Michael Strain argues that a free-enterprise system is not merely a tool, as J.D. Vance has argued, but an end in itself

In a recent interview with The New York Times, US Vice President J.D. Vance noted: “I think one of the criticisms that I get from the right is that I am insufficiently committed to the capital-M market.” Vance made clear his belief that “the market economy is the best way of provisioning goods and services and coordinating people across a very complex society,” but the market, in his view, is a “tool,” rather than “the purpose of American politics.”

Is he right? Is the market merely a tool – a means to an end? Or should a free and well-functioning market be an end in itself?

These seemingly esoteric questions underpin many policy disagreements in the United States. Market-oriented policymakers and commentators are reflexively concerned about laws or regulations that might impede economic efficiency, whereas the progressive left and the right-wing “Make America Great Again” movement lack that impulse – and, like Vance, are often dismissive of it.

But advancing market efficiency should be a goal of government. Vance is right that markets are the best way to allocate scarce resources and coordinate economic behavior. Because their smooth functioning generates greater prosperity, making markets free and efficient is, in fact, to use Vance’s language, a “purpose of American politics.”

One of populism’s damaging features is its tendency to minimise the importance of material prosperity. US President Donald Trump, trying to downplay the price increases from his trade war, apparently sits in judgment of what he considers to be excess consumption, arguing that children need “three dolls or four dolls,” not “30.” According to Trump, children “don’t need to have 250 pencils. They can have five.”

Trump’s framing focuses on upper-income families. But if well-off parents can afford to buy only a few dolls for their children, many more children will end up with none. And while dolls and pencils may sound trivial, price hikes for food, clothing, and shelter also follow high tariffs. This rise in consumer prices will erode real household income. Reducing Americans’ purchasing power is a serious problem precisely because one of the US government’s primary objectives is to advance prosperity.

For those of us who believe in limited government – a commitment that used to define the Republican Party – free markets are not just a tool: advancing economic liberty is itself a proper goal of government. In a free market, transactions are voluntary, and exchange occurs only if it makes both parties better off. By contrast, government interference in markets often leaves people in a worse position by prohibiting transactions and changing relative prices.

Free markets also create the conditions for political freedom – another traditional conservative commitment. Vance is quite right that markets are the best way to coordinate people across a complex society. When the government tries to do the coordinating, its size and scope necessarily increase.

For example, both the left’s large social programs and the MAGA right’s industrial policy and trade wars attempt to substitute government policy for the coordinating function of markets in determining the composition of private consumption, investment, industry, and employment. That results in more expansive and intrusive government. And when the government is putting its thumb – or, more accurately, its fist – on the scale to determine the prices you face and the occupation you practice, political liberty is both diminished and threatened.

Moreover, markets are not mere amoral tools for allocating resources and coordinating behavior. They cultivate a variety of virtues, including prudence, thrift, industriousness, honesty, reliability, and innovativeness, and increase ambition and risk-taking. Voluntary market exchange makes society more cooperative and confers a mutual dignity and equality among citizens, fostering an awareness of the obligations we have to each other. The Starbucks barista and the millionaire customer may have very different net worths, but they look each other in the eye across the counter as equals in the transaction, and each offers genuine thanks to the other.

In a market economy, hard work pays off: productivity largely determines compensation. When effort is rewarded, people have agency and can practice the virtue of personal responsibility.

There are broader benefits, too. The economic growth that results from the free-enterprise system reduces social conflict by allowing some people to do better without requiring others to do worse. Free markets are also the most effective anti-poverty tool in history. As the developing world adopted them, the share of the world population living on less than $1 per day fell dramatically, from over one-quarter in 1970 to around one in 20 by 2006.

Of course, pursuing free markets must be balanced against other important – and sometimes competing – economic, political, and cultural objectives. Some government interference in markets – including taxes on pollution, subsidies for education, and other programs that align social and private costs and benefits – is welcome. Federal-earnings subsidies, for example, may impede private economic efficiency but also encourage participation in the economy by increasing employment.

No, markets are not merely a tool. One purpose of politics is to ensure the sound functioning of free markets because they advance prosperity, foster economic and political liberty, and promote individual and social virtue. True, the market must not become a false idol. But one can avoid that trap without falling into another: denying the truth about free enterprise.

Michael R. Strain, Director of Economic Policy Studies at the American Enterprise Institute, is the author, most recently, of The American Dream Is Not Dead: (But Populism Could Kill It) (Templeton Press, 2020). This content is © Project Syndicate, 2025, and is here with permission.