America's Founders and Founding Principles

Free Markets

When people can freely trade their property, prosperity results. When governments seek to control commerce, poverty ensues.  

Milton Friedman received the Nobel Prize in Economics and observed this:

“So that the record of history is absolutely crystal clear. That there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”

The founders of our country recognized the value of free markets and worked to protect freedom by placing strict limits on government and their ability to interfere in the economy. They created the U.S. Constitution that said the government could not take property without proper compensation (preventing abuse of "Eminent domain". They specifically enumerated powers of the government so that it could not seek to regulate an economy to its own benefit.

They recognized what was observed by one of the people who inspired them, Adam Smith:

“It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own self-interest”.

In other words, when people serve their own rational self interest, they provide goods and services at the lowest price and highest quality that people desire. That is not to say that the government has no role. For instance, it is appropriate to pass laws that say a company can’t simply dump its waste in the middle of the street. But government should be careful not to regulate in ways that harm the function of the free market.