The market is a virtual construct. There is no such thing as a "free" market- the market is controlled by humans, and exists under laws. Property rights are communally decided constructs- IE when someone digs up some coal and it then becomes his is not some divine self evident reality. It's just basic settlement by a bunch of humans. Had that person not dug up the coal, than anyone could- by digging it up and claiming it, he's merely redistributing wealth to himself. More particularly if a person walks in, claims some empty land and then charges the next person who comes (who likely didn't even exist when the land was originally claimed.) he can easily produce nothing and do nothing, but still be bequeathed with magical wealth for no reasons except legal technicalities. The reason a person can't just walk in and start using a random piece of owned land is purely based on legal processes. Simply put, property rights are, like government, a communal creation- A virtual reality that is based upon the real world, but not a part of the real world.
It can be expected that a person's efforts should support his own vision. First off, people are unlikely to try hard to make someone else's dream a reality. Second off, it is practically infeasible to manually control everyone's activities such that they fulfill a utilitarian greater good. Thirdly, it defies the entire purpose of being multiple people if one person controls another- you'd be better off with one person with twice the brain size. IE, a well designed economy must fulfill the role of providing the benefits of each person's action to the person who takes those actions. That said, a economy is a designed construct. There is no natural economy, and a failure to design an economy will only result in a randomly constructed economy. It's like building a house by putting stones on top of each-other rather than relying on brick and mortar.
So, once again, what makes a well designed economy? The short answer is one that provides results- one wherein everyone is as rich as possible. One wherein people can do jobs and actually produce products and services. One wherein jobs are done by those most fit to carry them out. That of course leads to the question of what economic model actually achieves these goals.
The answer there is somewhat difficult, and there's no real way to declare that some system or other is the peak of economic reasoning. That'd be like declaring that we've reached the end of physics and there's nothing more to learn. However, there is one thing for certain- systems of economics that have been tried and have failed will not succeed. Economic designs that don't compile won't work. Amongst these economic designs there are certain ones that repeatedly pop up, and receive vast support regardless of how many times they've failed.
Number 1- declaring oneself rich. It looks good on paper and is certainly the methodology that will get everyone the most money fastest. The problem is, without a link between money and wealth, money loses its value. Money is just a measurement. Trying to generate wealth by printing money is like trying to heat a room by increasing the mercury content of your thermostat. Of course, printing money is not the only way we generate imaginary wealth- Conjuring wealth in the present with some imaginary connection to production in the future is still just conjuring up wealth. You cannot be in debt to yourself. It is physically impossible. You cannot lend more than you have, nor can you lend the same wealth to multiple people. Wealth is a finite resource. Only one person can have it at a time. Any time one tries to defy the laws of physics with his economic policies, the only things he will change are the measurements produced by his devices. A physicist can easily simulate a process that reaches any result from any starting condition by controlling the rules of the simulation, but only by adhering rigidly to the rules based on reality can such a physicist build a plane that functions within reality.
Breaking the tools by which we view the economy will not spare the economy underneath. If we cannot tell who owns what, than resources will be quickly be consumed by the overwhelming masses of people who could somehow take some advantage of the resources, regardless of how small the advantage would be- not to mention masses of idiots who are simply too stupid to understand how to use the resources properly. If we cannot tell who produces what than we cannot discern between valuable workers who do their job and useless junk that should be routed to a better location where they can do more or dropped from the workforce altogether. We can't tell what services are necessary in the modern age and what services are obsolete refuse of the past.
Number 2- Relying on measurements besides those given to us by the economy. In essence, an economy is a set of variables used to measure the activities of wealth. They are your measurements. When they don't give you the results you want, you can't just use some other tool. It's like a scientist who turns away from his top of the line electron microscope and uses a obsolete microscope instead because the results given by that microscope coincide better with his theory. This is why the economy cannot be improved by redistribution of wealth. If a economic activity is useful, a well designed economy will tell us so. If something looks useful on the surface but the economy tells us it isn't, then it's not. When you walk into a room that looks safe, and your geiger counter tells you there's a lethal level of radiation, you leave. Fast. The same is true of a business that tanks. The economy is telling us that that business isn't working. Sure we can prop it up with subsidies and other nonsense, but it still will not make the business actually work. That said, economic success is not everything. For example, polluting the hell out of the environment may well lead to economic success (as demonstrated during the industrial revolution) but it will lead to a decreased quality of life. For this reason it is sometimes a good idea to redistribute wealth- But those who do so must always accept that they're hurting the economy. To gain a benefit, you must pay the price.
Number 3- Allowing economic exploits to replace economic activity. The fact of the matter is, no matter how fancy your telescopes are or how advanced your radiation detector is, instruments fail. Optical illusions and mechanical failure plague us all, and identifying these failures is a constant struggle. However, in economics we often find it attractive to cover up our instrument failures because the results given by the broken instrument are favorable to some group or look better in terms of long term results. The thing to remember about faulty data is the expected results will not happen. As such the instruments must be replaced or repaired as soon as possible whenever they break, lest they lure us deeper into miasma. We cannot allow a company to succeed just by shuffling money around (not to be confused with companies that invest cleverly and give important guidance to those of us around them.) A company that sells insurance and then uses technicalities of the agreement to avoid ever having to pay their customers is not an asset, even though it may succeed within the market. A company that patents as much random crap as it can lay its hands on and then acts like it was somehow involved in the production of various technologies that are related to these patents is not an asset. Worst of all, is when companies start popping up that sell services such as advising companies on how to avoid touching other's copyrights- It's not that such a company is a bad thing in and of itself, but that when a problem is so bad that you have to support both the problem and an anti-problem, then that problem is taking up a geometrically large part of your economy. (For instance, to get medical advice you must pay a doctor, who then gives part of his money to a insurer, who then takes a portion and gives it various lawyers and law firms that argue out various nonsense. We have to support 4 times the amount of people than the ones who actually do the job, not including taxes and other connecting expenses. Also note that the lawyers are powerful and smart, they're not just random people off the street. They're easily as capable as the doctors, and in a different environment would probably be doctors themselves.)
Number 4- Fearing the orders our economies give us. When a useful economic activity presents itself, the economy will jump on it, and there will be a boom. Inevitably, if replacing copper wire with optical fiber, the economy will surge while all the copper is replaced with optical fiber, and when the copper is finished being replaced the surge will end. When people have nothing to spend on they will invest, and as their investments bear fruit, the investors will spend on that fruit. (saving is a form of investment. From a larger perspective, if a person produces wealth, but does not consume an equivalent asset, than they are increasing the available pool of resources for everyone else in return for a future claim on the production thereof.) When work becomes useless people will stop doing it, and as the pool of available workers increases new and risky business enterprises grow more viable. Inevitably, some of these enterprises succeed and grow while most of them fail. The successful enterprises expand and pick up the resources made available by their failing siblings and then grow until their purpose is also rendered unnecessary. Just because incomes, spending or even production are decreasing should not lead to the inference that the economy is somehow failing. An economy is failing when potentially productive individuals are doing worthless jobs. An economy is failing when resources are squandered on overly expensive projects that give no results. An economy is failing when corruption out competes their non corrupt compatriots. There are danger signs of a failing economy- they're just not the indicators people are used to looking at. When you see bridges to nowhere and total incompetents on top of authority structures, that is the sign of a ailing economy.
In short, the economy is a set of measurements, an instrument through which to see the world. Not using these instruments is like trying to win a war without using guns or bombs. As such, what we should aim for is not precisely a free market- all markets are controlled in complete form by government/society, but a pure market. A market is like a radio, and will prosper when the signal to noise ratio is favorable and will fail when the noise grows so loud that the signals no longer make sense. As such a well designed economy is a clean one- one where the rules do not stop investors and entrepreneurs from finding capital and employees while the corrupt and manipulative do not out compete the honest and productive. In essence, a economy where we can see the true nature of our leaders and providers, and can as leaders see our followers and resources.
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