Free-Market Economy

A free-market economy is a complex of voluntary exchange relationships. Some of these relationships are fleeting, as when someone buys a T-shirt from a street vendor, whereas others are more elaborate, as when a company agrees to supply to a customer certain specified cellular telephone services over the course of a year. Common to all voluntary exchanges is each party's belief that his participation in the exchange will make him better off. This conclusion follows from the fact that all exchanges on free markets are voluntary. Because every person has the right to refuse any offer of exchange, each person accepts only those offers that he believes to be in his interest.

All that is necessary for a free-market economy to exist is security of private ...