The free market is undoubtedly the most democratic part of our society. But it is deeply flawed in several respects. Firstly it relies on rational individuals making informed decisions. Obviously most people just aren't that well informed or rational. This simple observation explains the current economic malaise, but it isn't what I want to write about.
The second way the free market is flawed is that we don't pay for many things. Money is simply a convenient medium to compare the worth of different quantities. There are however things we just do not put a price on. I'm going to look specifically at children.
The most valuable thing any of us can produce is not a building, a car or a company. It is offspring. Society should, and indeed does, value children to a great extent. But people are vilified for raising many children and living off the state. The state, on the individual's behalf, has a vested interest in children so why shouldn't we collectively pay for it? Well we do, through tax credits and benefit.
Because we don't price children (quite rightly!) we can never put a fair value on them. Surely society is be better off with well raised children compared to poorly brought up children. After all they are likely to be more productive in the long run. But we can't, and should not ever try, to price a child. It is therefore impossible to make an informed decision as to best allocate resources with regards to children. Should parents be paid to take time off work? Would that be an effective way to spend society's resources? We will never know.
The point of this rather fascist sounding piece is to point out that a capitalist system really needs the welfare state. Goods, resources and activities are always best treated when they are efficiently priced.
You can't put a price on some things.