You’re right that immoral actors aren’t always driven from the market. The market can only handle minor offenses, such as greed. For major offenses like fraud or theft, the market is ill equipped. Taking care of those offenses is the role of the state in all traditional liberal thinking.

Also, respect for people, animals and the environment are not issues that the market can handle well, either. That’s not market failure, as some suggest. No classical liberal ever imagined that people would give the market that responsibility. Respect for people, animals and the environment begin with private property. Protecting property is the state’s job. The market cannot do it. Where people, animals and the environment are not respected tend to be places with little respect for private property and a lot of state owned property.

I don’t think that the immoral actors are always eventually driven out of the market by competition. And the problem here is imperfect information. For example, if I could be well-informed about how the beef got from the cow to the grocery store, I might make different choices. But, too often, consumers (like me) are lazy or blissfully ignorant, resulting in them making choices that are based on what they can see (price) rather than their value system.

The solution is not more regulation, but more information and more responsible investigation on the part of each consumer!

Basically, my point is that the free market CAN be morally positive, but it all depends on the choices you and I make. In order to use the market for good, I need to be well-informed about what sort of choices I am actually making as a consumer. And I need to always be encouraging others to be well-informed themselves.

By affirming the free market process as a moral good, I doubt that Chris was endorsing everything every actor in the market does. Take religion as an example. It’s possible to endorse Christianity as true and good without endorsing the actions of every Christian.

Individual market participants will often act in ugly, immoral ways. How do we handle them? We can have the state try to prevent such behavior beforehand with massive regulations, or we can let competition drive the immoral actors out of the market. Adam Smith concluded over two hundred years ago that competition did a better job than does state intervention. That’s Hayek and Mises’ conclusion, too. There is no system under the sun that will prevent evil people from acting on their evil desires. All we can hope to do is to manage those types of people as best we can.

You seem to be saying that taking risks as an entrepreneur and particularly finding success in the free market, is, in itself, a good, “morally positive thing”. Would you say there are any instances that this isn’t so? If there are, would you say that it is an example of the market being “employed” incorrectly?

For example, the fact that consumers make decisions “in the face of uncertainty and imperfect knowledge”, to me represents a danger. Specifically, the danger that a consumer acts out of line with their own value system, unknowingly. I’m thinking of buying meat that looks good at the store, but that I would never buy if I knew how it got there.

Also – Jonathon pointed this out at a the LOTR Acton on tap – entrepreneurs can sometimes find great success in the free market by taking advantage of addictions and temptations. Through manipulative advertising and other shady tactics, firms can literally appeal to the weaker, you might even say irrational, side of their target consumers. Though it’s perfectly legal, and though the trade that takes place in the free market is perfectly legit and voluntary all around, I would not call this particular process a “morally positive thing”.

Finally, one last question. Would you say that as a market economy develops and matures, it becomes more and more respectful of people, animals, and the environment, or less mindful of these things?

Overall, I affirm you, this post, and your friend Michael.