What Is a Free Market?

Few ideals are so quick to our lips today as that of “freedom.” Except during brief periods of national insecurity or soul-searching, when the language of “safety,” “health,” or “justice” comes temporarily to the forefront, it has remained resilient as the common currency of our politics, on both the right and the left. To be sure, the word is put to use in service of radically different and often opposed ideals, but this should hardly surprise us. As Oliver O’Donovan observes, “Freedom is the looking glass in which we search our features anxiously for signs of ‘unfreedom.’ But the collapse of any vital condition can occur in a multitude of ways, so what appear to be straightforward descriptions of freedom turn out to be hugely various political ideals, some of them in tension with others.” 

This is especially so when it comes to economic freedom, a concept that, especially in America, has succeeded in crowding out almost all other ways of thinking about freedom. For the generation after World War II, America’s mission in the world was almost inseparable from its claim to represent “the free enterprise system” against the closed societies and command economies of the Soviet Union and its satellites. This point was sharpened by Milton Friedman and his disciples—among them Ronald Reagan—in the 1970s and 1980s, so that by the time the Berlin Wall fell in 1990, “free markets” eclipsed all else as the essential gift that the West sought to export to the rest. Although American politics is ostensibly divided between a pro-free-market Republican Party and a more ambivalent Democratic Party, almost everyone in American politics at least pays lip service to the ideal. But what is this ideal? What might it mean for a market to be free? 

Political philosopher Isaiah Berlin famously distinguished between two concepts of liberty: a “negative liberty” of non-interference and a “positive liberty” to realize oneself as an agent. The proponent of a strictly negative liberty is liable to focus on the obstacles posed by laws and regulations to an individual’s or business’s freedom of action and will argue for a policy of libertarian non-intervention. Those concerned with positive liberty, however, may emphasize the material conditions of necessity imposed by poverty and argue, as Franklin D. Roosevelt did, for “freedom from want” as a necessary condition of freedom, a condition that may require aggressive government intervention. For many decades in American politics, Republicans championed negative economic liberty and Democrats positive liberty, although the coalitions have become far murkier since 2016. 

Complicating the picture is another distinction, between individual liberty and what we may call corporate liberty (not in the sense of the modern business corporation, but the older idea of any self-governing community or “body politic”). Those concerned with individual liberty are liable to focus on the freedom of the consumer (since production, especially in modern economies, almost always requires large-scale cooperation) and will thus favour policies, like free trade, that maximize the number of options and minimize the prices facing consumers. Those concerned with corporate liberty, though, might be concerned about the freedom of the nation as a whole, which means promoting its economic independence from foreign supply chains that could weaken it or hold it hostage. They will accordingly oppose free trade. There is no easy answer to this latter debate, and indeed the two main American parties have switched sides on it twice in the past century: originally, Democrats were avid free-traders, while Republicans stressed its drawbacks, before the two parties swapped places in the latter half of the twentieth century; in just the past few years, Republicans have started to swing back around toward protectionism in service of national freedom, while Democrats have embraced the idea of a borderless world in which individuals, goods, and services can go wherever they want. 

As Christians, we are often tempted to latch on to one or other of these rival visions and slap the label “biblical” on it. There have been times and places where Christians have campaigned for socialism or even communism, a society in which every citizen is freed from poverty and the oppression of an employer, as the only authentically Christian economic system. Even today on the political left, it is not hard to find Christians framing their calls for redistribution as religious demands. Perhaps more common, though, at least in America, has been the temptation to baptize free-market capitalism as God’s own economic paradigm, and to rummage through the Scriptures in search of proof texts for the prescriptions of Milton Friedman and Friedrich Hayek. While there are certainly better and worse economic systems, true and false economic dogmas, we should always beware of making the Bible answer questions it was never written to address. 

Indeed, such debates can readily distract us from the deeper forms of freedom and unfreedom that concern the biblical authors. It is entirely possible for our quest for ever-expanding outward freedom to go hand in hand with insidious forms of moral and spiritual bondage. Our habits and ideals of consumption are a case in point. 

The False Freedom of Consumerism

According to the idea of “a free market” most prevalent today among American Christians, the most important economic freedom is that which multiplies and maximizes our choices. A market free from regulation, so the story goes, is one in which free competition between producers will generate an ever-expanding range of products catering to every conceivable consumer taste, while also driving down prices so that the consumer can afford to choose between more and more items. And indeed, since the Industrial Revolution, such has been the experience of one developing nation after another: products that were once luxuries available only to a small elite soon became the daily fare of an expanding middle class, and eventually even the poor had access to a range of goods and services formerly beyond the imagination of even emperors. However, beyond a certain point, more and more does not necessarily mean better and better. Ever-expanding choices may not enhance our freedom, since the mind can only meaningfully distinguish between a limited number of options. 

Consider, for instance, Netflix, or the cereal aisle at a modern supermarket. At first glance, both of these epitomize a glorious realization of the modern idea of freedom. Here we find ourselves, more than any previous generation, or indeed any previous year, “free to choose,” as Friedman put it. The possibilities before us are nearly endless. But therein lies the problem. All of us are probably familiar with the experience of paralysis that can take hold in these situations and myriad others like them—a listless, restless, aimless browsing that becomes less satisfied the longer it looks and in the end picks a movie to watch, or a high-fructose-corn-syrup concoction to eat, almost at random. But, of course, randomness is the opposite of purposefulness, the opposite of free action. What has happened in situations like these is that the possibilities have multiplied beyond the point where rational choice is viable, particularly given the relatively inconsequential nature of the decisions. 

Faced with such paralysis, we frantically search for some form of guidance to orient our decision-making, some source of meaning. This wish, too, the market is happy to grant. As most of us are now only too well aware, we are perhaps more passive than active when it comes to choosing the next title to watch on Netflix. The almighty algorithm nudges us gently but firmly toward what Netflix thinks we might most enjoy—or else, in the case of Netflix’s original content, toward what Netflix wants us to enjoy. Indeed, it may well be that we opened Netflix in the first place not so much as a purposeful, free decision but as the end result of a long sequence of algorithmic nudges from advertisements or social media feeds, which all conspire to tell us what we really want. 

While the technology may be new, the basic principle is not. On the contrary, such “nudges” (a term coined by behavioural economists Richard Thaler and Cass Sunstein) are ubiquitous in a market economy, and not just in obvious ways like advertisements or celebrity endorsements. Let’s consider that cereal aisle again. It may look like a random array of a hundred options, but you can guarantee that there is a method in the supermarket’s madness. Some of those cereals will go on the hard-to-reach top shelf, others at eye level, and others at toddler level. Grocery stores may charge suppliers more for the privilege of putting their products in the most eye-catching locations, and makers of sugary kids’ cereals have long known that they can maximize sales by putting them where the kids can most easily see them, grab them, and begin the long but inevitable campaign to wear down parental resistance. 

Indeed, advertisers know well that the ideal consumer is a child, since children are quite poor at distinguishing between different kinds of desire and unable to resist acting on impulses. But since children don’t have much disposable income, adults must be conditioned to think and act like children. Hence the modern market economy’s constant campaign (intensified exponentially by digital technology) against what has long been one of the basic conditions of “adulting”—deferred gratification. Increasingly unable to restrain our irrational desires, or even to distinguish rational desires from irrational ones, more and more of us are entering our twenties, thirties, or even forties in an essentially childlike state of immediate impulse-gratification. Needless to say, such childishness is not conducive to the profound self-denial and deferred gratification required by marriage and child-bearing; little wonder, then, that so many developed societies are facing demographic collapse. 

Since the market economy is built on the ideal of ever-increasing consumption, and since there are built-in biological limits to what any human being can consume in the traditional, literal sense (i.e., food and drink), it has been the study of entrepreneurs and advertisers to blur the boundaries between needs, wants, and mere urges. I for one have no desire to go back to the days when indoor plumbing was a rare luxury. But once we approach the frontier where all ordinary needs and wants are met, continued economic growth requires an acceleration in the rate at which products are used up, transforming formerly durable goods like furniture or clothing into consumables that we expect to replace within a few years or a few months. Electronics are often built with “planned obsolescence” in mind, as Apple or Google seeks to convince you that a perfectly functional smartphone must be discarded in favour of one with more camera lenses or fewer buttons. Even better than planned obsolescence is the manufacture of new wants or desires—a process that is most successful when products are geared less toward finite biological needs and more toward our seemingly boundless psychological needs. The most effective products are those that create more desires even as they seem to meet them, whether these be traditional addictive substances like alcohol or nicotine, or the powerful addiction machines of social media. These offer to assuage our loneliness and depression but tend to intensify such feelings the more we use them. The result is not freedom but slavery. “They promise them freedom, but they themselves are slaves of corruption. For whatever overcomes a person, to that he is enslaved” (2 Peter 2:19). 

Market Failures and the Limits of Politics

A consumer economy, then, is not necessarily one where everyone’s freedom is expanded by utility-maximizing voluntary transactions, as its advocates describe it. It can sometimes be an exploitative system in which the freedom of some is purchased at the unfreedom or even addiction of others; consider, for instance, the current thriving global market in pornography or “sex work.” 

To be sure, in the ideal market transaction, both seller and buyer gain. But many transactions are far from ideal; they are rather what economists call “market failures.” Such failures occur, for instance, when there is “asymmetric information”—when a buyer knows something the seller does not, or (much more often) when the seller knows something the buyer does not. It is the task of law to prevent such injustices so that market participants can bargain on a fair footing; thus, we have laws requiring home sellers to disclose the existence of lead paint or other hazardous materials on the property, and laws prohibiting insider trading. 

A more pervasive market failure results from “monopoly power”: whenever one person controls access to something that many people need, he will be in the position to dictate terms to his advantage. If I manage to corner the market for silicon chips, I can ratchet up the price substantially, using my wealth to impoverish rather than enrich my neighbour. Land is inherently monopolistic, since there is only so much of it to go around, and those lucky enough to stake a first claim to a desirable bit of real estate can reap enormous profits when others move in. With other resources, monopoly power tends to be more elusive, but because it is so lucrative, many businesses put most of their energies in this direction: trying to buy up competitors or drive them out of businesses, applying for copyrights and patents (monopolies over intellectual property), or cornering strategic new markets before competition emerges. So we should beware of making careless contrasts between the “freedom” of the market and the “coercions” of laws and governments. “Buy this or else you’ll starve” can be every bit as coercive as “Don’t sell this or else you’ll go to jail.” 

Governments thus have an appropriate role in passing laws to try to limit the accumulation or abuse of monopoly power, but laws can also frequently strengthen monopolies, especially laws intended to prevent other forms of market failure. Consider, for instance, the many regulations set by the Food and Drug Administration. Most of these were intended to prevent shady producers from exploiting information asymmetries to pawn off tainted foods or snake-oil drugs on unsuspecting consumers, but they can also entrench monopoly power when they keep small drug producers from competing with Big Pharma, or small dairy farmers from selling raw milk. Many of the regulations currently on the books are there because monopolistic businesses actively lobbied for them in order to drive smaller competitors out of business. No wonder, then, that many of us have grown so cynical of both “big business” and “big government,” which seem so often to be in collusion to amass power to oppress and exploit. “Behold, the tears of the oppressed, and they had no one to comfort them! On the side of their oppressors there was power, and there was no one to comfort them” (Ecclesiastes 4:1). 

Accordingly, while there is nothing wrong with trying to use good laws to create and maintain the conditions necessary for a truly free market—relative equality, information transparency, enforceable contracts and well-defined property rights, and so on—we should also be honest about the fact that political institutions on their own can do little to ensure full market freedom. In a society where everyone is determined to thieve and exploit, the only way to maintain order will be through draconian and pervasive police powers—but in such a society, won’t the police themselves be corrupt and take bribes? Ultimately, a truly free market is possible only among truly free people. 

Becoming Free People

Indeed, it is worth noting that even while, in a modern economy, many forms of wealth may not actually be zero-sum, the way we feel about wealth is nearly always zero-sum. The rich young ruler in the Gospels could glory in the fact that, being far wealthier than most of his fellows, he was freed from any sense of dependence on them, and indeed knew that they often depended on him. Even if he enjoyed none of the luxuries we take for granted today, he was wealthy in the sense that matters most to fallen human beings—he could rejoice that he had far more freedom and power than his fellows, that he was master of his own life. Thus, regardless of whether it is the case that you can only get rich by making others poor, it is true that most of us only feel rich in relation to others who are poorer, which tempts us in all our economic interactions to seek not our neighbour’s shared good but our own good at their expense. 

Here we find that our various external forms of unfreedom have their root in deeply internal forms of unfreedom, both moral and spiritual. There is indeed nothing new under the sun, and it is remarkable to find that our present condition can be well summed up in terms of what Thomas Aquinas outlined 750 years ago as the two vices related to wealth: greed (or covetousness) and prodigality. In greed, we mimic the inward turning of the rich fool in the parable (Luke 12:13–21), retreating into ourselves and seeking to be self-sufficient. When we do this, we deny the fundamental reality of our created dependence. “Come now, you who say, ‘Today or tomorrow we will go into such and such a town and spend a year there and trade and make a profit’—yet you do not know what tomorrow will bring. What is your life? For you are a mist that appears for a little time and then vanishes” (James 4:13–14). The first thing Scripture tells us about ourselves is that we were formed from the dust of the ground and made alive by the breath of God: we are wholly dependent, secure only as we rest on God. The second thing the Scripture says about us is that “it is not good for man to be alone.” We are never more human than when we are sharing, and in nothing is the fall of humanity clearer than in the barrier it introduces to such sharing (the first thing Adam and Eve did was hide their bodies from one another). Greed, then, is fallen humanity’s descent into solipsism and self-love. 

If in greed we lose our true selves by turning inward and cutting ourselves off in false self-sufficiency, in prodigality we lose ourselves by turning outward and dissipating ourselves in a hundred vain quests to find pleasure, satisfaction, and meaning in earthly goods and experiences. The Preacher in Ecclesiastes says, “I said in my heart, ‘Come now, I will test you with pleasure; enjoy yourself’” (Ecclesiastes 2:1), and he goes on to vividly describe his materialistic pursuits in terms not that different from our own perversions of the American dream: a summer home with lavish landscaping and a swimming pool, service workers to spare him any drudgery, plenty of food, and of course music and sex. Like us, he thought he deserved such pleasures because he had worked for them, and “this was my reward from all my toil” (Ecclesiastes 2:10). But “then I considered all that my hands had done and the toil I had expended in doing it, and behold, all was vanity and a striving after wind, and there was nothing to be gained under the sun” (Ecclesiastes 2:11). Whereas the greedy save too much, the prodigal—more common in modern America—spend too much. But both act out of idolatry. Well did Augustine write in his Confessions, “You have made us for yourself, O Lord, and our hearts are restless until we rest in you.” 

This does not mean, of course, that we must, like some desert ascetic, abandon all forms of earthly wealth and spend all our time in rapturous meditation on the divine. Indeed, the medieval monks who most consistently carried out such an unearthly ideal could do so only by depending on the earthly labours of ordinary laypeople who raised crops with which to feed the monks and built houses for them to stay in. The things of earth are part of God’s good creation, and he meant for us to enjoy them. Indeed, after dismissing such pleasures as “vanity and striving after wind,” Ecclesiastes exhorts us to “go, eat your bread with joy, and drink your wine with a merry heart, for God has already approved what you do. Let your garments be always white. Let not oil be lacking on your head. Enjoy life with the wife whom you love, all the days of your vain life that he has given you under the sun, because that is your portion in life and in your toil at which you toil under the sun” (Ecclesiastes 9:7–9). But this will only work if we “remember also [our] Creator” and “fear God and keep his commandments” (Ecclesiastes 12:1, 13). 

The right relation of the Christian to wealth is one of grateful detachment—receiving all earthly goods as true gifts of God and reminders of our dependence on him and joyfully making use of them, while refusing to rest in them or grow too attached to them. This is what it means to be “poor in spirit” (Matthew 5:3). Augustine again comes to our aid, explaining this posture of soul with his distinction between “use” and “enjoyment” and his idea of rightly ordered loves. All created things are good, but they are good in relation to their Creator; therefore, we ought to love all of them, but in the proper order—in relation to God. Properly speaking, only God himself is an object of enjoyment—that is, something or rather Someone in whom we take pleasure for his own sake, as an end in himself. All other goods are to be used in relation to this highest end, enjoyable only inasmuch as they participate in and draw us toward God. 

Only by cultivating such a spiritual freedom of resting on God can we experience the moral freedom from greed and prodigality that enables our hearts to relate rightly to wealth, that enables us to buy and sell for the good of our neighbour as well as ourselves. And only a society of people who have cultivated such detachment and who refuse to find their highest value in monetary value, their highest pleasure in what money can buy, will be able to maintain the institutions, customs, and laws that foster political liberty and authentically free markets. 

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This article is adapted from Brad’s new book, Called to Freedom: Retrieving Christian Liberty in an Age of License (B&H Academic, 2025).