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The Incentive Argument

In a free market, each person has a right to decide which trades to engage in. For this reason, a trade will occur only if all parties agree to it. Each person can be trusted to look after their own interests, so a trade will occur only if it is beneficial for all parties.

Objections

Externalities

Sometimes, decisions affect people who have no say in those decisions. For example, future people have no say over how much pollution present people produce, and my neighbor has no say over whether I maintain a presentable lawn. In a free market, you are not required to take account for the effects that your actions have on third parties.

The Freedom to Starve

In a free market, if you don’t like your job, you can quit. If you decide not to quit, then it is safe to assume that you prefer your job over the alternatives. However, this may be because the alternatives are downright terrible. For many people, the freedom to quit feels like the freedom to choose homelessness and hunger, the freedom to lose health insurance, and so on.

Your Own Interests

Often, people do not do a good job of looking after their own interests. It is not difficult to find examples to illustrate this point. Everyone procrastinates sometimes. Many smokers continue smoking even though they want to quit. Severely mentally handicapped people cannot look after their own interests at all.

Distribution

In a free market, a trade occurs only if all parties agree to it. Highly skilled workers can expect to do well under such a system. They have something that other people want, so lots of people will agree to trade with them. People who are disabled, elderly, or unskilled cannot expect to do so well. They may have to rely on charity, and charity is not a very dependable source of support.