The free market is a truly democratic process, one in which everyone has a voice. In fact, it’s the only system capable of recognizing the value of each and every peaceful, cooperative effort in society, thereby ensuring all members are rewarded in proportion to their contributions to the lives of others.
The leaders of this democracy are not politicians, but entrepreneurs. Rather than being elected once in a term of years, entrepreneurs are elected minute-to-minute in a never-ending campaign to win support from their patrons. Consumers vote for entrepreneurs by buying and refusing to buy. Every decision is a message to the market about which entrepreneur is most effective at improving people’s welfare.
Consumers’ decisions thus determine whether entrepreneurs become rich or poor, as well as which businesses succeed and fail, and who will make decisions about how to use society’s scarce resources. Yet this popular mandate is fickle: whereas elected politicians can at best be removed after several years, entrepreneurs are removed overnight by unsatisfied customers. Politicians’ disastrous policies persist long after their authors are forgotten, but if entrepreneurs make harmful decisions in the market, they are punished with ruthless efficiency by competitors.
When consumers are in control, markets reflect the values and wants of each member of society; entrepreneurs aren’t captured by special interests, but by customers who urgently need what they have to sell. In this system all voters can get what they want, not just the ones lucky enough to be members of the majority party.
The marketplace is like a democracy where a million political parties can each peacefully go about the business of trying to improve the lives of their members. Whereas politicians gerrymander voting districts to manufacture support from the public, entrepreneurs use the price system to hear directly from consumers how they would like to be treated.
.. markets are more truly democratic because being unable or unwilling to “vote” declares a preference, just as buying does: refusing to buy is a vote against the status quo. It’s a declaration that prices are too high, or that quality is too low. Entrepreneurs must improve their offerings or surrender their capital. This is the power of the market in a nutshell: every decision, whether it’s to buy or to abstain from buying, influences the vast structure of prices that governs the economy and “distributes” wealth to every individual based on his or her productivity.
.. in the market, people see each other as mutual contributors to the welfare of all. It’s politics that reduces people to sources of revenue, statistical data, and faceless cannon fodder.