Hey,
I wondered the same thing not that long ago, I kept looking and investigating and it really seemed as though the market was the best solution every time. Then something came to me and it was this: if the market was the best in every case because of the specific factors of that case then this would mean that there was no overriding reason why it is that the market was a superior system. Although this was the opposite of what I wanted to hear I may have accepted it if it weren’t for one thing: Why was the market already superior in so many instances? How could this be a coincidence?
So there is one major factor and two minor factors here. All of these are in terms of economic efficiency however; I’m among the crew who believes natural rights are bunk.
The major factor takes us back to the beginning, it takes us all the way back to Adam Smith and his argument that people will mutually benefit through trade because of the fact through mutual self interest the buyer will buy what he value most and the seller will sell what he values least, thusly we can see that both individuals benefit. This creates the invisible hand; it creates a mutual string of exchanges and valuations all of which reward individuals for satisfying the wants of their fellow men. It not only creates this incentive bu it will have a tendency to root out any individual or groups of individuals who fail to do this, most importantly through this will to satisfy the wants of consumers a medium of exchange arises and there is suddenly a way to rationally economically calculate what is most wanted by actual people, not what they say that they want. There are a few other essential elements to this system: entrepreneurship and the ability of every individual with a good idea to enter the market, consumer sovereingty and the ability of every consumer to spend what he wants where he wants, profit and loss to guide resources into those areas of the most importantly held wants, rational investment which leads to long run healthy growth, and freedom of mobility and movement to trade on any market.
The scary thing is that the government impedes on all of these things in one way or another.
So then I have some minor factors
The main alternative, government, has the opposite of the market incentive. It has no way to rationally calculate (unless it runs itself like a business in which case the money would either have probably had money lent to it anyway or else the risk was not worth the amount of money it took), it cannot determine success or failure through any calculative means (unless run like a business but even then it will either often restrict competition or bail itself out), it does not reward successful individuals, in a representative democracy it is only interested in short term benefits, and it’s open to every political fancy of the time. It’s pretty much madness.
Thusly in the vast majority of cases where the government COULD run itself properly, in cases of natural monopoly, it has very little reason to do so. This is where my idea of social entrepreneurship comes into play although it’s existed long before.
Entrepreneurs are individuals who take risk in order to fulfill their goals, they are pioneers, creators, risk takers. When we think of them however we usually think of financial and capitalistic entrepreneurs. There is no reason why we should only think of this kind of entrepreneur, why not social entrepreneurs who try to look out for perceived interests of society and not for profit? Then I realized that social entrepreneurs exist, but for the most part they are swallowed up by government and almost all of the above problems apply. Either those eager to aid society join some government apparatus or they never emerged because they believed that problems in society are being taken care of by the government. This is why the government must be done away with altogether or marginalized as much as possible. In its absence there would be social entrepreneurs who will attempt to help those who they and other consumers feel are not helped enough by the normal capitalistic system. This is how for instance; charities are formed and other non-profit organizations. If government did not exist or was minimal the ranks of these organizations would swell.
Thusly any “natural monopoly” problems can be dealt with by social entrepreneurs as much as possible, they can be the ones who attempt to lower these prices either by buying roads or by paying entrepreneurs to lower price or ECT. The difference between these organizations and government organizations is that there would be nothing forcing people to pay into them, people could choose which organization they would wish to support and thusly competition could emerge between these organizations to satisfy consumer demand, they would have budgets and therefore could not spend dramatically, and so bureaucracy and the like would all be kept to a minimum for this reason.
So the market is superior for one main reason: The fact that through exchange it creates a system in which people are rewarded for serving others in the most efficient way possible. It is also superior for two other less important reasons, the first of which is that government has no incentive or even ability to do anything the market does, and secondly that it also allows people to produce in whatever way they see fit in a still competitive and voluntary environment in order to satisfy what they see as social wants.
Other Random Thoughts
People criticize the market for being too individualistic. I sometimes criticize it for being too collectivistic, it forces the strongest and most capable members of society to satisfy the wants of others if they want to live as well as they could or continue on indefinitely, the greatest and most special members of society are forced to yield to the will of the masses.
Similarly to democracy, capitalism is production for the masses, but it has one major difference in this respect, and that is that it is production for everyone, not just the masses and not just with a one size fits all solution. As long as there’s a large enough market for it, it will come into existence, you don’t have to have a model T and it need not be black, you can have whatever you want. Government is infamous for only giving you the black model T.
The choice is up to society, to choose between inefficient force and efficient voluntarism.