The free market works but it's not all there is. The government is supposed to do for the public good what private enterprise can't or won't.
It also seems to me that government can and should do things to level out the gap in wealth between the rich and the poor. The free market is a nice ideal, but when things work out quite the way things ideally "should" be then people should be helped out.
The obvious example is someone who is too old and weak to work. The government should help them out. It only makes sense. The "free market" would let them die.
Less extreme would be a worker who couldn't necessarily afford health care. If the economy in general is wealthy enough to support it, then I say they should get free health care, like in Western Europe.
Or when a worker loses his or her job. It makes sense they should get some money in the period where they are looking for a new job.
The market is mindless and treats everyone the same. Only humans can even out unfairness and imperfections to the system.
It's true that apples grow well. We can leave them in the wild and pick them. But if we want more apples, or want them in different places to where they grow wild, then we need to do something to modify nature, hopefully in the most gentle and harmonious way possible.
The same is true for the market. It works well. It's self regulating, like an apple forest. But if for some reason something isn't working, then humans need to step in and make it work.
People shouldn't need to lose their homes because they haven't had time or savings between jobs to find a new one. People shouldn't be unable to afford basic health care if the economy is large enough to provide this to everyone. What is life or death compared to a wealthy person's new car? (I am leaving out my personal issues with modern healthcare here for the sake of the point I'm making). Are we to be "every man for himself", just because the market is a good enough system for this to work most of the time, or should we (gasp) help out our fellow man when it's needed?
There are issues with institutions being dumb too of course. Many or most policies intended to "correct" the free market have just screwed it up more. But failures in the past doesn't mean that we have to aim for a different sort of failure. The best government, IMO, has the best of both worlds: socialism and capitalism.
Capitalism: a natural system, and socialism, human interventions on the natural.
In our own lives I don't see anyone saying we need be ONLY natural or ONLY artificial. I think it's pretty clear we need both. The same goes for an economy as a whole.
Last edited by Andrew Gubb; 10-10-2011 at 10:56 AM.