The Financial Crisis and the Free Market Cure: Why Pure Capitalism is the World Economy's Only Hope

17What We Could Have—and Should Have—Done

 

ONE OF THE FUNDAMENTAL REASONS THAT FREE MARKETS ALWAYS raise the standard of living in the long term is that free markets are just. They reward firms and individuals that provide goods and services that are demanded by consumers and punish firms and individuals who waste precious resources. The punishment process is as important as the reward system. If companies that do not use our limited resources (capital, labor, and raw materials) efficiently are kept in business, they will continue to waste those precious resources in the future. Markets must be allowed to correct if a free-market economy is to perform successfully in the long term. The first thing government policy makers should have done in ...