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U.S. Capitol with Money Background (U.S. Economy)
Jeff Bezos, founder of Amazon and, since 2013, the owner of the venerated Washington Post, has told readers of a shift in policy for the editorial page:
“We are going to be writing every day in support and defense of two pillars: personal liberties and free markets.”
It is no surprise that he is enamored of his own liberty and freedom but, when he invokes free markets, he implies an economy that is working in the public interest, not just his own.
Consider two competing definitions of freedom:
- Freedom from government interference in business and personal activity. Today this means less regulation and lower taxes, the core goal of Project 2025. It is this version of freedom that is used to justify the indiscriminate cutting of federal agency employees.
- Freedom from scarcity. Economic freedom increases when people have greater access and choice among goods and services. For example, when the economy was recovering from the Covid-19 pandemic during 2021-22, prices rose faster than wages and economic freedom fell; later, as wages rose faster than prices during 2023-24, economic freedom rose.
What is a “free market” and what does it have to do with “freedom?”
The standard model of the “free market” is an abstract description of how the price system provides incentives for investors, innovators and entrepreneurs to form enterprises that produce and sell goods and services to buyers. But, for real markets to fit this description, certain rather stiff pre-conditions are required.
In the model, consumers are well-informed of the quality, durability, safety and other characteristics of the goods and services they are buying. Moreover, all market exchanges—buyer/seller; employer/worker; entrepreneur/banker, etc.—are voluntary and "mutually advantageous.” Business firms compete on price, product quality, services, as well as innovation and cost-control. That competition compels profit-seeking firms to serve the public interest—i.e., by increasing buyers’ choice and freedom—even though that is not their intent. If these pre-conditions are in place, the market system performs this feat without government direction on price or quality of the product or service.
Mistaken Use of Free Market Concept
Secretary of the Treasury Scott Bessent presumes that private sector free markets are the optimal system of production and distribution of goods, services and assets, while the public sector is a “toxic” drag on the economy. He asserts that the shift from public to private spending will require a difficult “detox period” compensated later by the detoxified free market.
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Once the private sector market system is presumed to be superior to the public sector, it follows immediately that government should be made smaller regardless of how its size is reduced. Faith in the free market justifies the indiscriminate DOGE-style firing of federal employees across government agencies.
But what if the preconditions are not present?
The standard free market concept relies not on faith but deductive logic; if the pre-conditions for it to work are not present, then the beneficial results cannot be expected. One important category of the economy that cannot be produced and distributed efficiently by markets are “public goods.” A partial list of these goods and services includes streets and roads; sewer and water; police and fire protection; national defense; gun safety; air quality; biodiversity; flood control systems; disaster relief; social insurance for health, disability and poverty in old age; the legal system; infrastructure investment; and public parks. These incredibly important activities are a public responsibility.
Careful study of the free-market concept debunks Secretary Bessent’s notion that a detox would be followed quickly by economic resurgence. To the contrary, indiscriminate cuts in government spending will slow the already inadequate investment in productive public sector assets—bridges, roads, rural and inner-city broadband—extending the drag on economic growth.
Another important lesson from the free market model: efficiency requires that markets are directed by the preferences of the people it serves. To mimic, in the public sector, the lessons of the free market model, representative voter preferences should determine the right mix of public investments—e.g., rural roads versus urban roads, public schools versus publicly financed private voucher schools, acceptance or rejection of federal dollars for Medicaid expansion; legislative district gerrymandering must be eliminated.
If Bezos devotes his opinion page to describing free market concepts, he should do it right, not as a faith-based justification for anti-government reflexes, but as a foundation for understanding the role of government in a market economy.
