Mises draws the crucial distinction between voluntary exchange and coercive power. The market is built on consent—every exchange benefits both parties or it doesn't occur. Government is built on compulsion—it can force people to act against their preferences through taxation, regulation, and prohibition. The attempt to use government to 'improve' on market outcomes necessarily involves forcing some people to serve others' goals rather than their own. This is both inefficient (because it overrides market signals) and unjust (because it violates individual rights). The proper role of government is strictly limited to protecting rights, not to redistributing wealth or regulating peaceful behavior.

The sovereignty of consumers in the market means that entrepreneurial alertness is directed toward satisfying consumer wants. Entrepreneurs prosper by discovering what consumers want and providing it better or cheaper than others do. This entrepreneurial process continuously improves the menu of options available to consumers. When government intervenes, entrepreneurial energy is diverted from genuine value creation to political rent-seeking—seeking privileges, subsidies, and protection from competition. This diverts talent from productive to unproductive activities, slowing economic progress while corrupting the political system through the influence of special interests.

The contrast between market and government is fundamentally about the source and limits of power. In the market, power is fragmented and limited—no one can force anyone else to buy or sell. Even the largest corporation cannot make you a customer if you don't want to be one. Government, by contrast, monopolizes coercive power. This is necessary for protecting rights, but it's dangerous because concentrated power tends to expand and be used for purposes beyond rights protection. Constitutional limits and the rule of law are essential to keep government within bounds, but they're constantly threatened by those who want to use government power to achieve their preferred outcomes.

The futility of interventionism is not an empirical generalization but a praxeological truth. Interventions necessarily disrupt the coordinating function of prices, leading to systematic misallocation of resources. Price ceilings create shortages, price floors create surpluses, and each intervention creates pressure for further interventions to address the problems created by the first. This cumulative process leads either back to a free market or forward to total socialism. The 'middle way' of interventionism is an illusion—a temporary state that must give way to one extreme or the other. Understanding this praxeological truth is essential for resisting the perpetual calls for 'just this one intervention' to fix some perceived problem.

Interventionism fails because it suppresses the entrepreneurial discovery process. Each intervention closes off profit opportunities that would have alerted entrepreneurs to better ways of serving consumers. The resources that would have been reallocated through entrepreneurial arbitrage remain in less valued uses. Over time, these suppressed opportunities accumulate, leaving the interventionist economy increasingly misaligned with actual consumer preferences. The economy becomes sclerotic, unable to adapt quickly to changing conditions because the entrepreneurial feedback loop has been interrupted. Free markets succeed not because they achieve perfect equilibrium, but because they continuously discover and correct misallocations through entrepreneurial profit-seeking.

The futility of interventionism stems from the knowledge problem. Government interveners don't possess the dispersed knowledge embodied in market prices. When they override market outcomes, they're substituting their limited knowledge for the collective knowledge of millions of market participants. The result is necessarily inferior resource allocation. Moreover, interventions create dynamic problems: they disrupt the discovery process through which markets adapt to change. Even if an intervention achieved its immediate goal (which it usually doesn't), it would prevent the entrepreneurial adaptations that the market would have generated, leaving the economy less flexible and resilient than it otherwise would be.