrant for the government to distribute the wealth of its people for the causes of its choosing. “For the Scripture says, ‘You shall not muzzle an ox while it treads out the grain,” and, “The laborer is worthy of his wages.’” (1 Tim. 5:18 NKJV). So the government does not have the freedom to take whatever it wants, or even for what it feels are “good” things. But an absolutely “free” economy would likely have at least some small class of needy people being in abject poverty without help, thus leading to at least a little bit of nessacary government intervention.

Now for the application question…how does it affect you, or me? I’ll give a personal reason, and then a theoretical one.

Now for the personal, a less free market (on a state level) will influence people to move. An example would be my a personal relative. In California alone, they were being taxed around 16% for various programs like housing for the non-working, mental health services, and the (arguably) wasteful and excessive school system. The bottom line is that they got indignant with the taxes to the point where they felt they needed to move. And they did, to Arizona, where the tax rate is around 5%. That's a minor and personal example of what restriction of economic freedom does.

But now for the theoretical, let’s note that more freedom tends to lead to more wealth. Why? Because people really do tend to go where the money is. But when the government feels that they have to step in, they often create a bigger problem by decreasing the amount of wealth that can be reinvested, and instead feeding the money to a forced part of the economy that is usually ineffective.

So to conclude, a free economy is one that is uninterfered by the government. It has multiple benefits, including that of a more wealthy populous, more content citizens, and a more biblical government. However, its major lack, that of needy, uncared for, poverty, can be solved by a moderate welfare system.

Works Cited

Oxford University Press. (n.d.). controlled-economy noun - Definition, pictures, pronunciation and usage notes. Oxford Advanced Learner’s Dictionary at OxfordLearnersDictionaries.Com. Retrieved July 13, 2023, from https://www.oxfordlearnersdictionaries.com/definition/english/controlled-economy

Worldmaster. (n.d.). World population clock: 8 billion people (LIVE, 2023). Worldometer. Retrieved July 13, 2023, from https://www.worldometers.info/world-population/Links to an external site.

Scripture taken from the New King James Version®. Copyright © 1982 by Thomas Nelson. Used by permission. All rights reserved.