[This article originally appeared on the American Institute for Economic Research website on September 12, 2017.] Critics of the free economy often complain that the market fails to “behave” as economic theory predicts. Hence the voluminous literature on “market failure” (which sparked a substantial public choice literature on “government failure” and the need for comparative institutional analysis). But critics also fault the free economy for behaving exactly as the theory predicts. Hence the outcry against “price gouging” during natural and manmade disasters. The market is damned when it...













