Under steady pressure from post-liberal and populist voices, Republican party leadership seems to have taken a surprising turn against the free market and towards interventionist policies—protectionism, industrial policy, regulations, welfare, and labor unions—more traditionally associated with the Left than the Right.

　　The truth is that the free market is not easy to defend. That is not to say it is indefensible. To the contrary, there are many strong arguments in favor of it, including the scope it gives to human freedom and creativity; the innovation and wealth it generates; and the incompetence, injustice, and dangers of undue government interference and control.

　　But most people find it difficult to understand and appreciate these arguments when faced with the immediate advantages of government intervention. The problem is not logical, it is psychological. Instead of an explicit rejection of the free market, we have witnessed the steady growth of well-intentioned anti-market attitudes and policies, which cause real but hidden harm while nudging us along what F. A. Hayek famously called The Road to Serfdom.

　　We can see why the defense of the free market is so difficult and yet so important by juxtaposing it with other domains of human action. The common good of a healthy political association is not simple. It includes at least three spheres that exist in a dynamic and uneasy tension with one another: civil society, the free market, and government.

　　This seemingly clear division can be very misleading, since all of these spheres, and their corresponding activities and habits, overlap and intersect in ways that are difficult to distinguish. Each sphere has its own distinctive purpose, activity, and “logic” or mode of practical reasoning. And one consequence of this complex reality is that human beings must learn, and learn to apply, different standards of evaluation and behavior to different domains in their lives.

　　Put most simply, civil society is the sphere where persons pursue the “intrinsic” goods—goods we have reason to want for their own sake—that constitute happiness and flourishing. Civil society is the space of genuine leisure; not merely entertainment, but worship, marriage, family, friendship, and culture. It operates by a “logic” of generosity, commitment, caregiving, and charity.

　　The free market is the sphere of “instrumental goods”—goods such as money that we only have reason to pursue for the sake of other goods—where persons acquire the means for their flourishing by exchanging their time, labor, resources, and other instrumental goods. It operates by a “logic” of negotiation, calculation, and thrift.

　　Finally, government is the sphere that provides the overall framework within which the other two spheres can operate well. Government also helps prevent encroachments by the other spheres and provides goods that are difficult or impossible for the other spheres to provide. Government operates by a “logic” of common deliberation and collective action on behalf of the common good, backed by coercive power.

　　Each of these spheres provides something distinctive that cannot be provided by the others. Left alone and in isolation from the others, each is prone to expand beyond its due limits, harming people and the common good. The challenge is to make all three work together and correct one another in the way that best promotes human flourishing. The constant ideological temptation is to reduce them to one. Totalitarian ideologies such as communism and fascism attempt to absorb civil society and the market into government. Libertarianism tends to reduce government and civil society to the logic of the market. More subtly, theocracy seeks to subordinate both government and the market to a unified vision of civil society determined by religious authority and doctrine.

　　Of these three spheres, the free market is the most difficult to defend. And that difficulty is not simply the result of market excesses or externalities, like manipulative advertising, a surplus of cheap, ugly products, or pollution. The difficulty is intrinsic to even a healthy market. The reasons have to do with scarcity, utility, impersonality, self-interest, and complexity. These words typically cause a negative emotional reaction. Yet each word expresses a reality we rely upon every day, and which we must humbly acknowledge and accept in order to flourish.

　　First, the free market exists because of something no one likes to be reminded of: Scarcity. Human beings are very needy. Nature does not spontaneously provide food, clothing, and shelter, much less the time or instruments of leisure like books and musical instruments.

　　Second, the primary advantage of the free market is its usefulness in helping overcome scarcity. We all like and need useful things, but as Aristotle repeatedly observes in his Nicomachean Ethics, the useful is not beautiful. Beauty consists in a gratuitous overflow of being that attracts our wonder and admiration, whereas the useful is merely necessary.

　　True, the market unleashes astonishing creativity and energy. Ayn Rand is a mediocre novelist, but her romantic entrepreneurs remind us of the kinds of human greatness that can find a place in the free market, and of the gratitude we should have for their efforts. Still, in the end, for most people, the market is about “getting and spending,” in which all too often “we lay waste our powers.”

　　Third, the logic of the free market is impersonal. If the first two elements did not elicit immediate negative reactions, this one is sure to do so. We are naturally attracted to the intimate personal relationships that characterize civil society, and resist anything that threatens to depersonalize us. And for many, the “impersonal” seems dangerously close to the “de-personal.”

　　And yet St. Peter tells us in Acts 10:34 that “God is no respecter of persons.” What could this possibly mean? Put most simply, it means that justice is impersonal, and that God is just. As St. Thomas Aquinas explains, respect of persons means showing an undue partiality to specific persons. It is a sin against distributive justice. This is why justice is often depicted as a blindfolded woman holding scales. It is the reason judges wear black robes.

　　The market too is impersonal in the sense that typical market exchanges are motivated by goods rather than persons. As suspicious as this sounds, we demonstrate this fact every time we go through the check-out line at the grocery store. The transaction is hopefully personable, but it is not personal in the sense that either you or the clerk is primarily there out of an altruistic desire to help the other person. In fact, you are in some sense using one another in a way that reflects Aristotle’s friendships of utility. This is not the highest form of friendship, but unless force or fraud are involved, neither is it wrong. Neither grocery clerks nor buyers feel “used” in their transactions, as one naturally feels used when one has been taken advantage of or manipulated. It is precisely this impersonality that makes the market work so well, whether it involves buying milk from the grocery store or a used guitar from a seller in a different country.

　　Fourth, and relatedly, the logic of the market is undeniably self-interested. Yes, the market is driven by people serving one another, and without it, we would not have even the simplest things we take for granted, like pencils. But in the market people primarily (though not exclusively!) serve others in order to benefit themselves. As Adam Smith famously wrote, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from regard to their own self-interest.” We should not let sentimentalism prevent us from acknowledging the truth of this statement.

　　But as Smith also affirmed, self-interest is not the same thing as selfishness, nor is it necessarily individualistic. When we shop at the grocery store, we are not always seeking to provide only for ourselves. Usually, we are also seeking to provide for the closer circle of persons for whom we are responsible: our parents, spouses, children, and friends. And it matters that even though persons in market transactions do not have the good of the other foremost in their minds, typical market exchanges are not a zero-sum game, but a win-win. All parties to the exchange benefit.

　　As Hayek showed, government control over the means to human flourishing leads inevitably to government control over the ends of human flourishing.

　　Along with self-interest, the logic of the market fosters distinctive virtues such as saving, thrift, and industry. These virtues certainly lack the self-giving splendor of generosity, magnanimity, or friendship, not to mention faith, hope, and love. In isolation from the other human virtues, they would turn us into Ebenezer Scrooges: alone, angry, and sad. Nevertheless, they involve real human excellences, and without the reasonable self-care that they support, the other virtues would be impossible. How can one care for one’s friends and family if one does not work hard, save, and spend wisely?

　　Finally, the free market is a kind of spontaneous, “polycentric” order that emerges from the diverse activities of individual persons by a hidden process that is impossible for any human being, or group of human beings, to fully understand or manage. It is “the result of human action, but not the execution of any human design,” to quote Adam Ferguson. It thus dramatically differs from organizations, which are made and managed from the top and center, such as households and corporations. This quality of the market unsettles many human beings, who are often distrustful and even fearful of things they cannot fully understand and control.

　　But spontaneous orders are an essential means of human flourishing. Take language, for example. Language—vocabulary, syntax, grammar, style—although in some sense made by human beings, is not the result of a single human plan or design imposed from above. It develops organically through the interactions of persons and communities in time, in a complicated and largely tacit process of tradition, standardization, and innovation. Of course, this does not prevent attempts to impose Orwellian newspeak, as with today’s “preferred pronouns” craze. Another example of a spontaneous order is natural science, a fact richly illuminated by Michael Polanyi.

　　These examples help put the free market in a new light. As F. A. Hayek argued, the best explanation and justification for the free market is not egoism or greed or even wealth, but the “knowledge problem”: No single human being or government can possibly know the relative value of goods for everyone, how many and what kind of shoes, apples, houses, books, et cetera, to produce, because this information is widely dispersed. In almost all cases, individual persons know best what their needs and interests are. Prices, emerging through a multitude of different transactions, uniquely coordinate this widely dispersed information so that each of us can know and respond to the relative value of scarce goods we want and need.

　　Hayek, who was not a libertarian, knew the free market only functions well when political institutions secure private property and economic liberty. He also knew that markets sometimes “fail,” and he advocated an “indirect method” of government action to help correct market failure by harnessing the forces of spontaneous order. Although he supported compulsory education, for example, he was an early proponent of tax-funded tuition vouchers for parents.

　　But Hayek warned against government attempts to replace the market. The free market requires humility, or an appreciation for the limits of human knowledge and control. Humility will always be disadvantaged against human pride and pretension, especially when the advantages of government interference are immediate while the costs are indirect and often “not seen.” This problem was first identified by the French economist Frederick Bastiat, whose famous “parable of the broken window” insightfully draws our attention away from the work generated by the need to repair a broken window (what is seen), to the more productive work that labor might otherwise have done (what is not seen).

　　A favorite example of mine is the New Jersey law requiring that all gas be pumped by a service station attendant. Not surprisingly, polls consistently indicate that a majority of New Jersians support this law. They see this wonderful gas pumping service in the middle of a New Jersey winter. They do not see the higher prices they must pay for other goods like food, beverages, and of course, gas. If they were ever given a clear choice between the expensive gas pumping law and a money-saving self-service law, they might choose differently, since wherever this choice has been given gas pumpers have disappeared.

　　Increased prices are not the only “unseen” cost of this law. According to a story in the New York Times, New Jersey gas stations have also been forced to shut down pumps due to labor shortages. Apparently there is more valuable work gas pumpers might otherwise be doing—house maintenance and construction, farming, food service, lawn care—instead of providing a luxury service mandated by the state for which there is likely little to no real demand.

　　The costs of the New Jersey gas pumping law are relatively small. But the logic of the law, consistently applied to other domains of human activity such as mowing lawns or buying groceries, would reveal the horrible truth of what happens when governments attempt to engineer the market. In fact, our society is a wild jungle of “New Jersey Gas Pumping laws,” mandates, subsidies, and restrictions in energy production, manufacturing regulations and labor requirements, protective tariffs, medicine, and education—that are inefficient and costly, and yet have popular support because the costs are hidden (or redistributed to others) and we only see the benefits.

　　Worse, our system perversely incentivizes government intervention, taxing our earnings to pay politicians for full-time work to come up with new ways to interfere in the market. And in most cases, these interventions, like the New Jersey gas pumping law, are not the result of careful deliberation about costs and benefits for the common good. They are the product of well-financed, powerful interests seeking to use the government for their private advantage.

　　The five reasons listed above explain why we have a dangerously large and growing national debt driven by an inefficient, unjust, and increasingly unsustainable entitlement system, and why none of our leading politicians and presidential candidates will talk about it. Whether the area is energy, finance, labor, education, or healthcare, at each stage gross distortions in the market and civil society created by government interference have resulted in demands for further government interference, placing us inexorably on the “road to serfdom.” And as Hayek showed, government control over the means to human flourishing leads inevitably to government control over the ends of human flourishing. In the political race to subject the market to moral ends, everyone loses.

　　Defending the free market does not make one a libertarian, or a globalist, or a neoliberal, or a free-market ideologue. The free market can and does fail, sometimes horribly. And human flourishing involves institutions, practices, virtues, and forms of action that the free market cannot provide, and which it even sometimes undermines. Every domain of human action is subject to moral evaluation, but we should beware of whatThomas Sowellcalls “fact-free moralizing,” which only credits the good intentions of an act or policy, even when the consequences are demonstrably bad. The argument here is comparative and prudential: In thinking about market failure and government intervention, we should always keep in mind that the free market provides a powerful and irreplaceable means of making use of valuable but limited and highly dispersed information, that the free market is the most defenseless sphere of the common good, and that governments also fail, with consequences far worse than failures of the market.