MARKET ECONOMY

Market Economy



Market Economy

Introduction

Market economy system, in which economic agents (companies, individuals), have the freedom to sell and buy goods, services and capital. Everyone then acts according to its interests; profit, considered positively, is listed as the risk reward. Advocates of the market economy believe that such a "laissez faire" promotes economic growth. A market economy is opposed to a planned economy in which all major decisions are taken by the State. In most companies, the market economy is combined with restrictions or guidelines imposed by the state for a better functioning market. Such an economy is not incompatible with the existence of social programs and a state interventionist, unless it exceeds a certain limit. In most market economies, the largest share of goods is governed by the market economy. Some sectors-education, health, transportation, however, can be assumed by the State or by the logic of a planned economy. Synonym: economy capitalist, free market.

You cannot do deals in the market rules: they are intrinsically linked, they form an indivisible whole. A partial implementation of risk away from the optimum rather than closer: this is one of the reasons for the failure of Gorbachev's perestroika. As Janos Kornai showed about Hungary, the attempts of a "market socialism" inspired by Oskar Lange are complete failures (failure to establish a hard budget constraint within the company, for example). While the planned economy based on a static approach to the economic balance, the advantage of the market economy is the speed of adjustments in the face of conditions that are constantly evolving. It is not known. As individualism with which it interacts with complicity, the market economy appears to be growing constantly throughout history from unknown origins. There are seven or eight centuries, the Italian cities were already implementing most of the rules mentioned above. Some economists (in particular the current Austrian) use Popper's image of a trail in the forest: the market is too complex to have been invented, there is no great architect. The market would have built our intelligence; it is not our intelligence that would have built the market. For other authors, the market is a social construct that depends on the institutions and requires a conscious adherence of economic agents. The market space extends past few decades in geographic space with gradual opening of China after 1978, India has since 1991 and in the social space - many services that were not traditionally traded pass into the market order. Challenging the market economy, which itself is a thriving market, seems paradoxically reinforce it. Forecasts re-embedding of market processes in political processes or extinction contractors or Marx (the downward trend in profit rates) have generally not been verified, at least not permanently. It is true that, for the last two references, technical progress has not slowed and there is an opportunity for new profit opportunities for entrepreneurs who can make the connection between scientific discoveries, new modes of production and new consumer goods. 

The heart of the market economy consists of ...