John Stuart Mill and Thomas Jefferson believed the concentration of political and economic power in the hands of government will lead to greater prosperity for everyone.

The history of U.S. government regulation of agriculture is a case study in how government can wisely use its power to make people richer and happier and how wise governemnt bureacrats can coordinate economic activity better than a free market.

During the 20th century, the general trend in the United States is to move closer to the ideas of Adam Smith about the role of government.

Adam Smith believed a strong powerful central government is a pre-condiditon for a smoothly functioning economy that produces a high standard of living for its citizens.

One method for organizing economic activity, i.e. deciding what is produced and how it is produced is the method used in the army. A central authority issues commands that are obeyed by people. These commands tell people what to produce, how much to produce, and who will produce what. An alternatve method of organizing economic activity is to rely on a free market. i.e. allowing people to engage in voluntary exchange where people are left alone to buy or sell only if they percieve it is in their self interest to do so and to let the market set the price of goods and services. There is no central authority telling people what to do and people are left alone to order their lives as they see fit. According to Milton Friedman:

Consider the pencil example from Free to Choose. In Friedman's pencil example:

Consider Adam Smith's invisble hand and how it relates to the idea of mutually beneficial voluntary exchange.

Allowing prices to fluctuate in an unregulated market:

In the United States, human capital or personal productive capacity, produces income for individuals when it is sold or rented in the marketplace. Ownership of property also generates income when things such as land, machinery, or other physical property is rented, leased, or used for the production of goods and services.