The US does not have a monopoly on intellectuals who have a utopian ideal of a free market economy. Perhaps some economists in Australia have been educated at the Mid-West temple which extols the virtues of a form of capitalism that has never existed. A recent publication in Australia argues that life in Australia is much better today because of free market capitalism and that it would be even better if government did less to improve the economy. There are two problems with that argument. In the first place, there has never been a free market economy in Australia or in any other country. It does not follow that the rising standard of living in Australia is the result of a utopian form of capitalism. Moreover, everyone would agree that the free flow of ideas is essential for innovations that lead to new products and services that are essential for economic development. Government plays an essential role in this process. This article describes one of the fallacies in the argument for a utopia with totally free markets.
One of the problems with ideas is that businesses would not attempt to develop them if they could not be protected with patents and copyrights. Governments play an essential role in awarding and protecting patents and copyrights. In fact, the protection of intellectual property rights is a critical component of most trade agreements that are negotiated by governments. Furthermore, public institutions provide much of the basic research and support for idea creation. For example, most of the pharmaceutical products in the US are dependent upon basic research that occurs in universities and public laboratories. Turning those ideas into products is the last step in the process of development. Government also protects society from products that may have harmful effects. One could argue that government could do a better job in this process but it would not occur at all without government support. We would have a form of capitalism without ideas.