Economists' reflection on free market



Table of Content

Introduction……………………………………………………………….. 3

Discussion………………………………………………………………… 3

Free Market……………………………………………………………….. 3

David Ricardo reflection to free market………………………………….. 4-6

Characteristics of free market ……………………………………………. 4

Free market brings technology and transportation………………………... 5

Transformation of intellect and knowledge……………………………….. 5

Karl Marx and free market ……………………………………………… 6-7

Counter Argument on Karl Marx………………………………………… 7-9

John Stuart mill & free market ………………………………………........ 8

Pro- free market corroboration …………………………………………… 9-10

Conclusion………………………………………………………………… 10

References………………………………………………………………… 11

Economists' reflection on free market

Introduction

Free market is allied with democratic participation. In a free market, the prices, supply and demand are controlled directly. In, this contemporary world free market is also linked with capitalism. Various theories required specific properties of free market. In market, the demand & supply is controlled by the price. Free market is also known as a market place where there is no government intervention. Government does not dictates how the market will function in a free market. A completely free market is a market where buyers and seller are allowed to transact easily, without any government intervention. In simple terms, free market is a place where the exchange of trade performed without any problem. The trade which is free, from government taxes and free price control is one of the biggest factors of free market. A perfect example of free market is perfect competition, where the information is perfect, no barriers to new entrant and firms are price takers (Ayal, et, al, 1998).

Discussion

Free market

The term “free market” is defined as a place where buyers and sellers have the freedom to perform trade activities without government interventions. In a free market, there is no, or very minor interventions of government. In simple terms, free market is a place where the exchange of trade performed without any predicament. The trade which is free from government taxes and free price control is one of the biggest factors of free market.

David Ricardo reflection to free market

David Ricardo is regarded as one of the finest economist of the modern world. He is the son of Jewish person, who migrated to London from Holland. Adam Smith the father of economics supposed that, when counties are trading one country has the competitive advantage on other. The countries that specialize in production have a competitive advantage on the other country that is not specializing in the production. David Ricardo is considered as a genius individual who believes in a free market. Ricardo claimed that both countries will get the benefit from trade, even though one country is unspecialized. The specialization helps in escalating the total number of outputs, which helps other countries to share this output. Ricardo specialization concept is regarded as one of the most important contribution in economy. His concept is appraised by most of the economist, when they relate globalization with economy (Hollander, 1979).

There are some assumptions of David Ricardo on free market. Ricardo concept is so powerful that his concept can even be proved without the assumptions. The first assumption of Ricardo is, the resources (land, labor & factories) should not move from country “x” to ...