War also works, to a certain extent, as a source of truth to align incentives with outcomes. But it's horribly expensive even in terms of economics alone, not to mention the human tragedy.
Luckily free markets work as a backstop, too. Add in free movement of people (who often want to come to better run places), and free movement of capital, and you have a winning combination.
Another stroke of luck: even if you only implement a very partial version of 'free', you still get partial benefits. Slightly freer markets are typically slightly more efficient. It's not an all or nothing proposition.
War also works, to a certain extent, as a source of truth to align incentives with outcomes. But it's horribly expensive even in terms of economics alone, not to mention the human tragedy.
Luckily free markets work as a backstop, too. Add in free movement of people (who often want to come to better run places), and free movement of capital, and you have a winning combination.
Another stroke of luck: even if you only implement a very partial version of 'free', you still get partial benefits. Slightly freer markets are typically slightly more efficient. It's not an all or nothing proposition.