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The Merriam-Webster dictionary's definition is not as good as ours.  The dictionary says that the "free market" is "an economic market operating by free competition."  Can you see flaws in that definition?  "Competition" is part of a "free market," but the essence of a free market is the interaction or interplay between supply and demand.  A "free market" can exist with only one supplier, without any competition.  Or there can be competition, such as between the Post Office and Federal Express, without it being a "free market" (because the government interferes by funding the Post Office and imposing limitations on Federal Express).

The Merriam-Webster dictionary's definition is not as good as ours.  The dictionary says that the "free market" is "an economic market operating by free competition."  Can you see flaws in that definition?  "Competition" is part of a "free market," but the essence of a free market is the interaction or interplay between supply and demand.  A "free market" can exist with only one supplier, without any competition.  Or there can be competition, such as between the Post Office and Federal Express, without it being a "free market" (because the government interferes by funding the Post Office and imposing limitations on Federal Express).

Can you improve on our definition of the "free market"?  The homework assignment gives you an opportunity to do so.  For example, the concept of the "free market" could be defined in terms of opportunity:  "the free market is one that provides full opportunity for the poor buy and sell and pursue careers on the same terms as the rich."  Indeed, the poor may be the biggest beneficiaries of the free market.  It is the free market that makes the Bible and food and communications inexpensive for the poor, and which helps bring Christian missionaries to serve the poor in faraway places.  The following example illustrates how the free market has made air travel available to the poor, and available to others in order to help the poor.

Can you improve on our definition of the "free market"?  The homework assignment gives you an opportunity to do so.  For example, the concept of the "free market" could be defined in terms of opportunity:  "the free market is one that provides full opportunity for the poor, so that they can buy and sell goods and services, and pursue careers, on the same terms as the rich."  Indeed, the poor in society may be the biggest beneficiary of the free market.  It is the free market that makes the Bible and food and communications inexpensive for the poor, and which helps bring Christian missionaries to serve the poor in faraway places.  The following example illustrates how the free market has made air travel available to the poor, and available to others in order to help the poor.

In the 1960s and 1970s, government determined what the price of tickets on airplanes would be, and only the wealthy could afford to travel by plane.  Then, in 1978, Congress "deregulated" the airplane industry and allowed the free market rather than government to set the prices, based on supply and demand.  The benefits were tremendous in enabling far more Americans to be able to afford air travel:<ref>http://www.econlib.org/library/Enc/AirlineDeregulation.html (emphasis added).</ref>

In the 1960s and 1970s, government set the prices for airline tickets, and only the wealthy could afford to travel by plane.  Then, in 1978, Congress "deregulated" the airplane industry, which allowed the free market to set the prices based on supply and demand.  The benefits were tremendous in enabling far more Americans to be able to afford air travel:<ref>http://www.econlib.org/library/Enc/AirlineDeregulation.html (emphasis added, citation omitted).</ref>

:Airfares, when adjusted for inflation, have fallen 25 percent since 1991, and ... are 22 percent lower than they would have been had regulation continued (Morrison and Winston 2000). Since passenger deregulation in 1978, airline prices have fallen 44.9 percent in real terms according to the Air Transport Association. ...  [W]hen figures are adjusted for changes in quality and amenities, '''passengers save $19.4 billion dollars per year from airline deregulation. These savings have been passed on to 80 percent of passengers accounting for 85 percent of passenger miles'''.  

:Airfares, when adjusted for inflation, have fallen 25 percent since 1991, and ... are 22 percent lower than they would have been had regulation continued. Since passenger deregulation in 1978, airline prices have fallen 44.9 percent in real terms according to the Air Transport Association. ...  [W]hen figures are adjusted for changes in quality and amenities, '''passengers save $19.4 billion dollars per year from airline deregulation. These savings have been passed on to 80 percent of passengers accounting for 85 percent of passenger miles'''.  

As the above example illustrates, the free market has the effect of giving great wealth to the poor.  Someone can have no money, or lose all his money, and yet if he tries then he can live nearly as well as the wealthiest man in the nation -- '''''if''''' the free market exists to drive down prices and provide equal opportunity.  The poor can enjoy the public parks and cheap land in rural areas rather than be confined in the traffic-congested and polluted cities where most of the rich are.  The poor can benefit from the low prices for food and travel caused by the free market.  But if the free market does not exist -- as in many countries of the world -- then the poor may go hungry and otherwise suffer, because prices are too high and opportunities are too limited for him to do as well.  One of the best ways to help the poor is to provide them with the free market in order to lower prices and increase opportunities for them.

As the above example illustrates, the free market lowers costs for the poor.  Wal-Mart is another example of this, as it provides goods at lower and lower prices for everyone.  This is very helpful to the poor.  Someone can have no money, or lose all his money, and yet if he tries then he can live nearly as well as the wealthiest man in the nation -- '''''if''''' the free market exists to drive down prices and provide equal opportunity.  The poor can enjoy the public parks and cheap land in rural areas rather than be confined in the traffic-congested and polluted cities where most of the rich are.  The poor can benefit from the low prices for food and travel caused by the free market.  But if the free market does not exist -- as in many countries of the world -- then the poor may go hungry and otherwise suffer, because prices are too high and opportunities are too limited for the poor to do as well.  Thus one of the best ways to help the poor is to provide them with the free market in order to lower prices and increase opportunities for them.

The free market can have an enormously beneficial effect on politics also.  In the United States, there is a system of "checks and balances" against tyranny:  the three branches of the federal government, Congress, the presidency, and the courts, check and limit the power of each other.  Also, the state governments and the people themselves (as through town hall meetings and free speech) check and limit the power of all three branches of the federal government.  But the free market may be the most powerful check on tyranny of all.  Government cannot easily control and limit what the free market supplies and demands -- as the example of the Tyndale Bible illustrated.

The free market can have an enormously beneficial effect on politics also.  In the United States, there is a system of "checks and balances" against tyranny:  the three branches of the federal government -- Congress, the presidency, and the courts -- check and limit the power of each other.  Also, the state governments and the people themselves (as through town hall meetings and free speech) check and limit the power of all three branches of the federal government.  But the free market may be the most powerful check of all against tyranny.  Government cannot easily control and limit what the free market supply and demand -- not even all the king's horses and all the king's men, and all the church authorities, could stop the Tyndale Bible, as discussed above.

So the next time you're flat broke without any job and facing a hopeless economic situation, remember this:  you still have the free market.  Put it to work for you, your family, and your evangelism.

The next time you're flat broke without any job and facing a hopeless economic situation, remember this:  you still have the free market, the most powerful tool of all.  Put it to work for you, your family, and your evangelism.

== What is Irrelevant to Supply and Demand? ==

== What is Irrelevant to Supply and Demand? ==