Economic Systems: Market Economy

BERLIN – “There can be no tyrants where there are no slaves.” Quoting national hero Dr. Jose Rizal, President Aquino called on Filipinos to celebrate freedom from dictatorship as the government strives to make every citizen truly free – first and foremost from hunger and poverty. Aquino discusses the importance of a country’s freedom and how the Philippines achieved its freedom through peaceful means. One of the privileges of this acquired freedom is that we are able to have an economic system which is well known for its competition and consumer independence; the market economy. The government has absolutely no authority to interfere with the business activities of people. They also cannot control the choices of the consumers nor could they decide what the producers would manufacture; therefore, they also cannot predict the outcome of these decisions. When economic problems arise, the government will not be held responsible because the private sectors and individuals are the ones taking action to resolve these problems.
This economic system is by far the best when it comes to achieving effective allocation of resources. Driven by the profit that they are going to make, firms are doing their best to produce goods and products that cost less but, at the same time, they are also making sure the products do not lose its quality and efficiency. This is because the market economy has a free price system that determines the price of goods set by the interchange of supply and demand. Through the free price system, supplies are rationed, income is distributed, and resources are allocated, meaning there is little to no waste in resources. Compared to the command economy, where there is very limited production since only one person decides for the needs and wants of everyone. Being a free market, companies and firms would be able to produce what the majority of people want because this would make them profit; if they were to manufacture goods which the people have little