Free market

A free market is an idealised market where all transfers of money, goods, and services are devoid of coercion and theft (some definitions of "coercion" are inclusive of "theft").

Related Topics:
Market - Coercion - Theft

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The free market is an abstract model, as is treated as such by economists, who often speak simply of the market. Free market economy is a descriptive term for the economic system in a particular territory, usually a nation-state. It implies that the economic system approximates the ideal model. It might be described as less free than others, or as 'relatively free', according to the criteria used. The degree to which a given economy is in fact free, is a disputed political issue: libertarians typically say that western economies are not free, and are at best a mixed economy. Whether the economy should be free in these terms, is also disputed, and that is one of the most important issues in the modern political spectrum. Internationally, free markets are advocated by proponents of economic liberalism, in Europe usually simply called liberalism. In the United States, support for free market economic structures is a key tenet of U.S. conservatism and libertarianism. Since the 1970's, promotion of a global free-market economy, deregulation and privatisation, is often described as neoliberalism.

Related Topics:
Abstract model - Economist - Nation-state - Libertarian - Mixed economy - Political spectrum - Economic liberalism - Liberalism - United States - Conservatism - Libertarianism - Deregulation - Privatisation - Neoliberalism

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The term free market economy is generally used to describe western economies, but pro-market groups would only accept that description if the government practices laissez-faire policies, rather than state intervention in the economy. Since the emergence of a distinct economic system in the Soviet Union, the free market is usually contrasted to a command economy and a centrally planned economy. However, early proponents of a market economy in 18th-century Europe contrasted it with the mediaeval and early-modern economies which preceded it.

Related Topics:
Laissez-faire - Soviet Union - Command economy - Centrally planned economy - 18th-century - Mediaeval - Early-modern

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

For social philosophy, a free market is a system for allocating goods within a society: supply and demand within the market determine who gets what, and what is produced. The market does this without prior external decisions or values, and this is seen as its great advantage by its supporters. The allocation function is usually called "the market mechanism", or again simply "the market".

Related Topics:
Social philosophy - Allocating - Supply and demand

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

A free market economy is generally understood to be different from pre-modern economic systems. Some were monetarised but that is not seen as sufficient to define a free market. Market transactions are understood to be economic in nature, and personal gift-giving is not generally considered a market transaction. Neither are coerced transfers such as tribute. Lack of economic transactions, for instance in a society of pure subsistence farming, also rules out a free market.

Related Topics:
Pre-modern - Monetarised - Transactions - Gift-giving - Tribute - Subsistence farming

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

A free market implies the presence of competition, although de facto monopolies can be present. It often connotates the presence of the profit motive, although neither a profit motive or profit itself necessary for a free market. All modern free markets are understood to include entrepreneurs, both individuals and businesses. Typically, a modern free market economy would include other features, such as a stock exchange and a financial services sector, but they do not define it.

Related Topics:
Competition - Monopolies - Profit motive - Entrepreneurs - Businesses - Stock exchange - Financial services

~ ~ ~ ~ ~ ~ ~ ~ ~ ~