Does economic theory prove that the free market system is best? Why?

It's B.The best means only in terms of efficiency. It is correct that the other system will be a miscalculation. But it cannot prove that the market system will yield equality. It still requires the big trade off between efficiency and equality. No theory will not prove that it is the best in one or another.

According to me, economic theory does not take sides. It deals, chapter by chapter, how various systems work. It does not conclude saying " therefore, go for free market system". It is a conclusion which the student of economics has to reach on his own. In India, we had a controlled economy till 1991. We have liberalisation from 1992 onwards. We have seen the results. We have seen more growth in the last 20 years than in the first 44 years. The per capita income has gone up. People have more goods to enjoy. In countries like Russia and East Germany, communism has failed and has wound up. We can see the poverty in such countries. China is another communist country, where everything is state owned which is still grappling with growth. However, free market economy does not automatically guarantee results. There need to be robust systems in place to regulate where necessary.

It's 4, you need a balance, free market is great, but you need to protect the people inside that system, or you'll create a spiraling problem, that at some point, will lead to civil-war(you can only exploit people for so long). 2. is especially creepy, because 'achieve optimal outcomes' means someone, will destroy someone else to maximize profits. 3's naive, there's no transparency in any system, it's why banks are still protected, it's why bonuses are paid to CEO's who destroyed their own company, it's why the rich get a 'million dollar pension gap payment', and a factory worker goes to jail for stealing. 1. It fails to highlight the human side, which is very, very under-rated in economics.Harmony is more profitable, which gets lost a lot in economics.

According to me, economic theory does not take sides. It deals, chapter by chapter, how various systems work. It does not conclude saying " therefore, go for free market system". It is a conclusion which the student of economics has to reach on his own. In India, we had a controlled economy till 1991. We have liberalisation from 1992 onwards. We have seen the results. We have seen more growth in the last 20 years than in the first 44 years. The per capita income has gone up. People have more goods to enjoy. In countries like Russia and East Germany, communism has failed and has wound up. We can see the poverty in such countries. China is another communist country, where everything is state owned which is still grappling with growth. However, free market economy does not automatically guarantee results. There need to be robust systems in place to regulate where necessary.

It's 4, you need a balance, free market is great, but you need to protect the people inside that system, or you'll create a spiraling problem, that at some point, will lead to civil-war(you can only exploit people for so long). 2. is especially creepy, because 'achieve optimal outcomes' means someone, will destroy someone else to maximize profits. 3's naive, there's no transparency in any system, it's why banks are still protected, it's why bonuses are paid to CEO's who destroyed their own company, it's why the rich get a 'million dollar pension gap payment', and a factory worker goes to jail for stealing. 1. It fails to highlight the human side, which is very, very under-rated in economics.Harmony is more profitable, which gets lost a lot in economics.