If you've never read the great short story entitled I, Pencil, then you should really check it out. It is an amazingly well-written piece about how free markets and collaborative efforts work in this complex world. And, as the author says, you will come to see that there really is nobody in this world who knows how to make a pencil.
This quote near the end of the essay brings to light why free markets will always perform better than the government.
"Why, in this area where men have been left free to try, they deliver the human voice around the world in less than one second; they deliver an event visually and in motion to any person’s home when it is happening; they deliver 150 passengers from Seattle to Baltimore in less than four hours; they deliver gas from Texas to one’s range or furnace in New York at unbelievably low rates and without subsidy; they deliver each four pounds of oil from the Persian Gulf to our Eastern Seaboard—halfway around the world—for less money than the government charges for delivering a one-ounce letter across the street!"