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Name: Yuen Man Chun Edwin
Class: 4C
Class number: 42
A free market is a market in which there is no economic intervention and regulation by the state, except to enforce private contracts and the ownership of property. It is relying on the mechanism of private ownership. A free-market economy is an economy where all markets within it are unregulated by any parties other than those players in the market. In its purest form the government plays a neutral role in its administration and legislation of economic activity. However, an economy in this form has never existed.
We can define the meaning of “free market” in two aspects.
Economic philosophy
In an ideal free market, property rights are voluntarily exchanged at a price arranged solely by the mutual consent of sellers and buyers. By definition, buyers and sellers do not coerce each other, in the sense that they obtain each other's property rights without the use of physical force, threat of physical force, or fraud, nor are they coerced by a third party (such as by government via transfer payments). Price is the result of buying and selling decisions en masse as described by the theory of supply and demand. In a free market, the system of prices is the emergent result of a vast number of voluntary transactions, rather than of political decrees as in a controlled market. The freer the market (the theory goes), the more truly the prices will reflect consumer habits and demands, and the more valuable the information in these prices are to all players in the economy.
Social philosophy
A free-market economy is a system for allocating goods within a society: purchasing power mediated by supply and demand within the market determines who gets what and what is produced, rather than the state. A free market may refer narrowly to national economies, or internationally; specific reference to international markets is referred to as free trade (for goods) or lack of capital controls (for money).
Class: 4C
Class number: 42
A free market is a market in which there is no economic intervention and regulation by the state, except to enforce private contracts and the ownership of property. It is relying on the mechanism of private ownership. A free-market economy is an economy where all markets within it are unregulated by any parties other than those players in the market. In its purest form the government plays a neutral role in its administration and legislation of economic activity. However, an economy in this form has never existed.
We can define the meaning of “free market” in two aspects.
Economic philosophy
In an ideal free market, property rights are voluntarily exchanged at a price arranged solely by the mutual consent of sellers and buyers. By definition, buyers and sellers do not coerce each other, in the sense that they obtain each other's property rights without the use of physical force, threat of physical force, or fraud, nor are they coerced by a third party (such as by government via transfer payments). Price is the result of buying and selling decisions en masse as described by the theory of supply and demand. In a free market, the system of prices is the emergent result of a vast number of voluntary transactions, rather than of political decrees as in a controlled market. The freer the market (the theory goes), the more truly the prices will reflect consumer habits and demands, and the more valuable the information in these prices are to all players in the economy.
Social philosophy
A free-market economy is a system for allocating goods within a society: purchasing power mediated by supply and demand within the market determines who gets what and what is produced, rather than the state. A free market may refer narrowly to national economies, or internationally; specific reference to international markets is referred to as free trade (for goods) or lack of capital controls (for money).