Matt Evans
The writer of the letter to the editor was typical of those normally published in the paper. The writer had no real conception of economics or how markets work. His concern – one that is certainly shared by many these days – was that 401(k) and other retirement plans were declining in value. The writer’s concern was valid, of course. The current economic downturn has damaged the retirement savings of many people.

Where the letter went off the rails, however, was the writer’s assertion that the “free market” had somehow left these retirement accounts vulnerable. Unfortunately for the letter writer, retirement accounts in American operate under anything but a free market. Government rules and regulations limit who can open a retirement account, who can serve as a custodian for a retirement account, how much an individual or employer can contribute to a retirement account, what kind of investments a retirement account can contain, and on and on.

It is fashionable these days to blame all our problems on the free market. There are many causes of what’s happening, but the truth is there are very few portions of the American economy that operate in a truly free market. When seeking solutions to these problems, we should look to people who understand the difference between a free market and a government-regulated one.