Suppose a stateless wanderer can choose citizenship in one of two unnamed lands.

Only two facts are known: One is a healthy democracy. The other has a thriving free market.

Which should the wanderer choose?

"I just want the most freedom," they say. But how will this be judged? Freedom, of course, means many things, and the importance that we assign to various liberties—freedoms to trade, to move, to speak, and so on—differ widely from person to person.

Suppose, then, that our pilgrim decides to play it safe. Rather than maximize any particular freedom, they choose to minimax, to limit their maximum losses and avoid their worst outcome—namely, the gallows.

Our friend would do well to choose democracy. Stable democracies—formally, at least, governed by political equals—remain the most powerful technology yet devised for protecting individual lives. Experience proves this better than we can explain it; surely much credit goes to liberal rights protections and the liberalizing drift of equal citizenship. Democracies are not infallible. Nor are they more efficient. But their safeguards tend to be most robust.

Laissez-faire, meanwhile, leaves the wayfarer precarious. Any genuinely free market will have norms or rules that allow for predictability in the general run of affairs; without these it wouldn't be a market for long. These rules may be codified into law, but they needn't be. History abounds with examples of commerce beyond state control. General predictability, however, does little to minimize the maximum risks, and these may be very great indeed.

Many a market exists by the grace of a tyrant. How many regimes allow trade only from the end of a leash? However benevolent the despot, however many Chicago economists are consulted, the implicit threat never varies: “Spend and buy what you wish! But only so long as I wish it.”

Happily for our wanderer, of course, democracy and markets can coexist well.

As Robert Dahl noted long ago, every extant democracy is also a market economy.

The opposite does not hold.

First drafted December 2021
Last revised January 2026