The core mission of The Heartland Institute is to discover, develop, and promote free-market solutions to social and economic problems. But what is the free market, and how does a free market promote a more vibrant economy?
The free market, simply put is an economic system where the prices for goods and services are determined by interactions within the open market by consumers and the forces of supply and demand free of external control or manipulation.
The free market promotes cooperation through rational self-interest, an idea that Adam Smith referred to as the “invisible hand,” giving every person the opportunity to improve their own lives. Milton Friedman, one of the great economic minds of the 20th century argued “The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.”
A free and open economy is essential to a free society. “The peaceful market competition of producers and suppliers is a profoundly cooperative process in which everyone benefits and where everyone’s living standard flourishes (compared with what it would be in an unfree society),” wrote economist Murray Rothbard in The Concise Encyclopedia of Economics.
The opposite of a free market economy is one dominated by government control, subsidies and regulations. Rothbard once correctly observed in his book Man, Economy, and State that government regulations and subsidies “promote inefficiency in production and efficiency in coercion and subservience, while penalizing efficiency in production and inefficiency in predation.”
While no true free market exists today, the principles of open competition, low taxation and limited government interference in the open market serve as the bedrock of the American economy. The United States has embraced these principles and has not only seen unprecedented growth in our economy, but widespread prosperity and peace.
The Heartland Institute favors public policies that reduce the size and power of government and expand choice and freedom for citizens. We oppose government programs, regulations and tax regimes that favor some at the expense of others.
The Heartland Institute's experts on the economy are available for legislative testimony, speaking engagements, and media interviews.
