A free market devoid of all government intervention would hurt the U.S. economy

The topic is: A free market devoid of all government intervention would hurt the U.S. economy. I started this same debate, but my opponent forfeited. I've literally cut and paste from my other debate. First round includes substantive arguments. In order to win this debate, I must show at least one example of a government intervention into the free market that, if removed, would harm the economy. I will present three such examples: patents, insider trading, and market externalities, 1. Patents Currently, the U.S. Constitution permits the federal government to issue patents and copyrights for a limited duration. This is an intervention into the free market, because it prevents competitors of the patent holder from engaging in a competing enterprise. However, in the absence of such grants, the economy would be harmed because there would be less of an incentive for companies to develop new pharmaceuticals. Although invention occurred before the issuance of patents and copyrights, much of the innovation of the 20th century, particularly in the area of pharmaceuticals, occurred because patents permitted the holder to guarantee a period of economy prosperity, which in turn justified the development of new products. In the absence of patents, there would be a substantially reduced incentive to develop new drugs, which would harm the economy. 2. Insider Trading Federal laws prohibit the use of "insider information" to make decisions about buying and selling shares on a market exchange. Although the set of rules surrounding insider trading is beyond the scope of this debate, it generally prohibits people who have non-public information from using that information to buy and sell stock (usually of a company that they work for or are affiliated with). This is an intervention into the free market, because a totally free market would permit people to buy and sell stock using whatever information they have available. However, if insider trading was permitted, many investors would not have sufficient confidence in the stock market to invest their funds. Investing money into the stock market is always considered a risky venture because most companies have the potential to go bankrupt. However, most investors rely on publically available information to make their investment decisions, and feel confident that the market price accurately reflects all available information. If "insiders" such as corporate executives have access to secret information, such as the fact that a new product is likely to fail, or the company is about to be purchased by a competitor, they can use that information to make a large profit. The result is that "outsiders" stand to lose significant money in their investments. If this occurs often enough, investors will begin to lose trust in the system, and may choose not to invest their money in the stock market entirely. The stock market is the primary method of raising capital for corporations, and a lack of capital would hamper productivity, which harms the economy. 3. Market Externalities A market externality is a cost placed on someone other than the person who receives the benefit. For example, a company which dumps toxic waste into a river gets a benefit (a cheap place to dispose of waste), which people downstream on the river get a cost (it damages their land). Currently, the federal government regulates interstate waterways to prevent the dumping of toxic waste. This is an intervention into the free market, because a truly free market would not prohibit a party from maximizing its profits. However, if market externalities are not regulated by the government, the country will actually lose productivity. In a scenario where there are no controls on pollution, companies have an incentive to destroy common lands, such as rivers, public fields, and the atmosphere by disposing of their waste products. This is efficient for a company, because they don't bear the full cost of the waste disposal, yet receive all of the benefit. However, this leads them to pollute more than if they did have to pay the full costs. The result is that there is more pollution than optimal. If this reaches extreme levels, short sighted companies could permanently damage waterways and the atmosphere, which would significantly harm the economy. Conclusion Although most people would agree that there should be some government interventions into the free market, others take an absolutist view that there should be no such interventions. I believe I have demonstrated three reasons why, at the very least, there should be some interference with the free market.