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Free Markets Are Necessary But Not Sufficient
Free Markets Are Necessary But Not Sufficient
Jan 12, 2025 2:02 PM

To be a champion of free markets is to be misunderstood. This is doubly true for free market advocates who are Christian. It’s an unfortunate reality that many of us have e to accept as inevitable.

That doesn’t mean, however, that we don’t attempt to clear up misunderstandings when we can. So let me attempt to clear up one of the most notorious misunderstandings: Few advocates of free markets (and none who are Christian) believe that free markets are a sufficient condition for human flourishing. We believe they are a necessary condition, but they alone are not sufficient.

Economist Donald J. Boudreaux (who, for what it’s worth, is not a Christian) explains:

To understand the limits of economics is to avoid the error of assuming that economic success requires only that monetary incentives — prices, wages, profits, rates of return — be correct. Tariffs, minimum wages and other government interventions that distort monetary incentives do indeed make economic performance worse than it would be otherwise. But the success of even the freest market requires that people respect each other’s property rights, that people keep their promises and that people behave responsibly toward their family, friends and own future selves.

A society dominated by adults who never look beyond today will never e wealthy, no matter how free the market might be.

If the culture says “Live only for today!” then too few people will reduce their pursuit of immediate pleasure; too few people will have the discipline to sacrifice today’s certain pleasures for the always-uncertain prospects of a brighter future.

Markets that are at least reasonably free are a necessary condition for prosperity. But free markets are not a sufficient condition. This fact is why deregulation alone or free trade alone or tax-cutting alone should not be expected to spark and sustain widespread economic growth.

The case for free markets presumes the existence of a culture that encourages people to care about their families and their futures and that discourages people from looking with scorn upon entrepreneurs and merchants. Under these cultural pre-conditions, prosperity will indeed occur if markets are free.

You might believe this is obvious, but you’d be wrong. I agree that it should be obvious, but almost every critic of free markets presumes that when we argue for economic freedom we are saying that liberty is sufficient, and not merely necessarily, for flourishing.

The reality is that without a moral culture that produces virtuous individuals, free markets will not — indeed cannot — lead to true human flourishing. This is why one of the Acton Institute’s Core Principles is that, “Liberty flourishes in a society supported by a moral culture that embraces the truth about the transcendent origin and destiny of the human person. This moral culture leads to harmony and to the proper ordering of society.”

It is important that we correct our critics about this misunderstanding between necessary and sufficient causes. But it is even more important that we advocates of free markets never get confused about the difference.

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