Milton Friedman 'fesses up: No "free" markets!

Milton Friedman, the guru of profoundly influential monetarist and laissez-faire ideas of the past few decades has pulled the plug on free markets ... maybe without realizing it.

From NPQ, the New Perspectives Quarterly:

Free Markets and the End of History

Friedman | ... “Free markets” is a very general term. There are all sorts of problems that will emerge. Free markets work best when the transaction between two individuals affects only those individuals. But that isn’t the fact. The fact is that, most often, a transaction between you and me affects a third party. That is the source of all problems for government. That is the source of all pollution problems, of the inequality problem. There are some good economists like Gary Becker and Bob Lucas who are working on these issues. This reality ensures that the end of history will never come.

Intrepretation: Because transactions using the medium of money ALWAYS affect a third party, there is no such thing as a "free" or "unfettered" market in terms of the customary definition of the economic term. The reason for this is the clear fact that all costs incurred in the production and distribution of goods and services are not paid for out of the monetary selling price of the goods and services ... only the reimbursement of "ownership" costs ... so what is "free" about free markets is their being free of the costs they incur to others than the legally defined owners of the goods and services for sale—sellers and buyers.

Read the whole interview.