Are You Down on the American Economic System? Think About Cooperation.

I was recently reminded of a profound truth about the free market and the prices that sit at its center. Unfortunately, this truth is often overlooked by both critics of the market economy and by economists like myself. This simple truth is that the price system works thanks to and only because of a set of institutions that promote cooperation among us.

As an economist, I’m accustomed to making the case that free markets, although imperfect, are a better alternative than government intervention. It goes something like this:

The free...