One reason why some people don't like free markets is because of the waste that they engender. People are allowed to create products that nobody will buy. People are allowed to put huge amounts of resources into creating a product that isn't as good as an existing product. If you had a really smart person in charge of the economy, they could get rid of that waste, and only make the good stuff that people want to buy.
Apart from the difficulty, nay, impossibility of finding anybody that smart, and the pressure that person would face to pick his friends' products, you also have the fallibility of humans. If you have a single entity in charge, which has the ability to coerce everyone into following their plan, then you have a problem. You see, ninety-nine out of a hundred times their decision will be correct, or at least better than a free market. That hundredth time, though, they'll be so wrong as to completely destroy the economy.
A free market does many things that are wrong, but it never does just one thing. Because it never does just one thing, and often does many things, it's extremely unlikely that everyone will do the wrong thing at the same time. Because of this, free markets are robust. They are not subject to a system-wide failure.
posted at: 13:20 | path: /economics | permanent link to this entry