WRO,
You think the price we pay for national security is an example of economic efficiency? Maybe an accidental poor example on your part, but I couldn't let it pass.
Inefficiency is one of the prices we pay for democracy. Democracy, by design, is slow and inefficient, yet it better represents our pluralist interests than any other governmental arrangement.
Getting back to your free market, the model of free market of capitalism isn't flawless. It permits oligopolies to become monopolies and allows them to gain a major control of government by purchasing it (as in, we have the best Congress money can buy), and create social economic collapses just like what our government has been dealing with for the past year or so. A totally free market is just as undesirable, from a social economic outlook, as a totally controlled socialist, communist, facist, etc. model. A balance of economic freedom and government control is necessary to create the most desirable mix of social and economic benefits to all citizens, not just the most lucky, resourcefull, ambitious, and greedy. Since those values are largely subjectively defined, we won't agree on the mix, so in a pluralistic society it stays in flux, but absent a reasonable dose of freedom and economic controls, we're screwed.
Sg