FREE MARKET

Free Market Society

Free Market Society

Introduction

The free market can be defined as the system in which the price of goods or services is agreed by consent between sellers and consumers, through the laws of supply and demand. It required for implementation of the existence of "free" competition, which in turn requires that participants in a business transaction has no coercion or fraud, etc., or, more, that all transactions are voluntary. This paper discusses the free market society and its background.

The Free Market

The term free market economy is used in two usual ways: as a policy proposal, in turn with two senses: first as a desideratum or prescription of an ideal state to pursue, and a second more descriptive sense which is related to the degree to which a given economic system, whether at a given country or economy in general, approaching the idealized model. From this perspective, particular economic systems have been described as "free economy" even when the state intervenes in the economy, provided that such intervention is within certain limits.

Thus, the terms capitalism, free economy Mixed market and economy are, from this perspective, virtually indistinguishable terms. However, and perhaps obviously, not everyone agrees: "But the image that many people have the" market economy "probably already is a mixed economy, as suggested by the fact that majority support even more important strong state regulations. That substantial minorities strongly against the market, explains why we live in a mixed economy and not in a free economy (Altvater, 1993, 57)."

For the proposed general function the government is arguable. Ideally the use of force or coercive power of the state in the market is limited to protect market participants from coercion and / or abuse by third parties, including protection of property rights and enforcing contracts. What exactly is meant by abuse is open to interpretation. For example, Adam Smith, the externalities generated negative the possibility that some others transferred at least part of the cost of their activities, thus obtaining extra personal benefits, while the possible acquisition of positive benefits without contributing (see the free-rider problem).

In Smith's view, this and other similar problems require the existence of a body (the state) that can solve, which in turn implies a certain degree of state intervention (Sanford, 1997, 11). Although the game theory is not applicable to the proposed free market "pure", some propose that the essence of the free market can be understood as a game in which players compete according to a set of rules that prevent coercion (including theft) compliance with these rules may be supervised by a neutral arbitrator (government). However, this suggestion leads to perceptions closer to those of the Social Market Economy, which are not universally accepted as implementing a free market as understood.

Background

Malthus, as part of reaction to French revolution, set out to disprove the impossibility of what he called the perfectibility of society. The objection was not one of desire for such a society but rather that it could not be ...