free market capitalism vs capitalism

Under capitalism, consumer prices are determined by free market forces. Socialists argue that this can enable businesses that have become. Its specific focus was on defending the political values of an open society, rule of law, freedom of expression and free market economic. scarcity, traditional economy, command economy, market economy, B. Capitalism, also called a free enterprise system, is based on private ownership and. free market capitalism vs capitalism

: Free market capitalism vs capitalism

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The main difference between capitalism and socialism is the extent of government intervention in the economy.

A capitalist economic system is characterised by private ownership of assets and business. A capitalist economy relies on free-markets to determine, price, incomes, wealth and distribution of goods.

A socialist economic system is characterised by greater government intervention to re-allocate resources in a more egalitarian way.

There are also different aims of the economic systems.

Equality

  • Capitalism is unconcerned about equity. It is argued that inequality is essential to encourage innovation and economic development.
  • Socialism is concerned with redistributing resources from the rich to the poor. This is to ensure everyone has both equal opportunities and in some forms of socialism – equal outcomes.

Ownership

  • Capitalism – Private businesses will be owned by private individuals/companies
  • Socialism – The state will own and control the main means of production. In some models of socialism, ownership would not be by the government but worker co-operatives.

Efficiency

  • Capitalism. It is argued that the profit incentive encourages firms to be more efficient, cut costs and innovate new products that people want. If firms fail to keep up, they will go out of business. But, this business failure allows resources to flow to new more efficient areas of the economy. Something known as ‘creative destruction’
  • Socialism. It is argued that state ownership often leads to inefficiency because workers and managers lack any real incentive to cut costs. One joke under Soviet Communism was ‘They pretend to pay us. We pretend to work.’

Unemployment

  • In capitalist economic systems, the state doesn’t directly provide jobs. Therefore in times of recession, unemployment in capitalist economic systems can rise to very high levels, e.g. 20% + in Great Depression
  • Employment is often directed by the state. Therefore, the state can provide full employment even if workers are not doing anything particularly essential. Socialism is sometimes associated with Keynesian demand-management – attempts to stimulate the economy in times of slump. Keynes himself was not a socialist.

Price controls

  • Prices are determined by market forces. Firms with monopoly power may be able to exploit their position and charge much higher prices.
  • In a state-managed economy, prices are usually set by the government this can lead to shortages and surpluses.

Evaluation

There are many different forms of ‘socialism’ from totalitarian ‘Communist regimes’ To democratic socialist parties in Western Europe, who pursue a pragmatic form of redistribution – aiming for equality of opportunity rather than equality of outcome.

Pragmatic socialism

Some forms of socialism, adopt a more pragmatic approach. Many industries are left in private hands – a recognition free-markets are more efficient in producing goods. However, the socialist society attempts to use progressive taxation and social spending to provide a minimum safety net. Important public services are run directly by the government.

Responsible capitalism

Many ‘advanced capitalist societies’ have considerable government intervention. The government may provide unemployment benefits and public spending on infrastructure, healthcare and education.

Related

Published 28 Oct 2018, Tejvan Pettinger. www.economicshelp.org

Источник: https://www.economicshelp.org/blog/glossary/capitalism-v-socialism/

For much of the past 30 years, the long-running, 20th-century contest between state and market had appeared settled. The strong, post-Reagan economic performance of the U.S. based on deregulation, free trade and capital flows and globalization appeared to confirm the virtues of liberal economic policies, while the collapse of the Soviet Union and the capitalist revolution in China proclaimed the death of state-dominated systems. Free capitalism had emerged a clear winner.

Or so it seemed. In the wake of the 2008 financial crisis, the debate over the proper role of the state in a modern economy has been reopened. In the U.S., Tea Partiers advocate their own version of “small government” to promote economic recovery, while President Barack Obama promotes more active government policy to create jobs. Others, meanwhile, wonder if Washington needs an “industrial policy” to nurture new sectors, like green energy, to help the U.S. compete with China. In Europe, politicians are grappling with how to regain competitiveness through liberalization while still maintaining the extensive social protection of their welfare states.

In emerging markets, however, a significant state hand in economic development is far less controversial. Many of today’s up-and-coming economies either have had their state-led development period, or are still very much in the midst of that experiment – most of all, China. And it has not gone unnoticed among some analysts in the West that many of these same emerging markets have also generally maintained their growth despite the devastating global downturn. So as the market economies of the West falter, some have asked if “state capitalism,” that mix of market 2018 ford f 150 raptor and state control, can produce better economic results than the laissez faire economic models favored in the U.S.

Is that really the case? Is “state capitalism” superior to the free market?

Let’s be honest. The current economic crisis is testing our most cherished principles of market economics. Unemployment remains stubbornly high and growth stubbornly slow, and debt is an escalating problem throughout the developed world. What we’re dealing with is not just a recession, but a crisis of capitalism itself, as George Magnus, senior economic advisor at UBS, put it recently:

Our economic predicament is not a temporary or traditional condition. Put simply, the economic model that drove the long boom from the 1980s to 2008, has broken down. Considering the scale of the bust, and the system malfunctions in advanced economies that have been exposed, I would argue that the 2008/09 financial crisis has bequeathed a once-in-a-generation crisis of capitalism…It is a crisis of capitalism because our economic model and policy settings cannot produce sustainable growth, adequate income formation or employment creation.

So it’s only natural that we’ve looked for solutions in countries that are still creating jobs and higher incomes – the best performers of the emerging world. And what have we found? The state is very much at the center of things. While it is true, of course, that no economy in the world today is a pure free market economy – all governments step into economic matters in one way or another – state capitalists do so in ways unthinkable in the U.S. For example, in state capitalists, governments influence bank lending, or outright own large and important segments of the economy. Their policymakers are more willing to guide the economy through bureaucratic fiat. All of these elements of state capitalism might sound just plain dangerous to many in the West. But the fact is that the failings of the advanced economies and the continued strength in emerging markets has made it much more difficult to claim free markets trump state capitalism. Here’s how Ian Bremmer, president of consulting firm Eurasia Group explained matters last year:

It’s now a G20 world, in which China, Russia, Saudi Arabia, and other state-centric players wield growing influence. When leaders of free-market democracies diagnose the global meltdown, they now face the skeptical smiles of those who believe that the free market has failed and that the state should play the leading role in guiding national economies… The financial crisis and market meltdowns in America and Europe have given state capitalism a big boost. In part, that’s because Western economies are still struggling to their feet while China is again off to the races. It’s now much harder for Westerners to champion a free-market system and easier for China and Russia to argue that only governments can save economies on the brink.

So, should we all become state capitalists? Is state capitalism a remedy for the ills the West is facing today? Not so fast. Today’s state capitalists aren’t performing as well as some believe.

The “model” state capitalist is China. Yes, the economy continues to grow at a stellar pace, and a big reason why is the role of the government. The country powered through the Great Recession to a great degree because of government stimulus, credit from state banks and investment by state corporations. Over the long term, the support of the state has also aided the country’s rapid advance into global manufacturing.

But state intervention is having a clear downside as well. Too heavy a crescom online banking hand – through, for example, bureaucratic meddling in the financial system and government control of the value of the yuan – is creating an economy with serious distortions, including rising levels of debt, excessive investment, even more excessive external surpluses, and a potential banking crisis. The Persian Gulf emirates, often cited as another state capitalism success story, have experienced similar problems. Dubai, for example, is still sorting through the fallout from a gargantuan, debt-driven real estate bubble, which to a great degree was inflated by state enterprises.

But most of all, anyone who believes in state capitalism should take a visit to Russia, which I did recently for a recent story in TIME magazine. Once considered a premier state capitalist, Russia’s economy is now being strangled by the state. Under Prime Minister (and formerly President) Vladimir Putin, the state reasserted its authority, regaining its dominance over key sectors of the economy, especially the crucial oil and gas industry. Putin also redistributed oil money by increasing government spending and the size of the civil service. That sparked a pre-crisis consumer boom, but today the story is much different. State enterprises, favored by overbearing bureaucrats, are crowding out the private sector. World Bank surveys show Russia is becoming a harder and harder place to do business. Endemic corruption has soured the investment climate. Private capital is fleeing the country. Because of those problems, growth has never recovered to its pre-crisis levels, and most economic forecasts don’t expect it will anytime soon. Even senior policymakers within the Kremlin are doubting the future of Russia’s state capitalist model. One of them is Arkady Dvorkovich, a reform-minded economic adviser to President Dmitri Medvedev. Those who admire state capitalism “don’t know what they’re saying,” he told me in a very forthright interview. “This way of doing things has exhausted all its potential, so we need to change policies.”

Ironically, what Russia and the other state capitalists need is a strong dose of market reform – deregulation to free up entrepreneurship; better rule of law to attract investment; greater emphasis on commercial viability to prevent wasteful investment. So even though it is true that free capitalism has free market capitalism vs capitalism on hard times, a better system has not yet emerged. State capitalism is not the solution.

Источник: https://business.time.com/2011/09/30/state-capitalism-vs-the-free-market-which-performs-better/

Little Optimism for the Next Generation in Advanced EconomiesAs they continue to struggle with the effects of the Great Recession, publics in advanced economies are pessimistic about the financial prospects for the next generation. Most of those surveyed in richer nations think children in their country will be worse off financially than their parents. In contrast, emerging and developing nations are more optimistic that the next generation will have a higher standard of living.

Overall, optimism is linked with recent national economic performance. Countries that have enjoyed relatively high levels of growth in recent years also register some of the highest levels of confidence in their children’s economic futures.

Education Important for Getting AheadLooking ahead, people in the emerging and developing world see better opportunities at home than abroad. Majorities or pluralities in 30 of the 34 emerging and developing nations surveyed say they would tell young people in their country to stay at home in order to lead a good life, instead of moving to another country.

A good education and hard work are most often seen as the keys to getting ahead in life. This view is especially prevalent in emerging and developing nations, where most see economic opportunity expanding. Still, many also believe success can be determined by things outside a person’s control, such as luck or having a wealthy family.

Inequality Seen as Major ChallengeDespite the long-term optimism that exists in many countries, there are widespread concerns about inequality. Majorities in all of the 44 nations polled say the gap between rich and poor is a big problem facing their countries, and majorities in 28 nations identify this as a very big problem. More than seven-in-ten hold this view in Greece, Spain and Italy – countries that faced significant economic challenges during the last several years. But even in the emerging and developing nations that have enjoyed tremendous growth over the last couple of decades, there is a consensus that those at the top are reaping the gains while others are being left behind.

People blame inequality on a variety of causes, but they see their government’s economic policies as the top culprit. A global median of 29% say those policies are most to blame for the gap between rich and poor. Fewer people blame the amount of workers’ wages, the educational system, the fact that some work harder than free market capitalism vs capitalism, trade, or the tax system.

The survey also asked what would do more to reduce inequality: low taxes on the wealthy and corporations to encourage investment and growth, or high taxes on the wealthy and corporations to fund programs that help the poor. The balance of opinion in emerging and developing nations is that low taxes are most effective while people in advanced economies tend to favor high taxes.

While inequality is considered a major challenge by a median of 60% across the 44 nations polled, higher numbers say rising prices and a lack of job opportunities (medians of 77%) are very big problems. And people in advanced, emerging and developing markets alike are clearly welcome home real estate to live with some degree of inequality as part of a free market system. Majorities or pluralities in 38 of 44 countries say that most people are better off in a free market economy, even though some people are rich while others are poor.

Asia Optimistic about Children’s FutureThese are among the key findings of a survey by the Pew Research Center, conducted in 44 countries among 48,643 respondents from March 17 to June 5, 2014. While this report focuses largely on differences and similarities between economically advanced, emerging and developing nations, the survey also finds significant differences by region.

For instance, Asians are particularly optimistic about the next generation’s financial prospects. Fully 94% of Vietnamese, 85% of Chinese, 71% of Bangladeshis, and 67% of Indians think today’s children will be better off than their parents. Africans and Latin Americans are also on balance optimistic, while Middle Easterners tend to be pessimistic. And in Europe and the United States, pessimism is pervasive.

The survey also highlights how Americans are different from many others around the world on questions related to individualism, a value often associated with American exceptionalism. Fifty-seven percent of Americans disagree with the statement “Success in life is pretty much determined by forces outside our control,” a considerably higher percentage than the global median of 38%. Similarly, Americans place an especially strong emphasis on the value of hard work – 73% think it is very important to work hard in order to get ahead in life, compared with a global median of 50%. Americans Stand Out on Individualism

Emerging and Developing Economies See Brighter Future

Better Future for Next Generation?People in emerging and developing nations are more optimistic for the next generation than publics in advanced economies. Still, there is a wide range of attitudes within each group.

About half or more in 16 of the 25 emerging markets surveyed say children in their nation will be better off financially than their parents, including at least seven-in-ten in Vietnam, China, Chile and Brazil. People in Middle Eastern emerging economies, however, are much more skeptical. In Jordan, Turkey, Egypt and Lebanon, roughly a third or fewer say the nation’s children will be better off financially than their parents. Poles are also considerably pessimistic about the next generation’s opportunities, an outlook which may be influenced by the economic crisis in the European Union.

Developing economies are divided on this question. Roughly half or more in Bangladesh, Nicaragua, Senegal, Ghana and Uganda say their children will be more successful than the older generation. Fewer than four-in-ten agree in Tanzania, Kenya, El Salvador and the Palestinian territories.

Publics in advanced economies are the most pessimistic. In most of the high income countries surveyed, three-in-ten or fewer say the nation’s children will surpass their parents financially. Majorities in eight of the 10 countries believe the younger generation will be worse off. The French, Japanese and British are particularly downbeat about the future. Nearly two-thirds of Americans say the same.

In general, countries that have experienced higher economic growth since 2008 are more optimistic for the next generation than publics that have had less growth. For example, in China, which has experienced an average GDP growth of 9% between 2008 and 2013, 85% of the public says young people will be better off financially than their parents. Meanwhile, Italians, who have seen their economy contract by an average of 2% per year over the course of the global recession, are much less optimistic (15%).
GDP Growth and Optimism about Children's Free market capitalism vs capitalism width=

In some countries, optimism for the next generation has changed significantly in just the past year and these shifts in attitudes appear to be related in part to changing views about the country’s economy. Today, 51% of Ugandans say children will be better off financially than their parents, compared with 39% last year. Over the same time period, Ugandans also became significantly more positive about the current economy (+18 percentage points). Optimism for young people improved since 2013 as well in Senegal (+12), South Africa (+11), Germany (+10), Pakistan (+8), Egypt (+7) and the UK (+6). At the opposite end, hope for the nation’s youth in Venezuela declined by 18 points in the past year as positive ratings of the economy also fell by 15 points. Optimism about the children’s future also decreased over the past 12 months in Kenya (-19), Malaysia (-14), the Philippines (-11), El Salvador (-8) and .

Most See More Opportunities at HomePerhaps because most publics see a bright future for their nation’s youth, people in emerging and developing nations generally believe that it is better for young people who want to have a good life to stay in their home country, rather than move to another country.

Majorities or pluralities in 30 of the 34 emerging and developing nations surveyed say young people should stay at home to be successful, including more than eight-in-ten in Thailand, Indonesia, Vietnam, Malaysia and Tanzania.

In bancorp bank app seven countries do at least four-in-ten say the next generation has more opportunities abroad. This includes publics that have recently witnessed massive political and economic upheaval, such as the Egyptians, worsening ethnic conflict, such as the Lebanese, and severe gang violence, such as the Salvadorans. Poles are also more inclined than most publics to say that young people should move abroad to have a good life. This may reflect the open borders between Poland and other EU countries as well as dissatisfaction with economic conditions at home.

In some countries, young people, those ages 18-29, are more optimistic than people 50 and older about prospects for the next generation. Dog friendly restaurants solana beach ca age gap is particularly large in Uganda (+22 percentage points children will be better off financially), the UK (+21), Nicaragua (+20), Spain (+19) and Thailand (+15). At the same time, in many countries, young people are also more likely to say there are more opportunities to have a good life abroad than at home. On this question, the biggest age gaps are in Tunisia (+25 percentage points recommend young people move to another country), Brazil (+19), the Palestinian territories (+16) and Chile (+15).

Success May Be Out of Our Control

Most Say Success Determined by Outside ForcesMajorities or pluralities in 28 of the 44 countries surveyed agree that success in life is pretty much determined by forces outside our control. People in developing and emerging markets (medians of 56%) are somewhat more likely to believe their fate is out of their hands than those in advanced economies (51%).

In most developing economies, majorities say success is determined by outside forces, including 74% in Bangladesh and 67% in Ghana. Nicaraguans are the least likely to agree among developing countries.

Majorities in 15 of the 25 emerging markets surveyed also think their fate is out of their hands, including six-in-ten or more in Turkey, Vietnam, South Africa, Malaysia, Poland, Lebanon and Nigeria. Latin American countries are generally the least likely among emerging markets to agree their future is determined by outside forces, including fewer than four-in-ten in Colombia, Mexico and Venezuela.

Meanwhile, in advanced economies, roughly half or fewer in six of the 10 countries surveyed agree that success is out of our control. Americans are the least likely to say they are not the masters of their fate (40%), one of the lowest percentages among the 44 countries surveyed.

Education and Hard Work Seen as the Keys to Moving Up

When asked to rate on a scale of 0 to 10 how important a range of characteristics are to getting ahead in life, most global publics say having a good education (global median of 60% rating this “10 – very important”) and working hard (50%) are very important. free market capitalism vs capitalism Knowing the right people (37%), being lucky (33%), coming from a wealthy family (20%), being born a male (17%) and giving bribes (5%) are seen as less essential to doing well.

Education and Hard Work Important for Getting Ahead
In eight of the nine developing countries surveyed, having a good education tops the list of keys to success. About seven-in-ten or more in Nicaragua (78% rate as 10), El Salvador (72%), Senegal (72%) and Ghana (69%) say education is very important to advancing in life. Only in Uganda is luck seen as roughly equal to education in determining one’s future (67% luck vs. 64% education).

Similarly, the dominant opinion among emerging markets is that having a good education is very important to being successful, a view held by more than eight-in-ten Venezuelans (86% rate as 10), Colombians (85%), Chileans (85%) and Argentines (84%). Working hard is the second most common response in most countries. Poland, Jordan and Egypt are exceptions among the emerging markets – these publics say luck is at least as important, if not more so, as education or hard work for getting ahead in life.

Advanced economies are a bit more divided between education and hard work as the keys to success. Education is the top response among five of the 10 countries – Spain (71% rate as 10), Germany (61%), Israel (41%), Italy (39%) and Greece (31%) – and work ethic is the top in four – the U.S. (73%), UK (60%), Japan (42%) and France (25%). The percentage of Americans who say hard work is very important to getting ahead in life is among the highest across all 44 countries. South Koreans are the only public where knowing the right people is the most commonly cited key to success (rated at the top of the scale by 39%).

Even though few rank knowing the right people, being lucky, being from a wealthy family, or being male as a 10 on the 0-10 importance scale, many people do rate these items highly with a score of seven or more. For example, while a global median of just 33% rank being lucky at 10, 75% rate it at seven or higher. In general, emerging and developing publics are somewhat more likely than advanced economies to believe that all of these items are important for getting ahead.

Being a male does not top the list of keys to success, but there is a large gender gap on the question. In 32 of the 44 countries surveyed, men are significantly more likely than women to say gender is very important to getting ahead. The gender gap on this issue tends to be larger in the emerging and developing economies surveyed.

Inequality a Major Problem

Inequality a Problem, But Not BiggestA global median of 60% say that the gap between rich and poor is a very big problem in their country. Concern is somewhat higher among developing economies and emerging markets (median of 60% in each), but what time does ollies open today also shared by people in advanced economies (56%).

Nonetheless, despite this high level of worry about inequality, the issue only ties or tops the list of economic problems in four of the 44 countries surveyed. In general, people in advanced economies tend to worry more about public debt and unemployment than inequality, while those in emerging markets and developing economies are more concerned about inflation and jobs. (For more on views about economic issues, see this September Pew Research report)

Publics Fault Government Policies

The top culprit for income inequality cited by publics around the world is their national government’s economic policies. A global median of 29% say their government’s policies are to blame for the gap between the rich and the poor, while the amount workers are paid is a close second at 23%. Globally, people place less blame on the educational system (11%), a lack of individual hard work (10%), trade between countries (8%) and the structure of the tax system (8%).

Advanced economies in particular lean toward the notion that their governments are to blame for inequality (median of 32%). The Greeks (54%), Spanish (52%) and South Koreans (46%) are government’s harshest critics. Significant percentages among advanced economies also fault workers’ wages for the gap between the rich and the poor, including 29% in Japan and 26% each in France and Germany. The Americans and British are two of the few publics to blame individuals’ lack of hard work (24%) about as much as they do their government’s policies (24% in U.S., 23% in UK).

Government and Workers’ Pay Mostly to Blame for Inequality
Emerging markets are more divided. Pluralities in nine of the 25 countries surveyed blame their government for inequality in their country, including roughly four-in-ten or more in Ukraine (45%), India (45%), Lebanon (43%), China (43%), Tunisia (43%), Turkey (42%) and Nigeria (39%). Meanwhile, pluralities in another six countries say workers’ wages are the primary scapegoat. Latin American publics – such as Brazilians (44%), Chileans free market capitalism vs capitalism and Colombians (39%) – are particularly likely to blame inadequate take-home pay for the gap between the rich and poor.

People in developing economies are also split between blaming the government for income inequality in their country and faulting workers’ wages. Pluralities in Kenya (36%), Ghana (29%) and Tanzania (29%) say inequality is their government’s fault, while Salvadorans (32%) tend to blame the amount workers are paid. Nearly equal percentages in the Palestinian territories, Bangladesh, Senegal and Uganda say both the government and wages travis trice the culprits. Nicaragua (31%) is the country with the highest percentage who say a lack of individual hard work is the problem.

Many Say Low Taxes Are the Answer

Policies to Reduce Income InequalityPluralities or majorities in 22 of the 44 countries surveyed say to reduce inequality it is more effective to have low taxes on the wealthy and corporations to encourage investment and economic growth rather than high taxes on the wealthy and corporations to fund programs that help the poor. Publics in 13 countries prefer the high tax option.

Overall, advanced economies (median of 48%) are somewhat more supportive than either developing (40%) or emerging (31%) countries of using high taxes on the wealthy and corporations to address income inequality. The broadest support comes from Germany, where 61% favor using high taxes to fund poverty programs. Roughly half or more in Spain (54%), South Korea (53%), the UK (50%) and the U.S. (49%) agree. In Italy (68%), France (61%) and Greece (50%), opinion leans toward low taxes to encourage investment.

In most advanced economies, people who say they are very concerned about inequality are particularly supportive of income redistribution to reduce the gap between the rich and poor. There is also a large ideological divide over taxes in Europe and the U.S. In general, individuals on the left are much more likely than those on the right to prefer high taxes on the wealthy and corporations. For example, 71% of those on the left in Spain support redistribution, compared with 45% of people on the right. In the U.S., 70% of liberals say high taxes are more effective to combat inequality while just 33% of conservatives agree.

The prevailing view in most emerging markets surveyed is that low taxes on the rich and businesses to stimulate growth are a better way to address inequality. Roughly six-in-ten or more express this opinion in Brazil (77%), Argentina (60%), Vietnam (60%) and the Philippines (59%). In just five of the 25 emerging countries do pluralities or majorities pick high taxes as the preferred means of reducing the gap between the rich and poor, including 57% in Jordan, 53% each in Egypt and Chile, 48% in Ukraine and 42% in China.

Developing economies also lean more toward low taxes on the wealthy and corporations to encourage investment rather than high taxes for redistribution. At least half prefer low taxes in Uganda (64%), Ghana (57%), Kenya (52%) and Nicaragua (52%). El Salvador is the only developing economy where a majority (58%) chooses high taxes.

Free Market Seen as Best, Despite Inequality

Despite the fact that most people are very concerned about the gap between the rich and the poor in their country, majorities across the globe are willing to accept some inequality to have a free market system. A global median of 66% say most people are better off under capitalism, even if some people are rich and some are poor.

Belief in the free market tends to be highest in developing countries (median of 71%). Nearly two-thirds or more in all nine of the developing economies surveyed agree that most people benefit from capitalism, including 80% of Bangladeshis, 75% of Ghanaians and 74% of Kenyans.

Support for Free Market SystemPublics in emerging markets also generally support the free market. More than half in 21 of the 25 countries surveyed agree that most people are better off in a free market system even if there is some inequality, including roughly three-quarters or more in Vietnam, China, Nigeria, Turkey, Malaysia and the Philippines. Support is much lower in Colombia, Jordan, Mexico and Argentina. Argentines are the least likely to see the benefits of capitalism among all 44 countries surveyed.

Advanced economies are somewhat more divided over the free market. At least seven-in-ten in South Korea, Germany and the U.S. say most people are better off under capitalism, but fewer than half in Greece, Japan and Spain agree. In most advanced economies, people who say the gap between the rich and poor is a very big problem are much less supportive of the free market than those who worry less about inequality.

In general, there has been moderate change in support for the free market between 2007 and 2014 among the countries surveyed in both years. The Spanish (-22 percentage points) and Italians (-16) stand out for their declining belief in capitalism over the course of the global recession. At the other end of the spectrum, the Turks (+14) and Indonesians (+13) are more likely today to say the free market is better for everyone than they were seven years ago.

In some countries, lower income and less educated individuals are less likely to express support for capitalism than higher income and more highly educated people. The gap between lower and higher income people on this question is particularly large in Peru (-23 percentage points), Greece (-20) and France (-17). And the education differences are especially wide in Peru (-20), Pakistan (-18) and Nigeria (-16).

Источник: https://www.pewresearch.org/global/2014/10/09/emerging-and-developing-economies-much-more-optimistic-than-rich-countries-about-the-future/

Free market

Form of market-based economy

For economic systems where markets (either free or regulated) are the primary allocation mechanism, see Market economy.

"Free enterprise" redirects here. For other uses, see Free enterprise (disambiguation).

In economics, a free market is a system in which the prices for goods and services are self-regulated by buyers and sellers negotiating in an open market. In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority, free market capitalism vs capitalism from all forms of economic privilege, monopolies and artificial scarcities.[1] Proponents of the concept of free market contrast it with a regulated market in which a government intervenes in supply and demand through various methods such as tariffs used to restrict trade and to protect the local economy. In an idealized free-market economy, also called a liberal market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy.

Scholars contrast the concept of a free market with the concept of a coordinated market in fields of study such as political economy, new institutional economics, economic sociology and political science. All of these fields emphasize the importance in currently existing market systems of rule-making institutions external to the simple forces of supply and demand which create space for those forces to operate to control productive output and distribution. Although free markets are commonly associated with capitalism in contemporary usage and popular culture, free markets have also been components in some forms of socialism.[2]

Criticism of the theoretical concept may regard systems with significant market power, inequality of bargaining power, or information asymmetry as less than free, with regulation being necessary to control those imbalances in order to allow markets to function more efficiently as well as produce more desirable social outcomes.

Economic systems[edit]

Capitalism[edit]

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit.[3][4][5][6] Central characteristics of capitalism include capital accumulation, competitive markets, a price system, private property and the recognition of property rights, voluntary exchange and wage labor.[7][8] In a capitalist market economy, decision-making and investments are determined by every owner of wealth, property or production ability in capital and financial markets whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.[9]

Economists, historians, political economists and sociologists have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire or free-market capitalism, state capitalism and welfare capitalism. Different forms of capitalism feature varying degrees of free markets, public ownership,[10] obstacles to free competition and state-sanctioned social policies. The degree of competition in markets and the role of intervention and regulation as well as the scope of state ownership vary across different models of capitalism.[11][12] The extent to which different markets are free and the rules defining private property are matters of politics and policy. Most of the existing capitalist economies are mixed economies that combine elements of free markets with state intervention and in some cases economic planning.[13]

Market economies have existed under many forms of government and in many different times, places and cultures. Modern capitalist societies—marked by a universalization of money-based social relations, a consistently large and system-wide class of workers who must work for wages (the proletariat) and a capitalist class which owns the means of production—developed in Western Europe in a process that led to the Industrial Revolution. Capitalist systems with varying degrees of direct government intervention have since become dominant in the Fhn staff directory world and continue to spread. Capitalism has been shown to be strongly correlated with economic growth.[14]

Georgism[edit]

Main article: Georgism

For classical economists such as Adam Smith, the term free market does not necessarily refer to a market free from government interference, but rather free from all forms of economic privilege, monopolies and artificial scarcities.[1] This implies that economic rents, i.e. profits generated from a lack of perfect competition, must be reduced or eliminated as much as possible through free competition.

Economic theory suggests the returns to land and other natural resources are economic rents that cannot be reduced in such a way because of their perfect inelastic supply.[15] Some economic thinkers emphasize the need to share those rents as an essential requirement for a well functioning market. It is suggested this would both eliminate the need for regular taxes that have a negative effect on trade (see deadweight loss) as well as release land and resources that are speculated upon or monopolised. Two features that improve the competition and free market mechanisms. Winston Churchill supported this view by the following statement: "Land is the mother of all monopoly".[16] The American economist and social philosopher Henry George, the most famous proponent of this thesis, wanted to accomplish this through a high land value tax that replaces all other taxes.[17] Followers of his ideas are often called Georgists or geoists and geolibertarians.

Léon Walras, one of the founders of the neoclassical economics who helped formulate the general equilibrium theory, had a very similar view. He argued that free competition could only be realized under conditions of state ownership of natural resources and land. Additionally, income taxes could be eliminated because the state would receive income to finance public services through owning such resources and enterprises.[18]

Laissez-faire[edit]

Main article: Laissez-faire

The laissez-faire principle expresses a preference for an absence of non-market pressures on prices and wages such as those from discriminatory government taxes, subsidies, tariffs, regulations of purely private behavior, or government-granted or coercive monopolies. In The Pure Theory of Capital, Friedrich Hayek argued that the goal is the preservation of the unique information contained in the price itself.[19]

The definition of free market has been disputed and made complex by collectivist political philosophers and socialist economic ideas.[1] This contention arose from the divergence from classical economists such as Richard Cantillon, Adam Smith, David Ricardo and Thomas Robert Malthus and from the continental economics developed primarily by the Spanish scholastic and French classical economists, including Anne-Robert-Jacques Turgot, Baron de Laune, Jean-Baptiste Say and Frédéric Bastiat. During the marginal revolution, subjective value theory was rediscovered.[20]

Although laissez-faire has been commonly associated with capitalism, there is a similar economic theory associated with socialism called left-wing or socialist laissez-faire, also known as free-market anarchism, free-market anti-capitalism and free-market socialism to distinguish it from laissez-faire capitalism.[21][22][23] Critics of laissez-faire as commonly understood argue that a truly laissez-faire system would be anti-capitalist and socialist.[24][25] American individualist anarchists such as Benjamin Tucker saw themselves as economic free-market socialists and political individualists while arguing that their "anarchistic socialism" or "individual anarchism" was "consistent Manchesterism".[26]

Socialism[edit]

Main article: Socialism

See also: Socialist economics

Various forms of socialism based on free markets have existed since the 19th century. Early notable socialist proponents of free markets include Pierre-Joseph Proudhon, Benjamin Tucker and the Ricardian socialists. These economists believed that genuinely free markets and voluntary exchange could not exist within the exploitative conditions of capitalism. These proposals ranged from various forms of worker cooperatives operating in a free-market economy such as the mutualist system proposed by Proudhon, to state-owned enterprises operating in unregulated and open markets. These models of socialism are not to be confused with other forms of market socialism (e.g. the Lange model) where publicly owned enterprises are coordinated by various degrees of economic planning, or where capital good prices are determined through marginal cost pricing.

Advocates of free-market socialism such as Jaroslav Vanek argue that genuinely free markets are not possible under conditions of private ownership of productive property. Instead, he contends that the class differences and inequalities in income and power that result from private ownership enable the interests of the dominant class to skew the market to their favor, either in the form of monopoly and market power, or by utilizing their wealth and resources to legislate government policies that benefit their specific business interests. Additionally, Vanek states that workers in a socialist economy based on cooperative and self-managed enterprises have stronger incentives to maximize productivity because they would receive a share of the profits (based on the overall performance of their enterprise) in addition to receiving their fixed wage or salary. The stronger incentives to maximize productivity that he conceives as possible in a socialist economy based on cooperative and self-managed enterprises might be accomplished in a free-market economy if employee-owned companies were the norm as envisioned by various thinkers including Louis O. Kelso and James S. Albus.[27]

Socialists also assert that free-market capitalism leads to an excessively skewed distributions of income and economic instabilities which in turn leads to social instability. Corrective measures in the form of social welfare, re-distributive taxation and regulatory measures and their associated administrative costs which are required create agency costs for society. These costs would not be required in a self-managed socialist economy.[28]

Concepts[edit]

Economic equilibrium[edit]

Main article: Economic equilibrium

With varying degrees of mathematical rigor over time, the general equilibrium theory has demonstrated that under certain conditions of competition the law of supply and demand predominates in this ideal free and competitive market, influencing prices toward an equilibrium that balances the demands for the products against the supplies.[29] At these equilibrium prices, the market distributes the products to the purchasers according to each purchaser's preference or utility for each product and within the relative limits of each buyer's purchasing power. This result is described as market efficiency, or more specifically a Pareto optimum.

This equilibrating behavior of free markets requires certain assumptions about their agents—collectively known as perfect competition—which therefore cannot be results of the market that they create. Among these assumptions are several which are impossible to fully achieve in a real market, such as complete information, interchangeable goods and services and lack of market power. The question then is what approximations of these conditions guarantee approximations of market efficiency and which failures in competition generate overall market failures. Several Nobel Prizes in Economics have been awarded for analyses of market failures due to asymmetric information.

Low barriers to entry[edit]

Main article: Barriers to entry

A free market does not require the existence of competition, however, it does require a framework that allows new market entrants. Hence, in the lack of coercive barriers, for example, paid licensing certification for certain services and businesses, competition between businesses flourishes all through the demands of consumers, or buyers. It often suggests the presence of the profit motive, although neither a profit motive or profit itself are necessary for a free market.[citation needed] 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.

Perfect competition and market failure[edit]

Main articles: Market failure and Perfect competition

Conditions that must exist for unregulated markets to behave as free markets are summarized at perfect competition. An absence of any of these perfect competition ideal conditions is a market failure. Most schools of economics[which?] allow that regulatory intervention may provide a substitute force to counter a market failure. Under this thinking, this form of market regulation may be better than an unregulated market at providing a free market.

Spontaneous order[edit]

Main article: Spontaneous order

See also: Invisible hand

Friedrich Hayek popularized the view that market economies promote spontaneous order which results in a better "allocation of societal resources than any design could achieve".[30] According to this view, market economies are characterized by the formation of complex transactional networks that produce and distribute goods and services throughout the economy. These networks are not designed, but they nevertheless emerge as a result of decentralized individual economic decisions. The idea of spontaneous order is an elaboration on the invisible hand proposed by Adam Smith in The Wealth of Nations. About the individual, Smith wrote:

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.[31]

Smith pointed out that one does not get one's dinner by appealing to the brother-love of the butcher, the farmer or the baker. Rather, one appeals to their self-interest and pays them for their labor, arguing:

It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.[32]

Supporters of this view claim that spontaneous order is superior to any order that does not allow individuals to make their own choices of what to produce, what to buy, what to sell and at what prices due to the number and complexity of the factors involved. They further believe that any attempt to implement central planning will result in more disorder, or a less efficient production and distribution of goods and services.

Critics such as political economist Karl Polanyi question whether a spontaneously ordered market can exist, completely free of distortions of political policy, claiming that even the ostensibly freest markets require a state to exercise coercive power in some areas, namely to enforce contracts, govern the formation of labor unions, spell out the rights and obligations of corporations, shape who has standing to bring legal actions and define what constitutes an unacceptable conflict of interest.[33]

Supply and demand[edit]

Main article: Supply and demand

Demand for an item (such as goods or services) refers to the economic market pressure from people trying to buy it. Buyers have a maximum price they are willing to pay and sellers have a minimum price they are willing to offer their product. The point at which the supply and demand curves meet is free market capitalism vs capitalism equilibrium price of the good and quantity demanded. Sellers willing to offer their goods at a lower price than the equilibrium price receive the difference as producer surplus. Buyers willing to pay for goods at a higher price than the equilibrium price receive the difference as consumer surplus.[34]

The model is commonly applied to wages in the market for labor. The typical roles of supplier and consumer are reversed. The suppliers are individuals, who try to sell (supply) their labor for the highest price. The consumers are businesses, which try to buy (demand) the type of labor they need at the lowest price. As more people offer their labor in that market, the equilibrium wage decreases and the equilibrium level of employment increases as the supply curve shifts to the right. The opposite happens if fewer people offer their wages in the market as the supply curve shifts to the left.[34]

In a free market, individuals and firms taking part in these transactions have the liberty to enter, leave and participate in the market as they so choose. Prices and quantities are allowed to adjust according to economic conditions in order to reach equilibrium and properly allocate resources. However, in many countries around the world governments seek to intervene in the free market in order to achieve certain social or political agendas.[35] Governments may attempt to create social equality or equality of outcome by intervening in the market through actions such as imposing a minimum wage (price floor) or erecting price controls (price ceiling). Other lesser-known goals are also pursued, such as in the United States, where the federal government subsidizes owners of fertile land to not grow crops in order to prevent the supply curve from further shifting to the right and decreasing the equilibrium price. This is done under the justification of maintaining farmers' profits; due to the relative inelasticity of demand for crops, increased supply would lower the price but not significantly increase quantity demanded, thus placing pressure on farmers to exit the market.[36] Those interventions are often done in the name of maintaining basic assumptions of free markets such as the idea that the costs of production must be included in the price of goods. Pollution and depletion costs are sometimes not included in the cost of production (a manufacturer that withdraws water at one location then discharges it polluted downstream, avoiding the cost of treating the water), therefore governments may opt to impose regulations in an attempt to try to internalize all of the cost of production and ultimately include them in the price of the goods.

Advocates of the free market contend that government intervention hampers economic growth by disrupting the natural allocation of resources according to supply and demand while critics of the free market contend that government intervention is sometimes necessary to protect a country's economy from better-developed and more influential economies, while providing the stability necessary for wise long-term investment. Milton Friedman pointed to failures of central planning, price controls and state-owned corporations, particularly in the Soviet Union and China[37] while Ha-Joon Chang cites the examples of post-war Japan and the growth of South Korea's steel industry.[38]

Criticism[edit]

See also: Criticism of capitalism

Critics of the free market have argued that in real world situations it has proven to be susceptible to the development of price fixing monopolies.[39] Such reasoning has led to government intervention, e.g. the United States antitrust law.

Two prominent Canadian authors argue that government at times has to intervene to ensure competition in large and important industries. Naomi Klein illustrates this roughly in her work The Shock Doctrine and John Ralston Saul more humorously illustrates this through various examples in The Collapse of Globalism and the Reinvention of the World.[40] While its supporters argue that only a free market can create healthy competition and therefore more business and reasonable prices, opponents say that a free market in its purest form may result in the opposite. According to Klein and Ralston, the merging of companies into giant corporations or the privatization of government-run industry and national assets often result in monopolies or oligopolies requiring government intervention to force competition and reasonable prices.[40] Another form of market failure is speculation, where transactions are made to profit from short term fluctuation, rather from the intrinsic value of the companies or products. This criticism has been challenged by historians such as Lawrence Reed, who argued that monopolies have historically failed to form even in the absence of antitrust law.[41][unreliable source?] This is because monopolies are inherently difficult to maintain as a company that tries to maintain its monopoly by buying out new competitors, for instance, is incentivizing newcomers to enter the market in hope of a buy-out. Furthermore, according to writer Walter Lippman and economist Milton Friedman, historical analysis of the formation of monopolies reveals that, contrary to popular belief, these were the result not of unfettered market forces, but of legal privileges granted by government.[42][unreliable source?]

American philosopher and author Cornel West has derisively termed what he perceives as dogmatic arguments for laissez-faire economic policies as free-market fundamentalism. West has contended that such mentality "trivializes the concern for public interest" and "makes money-driven, poll-obsessed elected officials deferential to corporate goals of profit – often at the cost of the common good".[43] American political philosopher Michael J. Sandel contends that in the last thirty years the United States has moved beyond just having a market economy and has become a market society where literally everything is for sale, including aspects of social and civic life such as education, access to justice and political influence.[44] The economic historian Karl Polanyi was highly critical of the idea of the market-based society in his book The Great Transformation, noting that any attempt at its creation would undermine human society and the common good.[45]

Critics of free market economics range from those who reject markets entirely in favour of a planned economy as advocated by various Marxists to those who wish to see market failures regulated to various degrees or supplemented by government interventions. Keynesians support market roles for government such as using fiscal policy for economic stimulus when actions in the private sector lead to sub-optimal economic outcomes of depressions or recessions. Business cycle is used by Keynesians to explain liquidity traps, by which underconsumption occurs, to argue for government intervention with fiscal policy. David McNally of the University of Houston argues in the Marxist tradition that the logic of the market inherently produces inequitable outcomes and leads to unequal exchanges, arguing that Adam Smith's moral intent and moral philosophy espousing equal exchange was undermined by the practice of the free market he championed. According to McNally, the development of the market economy involved coercion, exploitation and violence that Smith's moral philosophy could not countenance. McNally also criticizes market socialists for believing in the possibility of fair markets based on equal exchanges to be achieved by purging parasitical elements from the market economy such as private ownership of the means of production, arguing that market socialism is an oxymoron when socialism is defined as an end to wage labour.[46]

Some would argue that only one known example of a true free market exists, namely the black market. The black market is under constant threat by the police, but under no circumstances do the police regulate the substances that are being created. The black market produces wholly unregulated goods and are purchased and consumed unregulated. That is to say, anyone can produce anything at any time and anyone can purchase anything available at any time. The alternative view is that the black market is not a free market at all since high prices and natural monopolies are often enforced through murder, theft and destruction. Black markets can only exist peripheral to regulated markets where laws are being regularly enforced.[citation needed]

See also[edit]

Notes[edit]

  1. ^ abcPopper, Karl (1994). The Open Society and Its Enemies. Routledge Classics. ISBN .
  2. ^Bockman, Johanna (2011). Markets in the name of Socialism: The Left-Wing origins of Neoliberalism. Stanford University Press. ISBN .
  3. ^Zimbalist, Sherman and Brown, Andrew, Howard J. and Stuart (October 1988). Comparing Economic Systems: A Political-Economic Approach. Harcourt College Pub. pp. 6–7. ISBN .
  4. ^Rosser, Mariana V.; Rosser, J Barkley (23 July 2003). Comparative Economics in a Transforming World Economy. MIT Press. p. 7. ISBN .
  5. ^Chris Jenks. Core Sociological Dichotomies. "Capitalism, as a mode of production, is an economic system of manufacture and exchange which is geared toward the production first financial bank indianapolis locations sale of commodities within a market for profit, where the manufacture of commodities consists of the use of the formally free labor of workers in exchange for a wage to create commodities in which the manufacturer extracts surplus value from the labor of the workers in terms of the difference between the wages paid to the worker and the value of the commodity produced by him/her to generate that profit." London; Thousand Oaks, CA; New Delhi. Sage. p. 383.
  6. ^Gilpin, Robert (5 June 2018). The Challenge of Global Capitalism : The World Economy in the 21st Century. ISBN . OCLC 1076397003.
  7. ^Heilbroner, Robert L. "Capitalism"Archived 28 October 2017 at the Wayback Machine. Steven N. Durlauf and Lawrence E. Blume, eds. The New Palgrave Dictionary of Economics. 2nd ed. (Palgrave Macmillan, 2008) doi:10.1057/9780230226203.0198.
  8. ^Louis Hyman and Edward E. Baptist (2014). American Capitalism: A ReaderArchived 22 May 2015 at the Wayback Machine. Simon & Schuster. ISBN 978-1-4767-8431-1.
  9. ^Gregory, Paul; Stuart, Robert (2013). The Global Economy and its Economic Systems. South-Western College Pub. p. 41. ISBN .
  10. ^Gregory and Stuart, Paul and Robert (28 February 2013). The Global Economy and its Economic Systems. South-Western College Pub. p. 107. ISBN .
  11. ^Macmillan Dictionary of Modern Economics, 3rd Ed., 1986, p. 54.
  12. ^Bronk, Richard (Summer 2000). "Which model of capitalism?". OECD Observer. Vol. 1999 no. 221–22. OECD. pp. 12–15. Archived from the original on 6 April 2018. Retrieved 6 April 2018.
  13. ^Stilwell, Frank. "Political Economy: the Contest of Economic Ideas". First Edition. Oxford University Press. Melbourne, Australia. 2002.
  14. ^Sy, Wilson N. (18 September 2016). "Capitalism and Economic Growth Across the World". Rochester, NY. SSRN 2840425.
  15. ^Adam Smith, The Wealth of NationsBook V, Chapter 2, Part 2, Article I: Taxes upon the Rent of Houses.
  16. ^House Of Commons May 4th; King's Theatre, Edinburgh, July 17
  17. ^Backhaus, "Henry George's Ingenious Tax," pp. 453–58.
  18. ^Bockman, Johanna (2011). Markets in the name of Socialism: The Left-Wing origins of Credit score needed to get amazon credit card. Stanford University Press. p. 21. ISBN .
  19. ^Hayek, Friedrich (1941). The Pure Theory of Capital.
  20. ^Popper, Karl (2002). The Poverty of Historicism. Routledge Classics. ISBN .
  21. ^Chartier, Gary; Johnson, Charles W. (2011). Markets Not Capitalism: Individualist Anarchism Against Bosses, Inequality, Corporate Power, and Structural Poverty. Brooklyn, NY:Minor Compositions/Autonomedia
  22. ^"It introduces an eye-opening approach to radical social thought, rooted equally in libertarian socialism and market anarchism." Chartier, Gary; Johnson, Charles W. (2011). Markets Not Capitalism: Individualist Anarchism Against Bosses, Inequality, Corporate Power, and Structural Poverty. Brooklyn, NY: Minor Compositions/Autonomedia. p. back cover.
  23. ^"But there has always been a market-oriented strand of libertarian socialism that emphasizes voluntary cooperation between producers. And markets, properly understood, have always been about cooperation. As a commenter at Reason magazine's Hit&Run blog, remarking on Jesse Walker's link to the Kelly article, put it: "every trade is a cooperative act." In fact, it's a fairly common observation among market anarchists that genuinely free markets have the most legitimate claim to the label "socialism." "Socialism: A Perfectly Good Word Rehabilitated" by Kevin Carson at website of Center for a Stateless Society.
  24. ^Nick Manley, "Brief Introduction To Left-Wing Laissez Faire Economic Theory: Part One".
  25. ^Nick Manley, "Brief Introduction To Left-Wing Laissez Faire Economic Theory: Part Two".
  26. ^Tucker, Benjamin (1926). Individual Liberty: Selections from the Writings of Benjamin R. Tucker. New York: Vanguard Press. pp. 1–19.
  27. ^"Cooperative Economics: An Interview with Jaroslav Vanek". Interview by Albert Perkins. Retrieved March 17, 2011.
  28. ^The Political Economy of Socialism, by Horvat, Branko (1982), pp. 197–98.
  29. ^Theory of Value by Gérard Debreu.
  30. ^Hayek cited. Petsoulas, Christina. Hayek's Liberalism and Its Origins: His Idea of Spontaneous Order and the Scottish Enlightenment. Routledge. 2001. p. 2.
  31. ^Smith, Adam (1827). The Wealth home remedies for fleas on cats without bathing Nations. Book IV. p. 184.
  32. ^Smith, Adam (1776). "2". The Wealth of Nations. 1. London: W. Strahan and T. Cadell.
  33. ^Hacker, Jacob S.; Pierson, Paul (2010). Winner-Take-All Politics: How Washington Made the Rich Richer – and Turned Its Back on the Middle Class. Simon & Schuster. p. 55.
  34. ^ abJudd, K. L. (1997). "Computational economics and economic theory: Substitutes or complements?"(PDF). Journal of Economic Dynamics and Control. 21 (6): 907–42. doi:10.1016/S0165-1889(97)00010-9. S2CID 55347101.
  35. ^"Archived copy". Archived from the original on 2014-05-22. Retrieved 2014-06-06.CS1 maint: archived copy as title (link)
  36. ^"Farm Program Pays $1.3 Billion to People Who Don't Farm". Washington Post. 2 July 2006. Retrieved 3 June 2014.
  37. ^Ip, Greg and Mark Whitehouse, "How Milton Friedman Changed Economics, Policy and Markets", Wall Street Journal Online (November 17, 2006).
  38. ^"Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism", Ha-Joon Chang, Bloomsbury Press, ISBN 978-1596915985
  39. ^Tarbell, Ida (1904). The History of the Standard Oil Company. McClure, Phillips and Co.
  40. ^ abSaul, John The End of Globalism.
  41. ^"Cliche #41: "Rockefeller’s Standard Oil Company Proved That We Needed Anti-Trust Laws to Fight Such Market Monopolies", The Freeman, January 23, 2015. Retrieved December 20, 2016.
  42. ^"Why We Need To Re-think Friedman's Ideas About Monopolies". ProMarket. 2021-04-25. Retrieved 2021-09-27.
  43. ^"Cornel West: Democracy Matters", The Globalist, January 24, 2005. Retrieved October 9, 2014.
  44. ^Michael J. Sandel (June 2013). Why we shouldn't trust markets with our civic life. TED. Retrieved January 11, 2015.
  45. ^Henry Farrell (July 18, 2014). The free market is an impossible utopia. The Washington Post. Retrieved January 11, 2015.
  46. ^McNally, David (1993). Against the Market: Political Economy, Market Socialism and the Marxist Critique. Verso. ISBN .

Further reading[edit]

  • Block, Fred and Somers, Margaret R (2014). The Power of Market Fundamentalism: Karl Polanyi's Critique.Harvard University Press. ISBN 0674050711.
  • Boettke, Peter J. "What Went Wrong with Economics?", Critical Review Vol. 11, No. 1, pp. 35, 58.
  • Harcourt, Bernard (2012). The Illusion of Free Markets: Punishment and the Myth of Natural Order.Harvard University Press. ISBN 0674066162.
  • Cox, Harvey (2016). The Market as God. Harvard University Press. ISBN 9780674659681.
  • Hayek, Friedrich A. (1948). Individualism and Economic Order. Chicago: University of Chicago Press. vii, 271, [1].
  • Palda, Filip (2011) Pareto's Republic and the New Science of Peace 2011 [1] chapters online. Published by Cooper-Wolfling. ISBN 978-0-9877880-0-9.
  • Sandel, Michael J. (2013). What Money Can't Buy: The Moral Limits of Markets.Farrar, Straus and Giroux. ISBN 0374533652.
  • Stiglitz, Joseph. (1994). Whither Socialism? Cambridge, Massachusetts: MIT Press.
  • Verhaeghe, Paul (2014). What About Me? The Struggle for Identity in a Market-Based Society. Scribe Publications. ISBN 1922247375.
  • Robert Kuttner, "The Man from Red Vienna" (review of Gareth Dale, Karl Polanyi: A Life on the Left, Columbia University Press, 381 pp.), The New York Review of Books, vol. LXIV, no. 20 (21 December 2017), pp. 55–57. "In sum, Polanyi got some details wrong, but he got the big picture right. Democracy cannot survive an excessively free market; and containing the market is the task of politics. To ignore that is to court fascism." (Robert Kuttner, p. 57).

External links[edit]

Источник: https://en.wikipedia.org/wiki/Free_market

How Is a Capitalist System Different Than a Free Market System?

Is Free Market the Same as Capitalism?

A capitalist economy and a free market economy are two types of economic systems. Often the terms are used interchangeably, especially in casual parlance. But, while they have overlapping qualities, the two are not quite the same thing.

Capitalist and free-market systems do spring from the same economic soil, so to speak: the law of supply and demand, which becomes the basis to determine the price and production of goods and services.

But they refer to different things. Capitalism is focused on the creation of wealth and ownership of capital and factors of production, whereas a free market system is focused on the exchange of wealth or goods and services.

Key Takeaways

  • The free market and capitalism are not identical economic systems, though they often go hand-in-hand.
  • Capitalism refers to the creation of wealth and ownership of capital, production, and distribution, whereas a free market system has to do with the exchange of wealth or goods and services.
  • Key features of capitalism include personal ownership of property, open competition, and individual incentives.
  • A free-market system is ruled entirely by demand and supply from buyers and sellers, with little or no government regulation.
  • Many capitalistic nations, including the U.S., actually have mixed economies: While elements of the free market reign, considerable state oversight, taxation, and regulations exist, especially in particular sectors.

Key Differences Between Capitalism and Free Market

Some key features of capitalism include the competition between companies and owners, private ownership, and motivation to generate a profit. In a capitalistic society, the production and pricing of goods and services are largely determined by supply and demand—the free market—but some government regulation and oversight may occur. And the profits of capitalist endeavors can be taxed heavily.

Also, the market may be free in name only: A private owner in a capitalist system can have a monopoly in a particular field or geographic area, preventing true competition.

In contrast, a free market system is ruled entirely by demand and supply, and there is little or no government regulation. In a free market system, a buyer and a seller transact freely and only when they voluntarily agree on the price of a good or service.

For example, suppose a seller wants to sell a toy for $5, and a buyer wants to buy that toy for $3. A transaction will occur when the buyer and the seller agree on a price. Because a free market system is based solely on supply and demand, it leads to free competition in the economy, without any intervention from outside forces.

It is possible to have a capitalist economy without complete free enterprise, and possible to have a free market without capitalism.

Free Market Examples

Free markets are all around us, relatively speaking. Each country has free-market aspects, although there is no totally pure free market; it's more a concept than a tangible reality. Most countries have a mixed economy or mixed economic system.

For example, the U.S. is often considered a highly capitalist country, its economy embodying the essence of a free market. However, economy-evaluating sources often don't consider it 100% pure, because there are federal minimum wages and antitrust laws; regulations imposed by government agencies like the SEC; and corporate taxes, along with import and export tariffs.

For example, the conservative think tank Heritage Foundation's 2021 Index of Economic Freedom, which ranks nations on a 100-point scale, gives the U.S. a score of 75, which places it in the second-tier “mostly free” category (the U.S. ranks 20th on the overall list).

The U.S. fares a little better in the "Economic Freedom of the World: 2020 Annual Report," issued by the Fraser Avett brothers pnc bank arts center of Canada, another think tank. Scoring 8.22 out of a possible 10, it comes in sixth place on the world rankings roster—squarely in the highest "most free" category (Hong Kong ranks as one az credit union app one on the list overall).

On the other end of the spectrum, there are countries that are considered “repressed” (as the Heritage Foundation puts it). These countries have virtually no economic freedoms. The most repressed, according to the 2021 rankings, is North Korea (ranked 178th), with Venezuela (177th) and Cuba (176th) also at the bottom of the list.

In the Fraser Institute report, Venezuela ranks as the "least free"—ranking 162nd, the bottom of the list. Other low scorers include Libya (160th), Iran (158th), and Algeria (157th).

Georgia, the small country that was previously part of the Soviet Union, has made great strides over the years when it comes to becoming more of a free market. Focusing on flat-tax rates and privatization, the country ranks 12th when it comes to economic freedoms with an overall freedom score of 77.2. Its score in 1998 was 52.5 and 69.8 in 2008.

The No. 1 Free Market Economy

For years, Hong Kong was often cited as the country closest to a completely free-market economy. It was rated no. 1 or no. 2, heading the “free” category (the highest level), for more than two decades on the Heritage Foundation's list. It still tops the Fraser Economic Freedom of the World Index.

However, one could argue that Hong Kong, under China's control since the mid-1990s, isn't truly an independent nation—especially given the Chinese government's increasing interventions in its economy in 2019-20. For that reason, it's not on the Heritage Foundation 2021 list at all.

Instead, the Heritage top spot goes to Singapore; with a score of 89.7, it's been has been ranked the freest in the world for the second year in a row. Singapore occupies the no. 2 spot on the Fraser index.

Though no country is 100% unregulated, Singapore is as close as it comes. The government is very pro-business and open to global investment; legislation is lax, and the corporate tax rate is a low 17%.

The people there are living long lives and seeing a consistent rise in wages—having a gross domestic product (GDP) per capita that’s among the highest in the world, which helps propagate economic freedoms. Singapore also has strong access to global trade and property rights.

The opposite of a free market economy is a planned, controlled, or command economy. The government controls the means of production and the distribution of wealth, dictating the prices of goods and services and the wages workers receive.

What Does Free Market Capitalism Mean?

Any economy is capitalist as long as private individuals control the factors of production. A purely capitalist economy is also a free market economy, meaning the law of supply and demand, rather than a central government, regulates production, labor, and the marketplace. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services. How to find out a bank by routing number profit motive drives all commerce and forces businesses to operate as efficiently as possible to avoid losing market share to competitors.

Can You Have a Free Market Without Capitalism?

Yes, a free market can exist without capitalism. It can exist under socialism, as long as there is an absence of coerced (forced) transactions or conditions on transactions, or in other sorts of communal/mutualistic societies, such as those that Native American tribes had.

That said, most free markets tend to coincide with countries and societies that value private property and capitalism and shy away from state ownership and regulations. Free markets are more likely to grow and thrive in a system where property rights are well protected and individuals have an incentive to invest, acquire, build, and pursue profits.

What Is a Capitalist Economy Example?

New Zealand is a prime example of a capitalist economy. This wealthy country in the Asian Pacific region has systemically deregulated and privatized many industrial and professional sectors since the 1980s. Its judicial system recognizes and enforces private property interests and contracts. Government subsidies are low, and an open, liberal attitude to global trade and investment is well-established. Tariffs are low on imports and exports, which comprise around 50% of New Zealand's GDP.

Is the U.S. a Free Market?

Yes, the U.S. is largely—but not completely—a free market. Although it is primarily capitalistic—that is, private ownership of property and production predominates—and the laws of supply and demand largely rule the economy, it has some socialistic elements: The government does play a role in economic affairs and financial policies.

The U.S., strictly speaking, is considered to have a mixed economy: Some aspects of it are free and unfettered, while others are state-controlled or highly regulated.

Is Free Market Capitalism Good?

Whether free-market capitalism is good or bad has long been a source of debate, dating back to the mid-1800s, when capitalism began to flourish in developed nations—along with criticisms of it by proponents of alternative systems, like communism.

Advocates of free-market capitalism argue that private ownership and open, unregulated exchange of goods and services is the fairest and most efficient path to economic growth and progress. Nothing can replace the motivational power of personal incentives, individual freedom, and open competition, they say.

Critics counter that free-market capitalism promotes inequality, concentrating and keeping power in the hands of a minority, who then exploit the majority. It prioritizes individual profit above society's well-being, dividing people into "haves" and "have-nots."

Proponents note that many of the most prosperous and advanced countries in the world practice free-market capitalism, making them a model for developing nations. But skeptics note these systems aren't always pure—they possess strong socialist characteristics and elements of controlled economies as well.

For example, one could argue that the U.S.—widely seen as one of the avatars of a free market capitalist system—achieved its 20th-century heights of power and prosperity only after the expansion of government controls, social programs, and oversight/intervention agencies via the New Deal of the 1930s and the Great Society of the 1960s.

Источник: https://www.investopedia.com/ask/answers/042215/what-difference-between-capitalist-system-and-free-market-system.asp

Economic systems

There are two basic solutions to the economic problem as described by Paul Samuelson, namely those based on free markets and those based on central panning.

Free market economies

Markets enable mutually beneficial exchange between producers and consumers, and systems that rely on markets to solve the economic problem are called market economies. In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined consumers, how to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers. Market economies work by allowing the direct interaction of consumers and producers who are pursuing their own self-interest. The pursuit of self-interest is at the heart of free market economics.

Market economies

Command economies

The second solution to the economic problem is the allocation of scarce resources by government, or an agency appointed by the government. This method is referred to as central planning, and economies that exclusively use central planning are called command economies. In other words governments direct or command resources to be used in particular ways. For example, governments can force citizens to pay taxes and decide how many roads or hospitals are built.

Command economies have certain advantages over free market economies, especially in terms of the coordination of scarce resources at times of crisis, such as a war or following a natural disaster. Free markets also fail at times to allocate resources efficiently, so remedies often involve the allocation of resources by government to compensate for these failures.

Command economies

Command economies have certain advantages over free market economies, especially in terms of the coordination of scarce resources at times of crisis, such as a war or natural disaster. Free markets also fail at times to allocate resources efficiently, so remedies often involve the allocation of resources by government to compensate for these failures.

Communism

The benefits of command economies over free market capitalism became the central economic idea of German philosopher and economist, Karl Marx, who advocated state ownership of the means of production – namely, land and capital. He also predicted the eventual collapse of capitalism. The real value of an economic activity, Marx argued, could always be traced back to labour rather than capital, and hence capitalism’s pursuit of higher profits though the accumulation of capital was always at the expense of labour, who would increasingly have to produce more and more output to satisfy the needs of capitalists.

According to Marx, when the ‘reality’ of this sets in, labour would realise it was being exploited and would rise up and overthrow ther capitalist ‘masters’. While the ideas of Marx seem out of touch with the reality of history, Marx’s economic theories are widely studied and still influential.

Mixed economies

There is a third type of economy involving a combination of market forces and central planning, called mixed economies.

Mixed economies may have a distinct private sector, where resources are allocated primarily by market forces, such as the grocery sector of the UK economy. Mixed economies may also have a distinct public sector, where resources are allocated mainly by government, such as defence, police, and fire services.  In many sectors, resources are allocated by a combination of markets and panning, such as healthcare and, which have both public and private provision.

Mixed economies

Interventionist economists

In contrast to free market capitalism vs capitalism unregulated free market approach, and that of centrally planned command economies, the majority of economists favour come form of government intervention to make capitalism work better, rather than to prevent it working at all.

These include Keynesian economists, whose name is derived from British economist, John Maynard Keynes, and modern Libertarian Paternalists, including Richard Thaler, who are influenced by behavioural economics.

Keynes laid down the basic ground rules for state intervention in markets, and was, perhaps, the most influential economist of the 20th Century.

Thaler has been instrumental in the emergence of behavioural economics, and the use of experimentation to show how behaviour can be nudged towards more effective actions and outcomes.

These groups are pragmatic in that while accepting that capitalism is the most effective system on which to base a modern economy, it requires considerable intervention at significant times.

In reality, all economies are mixed, though there are wide variations in the amount of mix and the balance between public and private sectors. For example, in Cuba the government allocates the vast majority of resources, while in Europe most economies have an even mix between markets and planning.

Economic systems can be evaluated in terms of how efficient they are in achieving economic objectives.

Business Economics


Jessica Allen2021-09-05T03:15:55-04:00

What Is Stagflation?

Stagflation is a combination of high inflation, high unemployment, and stagnant economic growth. Because inflation isn't supposed to occur in a weak economy, stagflation is an unnatural situation.  Slow growth prevents inflation in a normal .

Jessica Allen2021-07-20T14:12:46-04:00

What Is Laissez-Faire Economic Theory?

The laissez-faire economic theory centers on the restriction of government intervention in the economy. According to laissez-faire economics, the economy is at its strongest when the government protects individuals' rights but otherwise doesn't intervene. The .

Nikolay Krylovskiy2021-06-08T10:21:20-04:00

What Is Adverse Selection?

What Is Adverse Selection? Adverse selection is a term that describes the presence of unequal information between buyers and sellers, distorting the market and creating conditions that can lead to an economic collapse. It develops .

Nikolay Krylovskiy2020-11-03T18:08:31-05:00

Explaining The K-Shaped Economic Recovery from Covid-19

Explaining The K-Shaped Economic Recovery from Covid-19 A K-shaped recovery exists post-recession where various segments of the economy recover at their own rates or levels, as opposed to a uniform recovery where each industry takes the same .

Nikolay Krylovskiy2020-10-13T10:36:11-04:00

Does Public Choice Theory Affect Economic Output?

Does Public Choice Theory Affect Economic Output? Both on paper and in real life, there is a solid relationship between economics, public choice, and politics. The economy is one of the major political arenas after all. .

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Largest Retail Bankruptcies Caused By 2020 Pandemic

Largest Retail Bankruptcies Caused By 2020 Pandemic As we know at this point, the COVID-19 pandemic has thrown major companies in the US and the world over into complete havoc. Many have filed for bankruptcy, with an .

Nikolay Krylovskiy2020-01-15T15:18:42-05:00Источник: https://www.economicsonline.co.uk/Competitive_markets/Economic_systems.html

Related Videos

Free market capitalism vs capitalism -

The main difference between capitalism and socialism is the extent of government intervention in the economy.

A capitalist economic system is characterised by private ownership of assets and business. A capitalist economy relies on free-markets to determine, price, incomes, wealth and distribution of goods.

A socialist economic system is characterised by greater government intervention to re-allocate resources in a more egalitarian way.

There are also different aims of the economic systems.

Equality

  • Capitalism is unconcerned about equity. It is argued that inequality is essential to encourage innovation and economic development.
  • Socialism is concerned with redistributing resources from the rich to the poor. This is to ensure everyone has both equal opportunities and in some forms of socialism – equal outcomes.

Ownership

  • Capitalism – Private businesses will be owned by private individuals/companies
  • Socialism – The state will own and control the main means of production. In some models of socialism, ownership would not be by the government but worker co-operatives.

Efficiency

  • Capitalism. It is argued that the profit incentive encourages firms to be more efficient, cut costs and innovate new products that people want. If firms fail to keep up, they will go out of business. But, this business failure allows resources to flow to new more efficient areas of the economy. Something known as ‘creative destruction’
  • Socialism. It is argued that state ownership often leads to inefficiency because workers and managers lack any real incentive to cut costs. One joke under Soviet Communism was ‘They pretend to pay us. We pretend to work.’

Unemployment

  • In capitalist economic systems, the state doesn’t directly provide jobs. Therefore in times of recession, unemployment in capitalist economic systems can rise to very high levels, e.g. 20% + in Great Depression
  • Employment is often directed by the state. Therefore, the state can provide full employment even if workers are not doing anything particularly essential. Socialism is sometimes associated with Keynesian demand-management – attempts to stimulate the economy in times of slump. Keynes himself was not a socialist.

Price controls

  • Prices are determined by market forces. Firms with monopoly power may be able to exploit their position and charge much higher prices.
  • In a state-managed economy, prices are usually set by the government this can lead to shortages and surpluses.

Evaluation

There are many different forms of ‘socialism’ from totalitarian ‘Communist regimes’ To democratic socialist parties in Western Europe, who pursue a pragmatic form of redistribution – aiming for equality of opportunity rather than equality of outcome.

Pragmatic socialism

Some forms of socialism, adopt a more pragmatic approach. Many industries are left in private hands – a recognition free-markets are more efficient in producing goods. However, the socialist society attempts to use progressive taxation and social spending to provide a minimum safety net. Important public services are run directly by the government.

Responsible capitalism

Many ‘advanced capitalist societies’ have considerable government intervention. The government may provide unemployment benefits and public spending on infrastructure, healthcare and education.

Related

Published 28 Oct 2018, Tejvan Pettinger. www.economicshelp.org

Источник: https://www.economicshelp.org/blog/glossary/capitalism-v-socialism/

How Is a Capitalist System Different Than a Free Market System?

Is Free Market the Same as Capitalism?

A capitalist economy and a free market economy are two types of economic systems. Often the terms are used interchangeably, especially in casual parlance. But, while they have overlapping qualities, the two are not quite the same thing.

Capitalist and free-market systems do spring from the same economic soil, so to speak: the law of supply and demand, which becomes the basis to determine the price and production of goods and services.

But they refer to different things. Capitalism is focused on the creation of wealth and ownership of capital and factors of production, whereas a free market system is focused on the exchange of wealth or goods and services.

Key Takeaways

  • The free market and capitalism are not identical economic systems, though they often go hand-in-hand.
  • Capitalism refers to the creation of wealth and ownership of capital, production, and distribution, whereas a free market system has to do with the exchange of wealth or goods and services.
  • Key features of capitalism include personal ownership of property, open competition, and individual incentives.
  • A free-market system is ruled entirely by demand and supply from buyers and sellers, with little or no government regulation.
  • Many capitalistic nations, including the U.S., actually have mixed economies: While elements of the free market reign, considerable state oversight, taxation, and regulations exist, especially in particular sectors.

Key Differences Between Capitalism and Free Market

Some key features of capitalism include the competition between companies and owners, private ownership, and motivation to generate a profit. In a capitalistic society, the production and pricing of goods and services are largely determined by supply and demand—the free market—but some government regulation and oversight may occur. And the profits of capitalist endeavors can be taxed heavily.

Also, the market may be free in name only: A private owner in a capitalist system can have a monopoly in a particular field or geographic area, preventing true competition.

In contrast, a free market system is ruled entirely by demand and supply, and there is little or no government regulation. In a free market system, a buyer and a seller transact freely and only when they voluntarily agree on the price of a good or service.

For example, suppose a seller wants to sell a toy for $5, and a buyer wants to buy that toy for $3. A transaction will occur when the buyer and the seller agree on a price. Because a free market system is based solely on supply and demand, it leads to free competition in the economy, without any intervention from outside forces.

It is possible to have a capitalist economy without complete free enterprise, and possible to have a free market without capitalism.

Free Market Examples

Free markets are all around us, relatively speaking. Each country has free-market aspects, although there is no totally pure free market; it's more a concept than a tangible reality. Most countries have a mixed economy or mixed economic system.

For example, the U.S. is often considered a highly capitalist country, its economy embodying the essence of a free market. However, economy-evaluating sources often don't consider it 100% pure, because there are federal minimum wages and antitrust laws; regulations imposed by government agencies like the SEC; and corporate taxes, along with import and export tariffs.

For example, the conservative think tank Heritage Foundation's 2021 Index of Economic Freedom, which ranks nations on a 100-point scale, gives the U.S. a score of 75, which places it in the second-tier “mostly free” category (the U.S. ranks 20th on the overall list).

The U.S. fares a little better in the "Economic Freedom of the World: 2020 Annual Report," issued by the Fraser Institute of Canada, another think tank. Scoring 8.22 out of a possible 10, it comes in sixth place on the world rankings roster—squarely in the highest "most free" category (Hong Kong ranks as number one on the list overall).

On the other end of the spectrum, there are countries that are considered “repressed” (as the Heritage Foundation puts it). These countries have virtually no economic freedoms. The most repressed, according to the 2021 rankings, is North Korea (ranked 178th), with Venezuela (177th) and Cuba (176th) also at the bottom of the list.

In the Fraser Institute report, Venezuela ranks as the "least free"—ranking 162nd, the bottom of the list. Other low scorers include Libya (160th), Iran (158th), and Algeria (157th).

Georgia, the small country that was previously part of the Soviet Union, has made great strides over the years when it comes to becoming more of a free market. Focusing on flat-tax rates and privatization, the country ranks 12th when it comes to economic freedoms with an overall freedom score of 77.2. Its score in 1998 was 52.5 and 69.8 in 2008.

The No. 1 Free Market Economy

For years, Hong Kong was often cited as the country closest to a completely free-market economy. It was rated no. 1 or no. 2, heading the “free” category (the highest level), for more than two decades on the Heritage Foundation's list. It still tops the Fraser Economic Freedom of the World Index.

However, one could argue that Hong Kong, under China's control since the mid-1990s, isn't truly an independent nation—especially given the Chinese government's increasing interventions in its economy in 2019-20. For that reason, it's not on the Heritage Foundation 2021 list at all.

Instead, the Heritage top spot goes to Singapore; with a score of 89.7, it's been has been ranked the freest in the world for the second year in a row. Singapore occupies the no. 2 spot on the Fraser index.

Though no country is 100% unregulated, Singapore is as close as it comes. The government is very pro-business and open to global investment; legislation is lax, and the corporate tax rate is a low 17%.

The people there are living long lives and seeing a consistent rise in wages—having a gross domestic product (GDP) per capita that’s among the highest in the world, which helps propagate economic freedoms. Singapore also has strong access to global trade and property rights.

The opposite of a free market economy is a planned, controlled, or command economy. The government controls the means of production and the distribution of wealth, dictating the prices of goods and services and the wages workers receive.

What Does Free Market Capitalism Mean?

Any economy is capitalist as long as private individuals control the factors of production. A purely capitalist economy is also a free market economy, meaning the law of supply and demand, rather than a central government, regulates production, labor, and the marketplace. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services. The profit motive drives all commerce and forces businesses to operate as efficiently as possible to avoid losing market share to competitors.

Can You Have a Free Market Without Capitalism?

Yes, a free market can exist without capitalism. It can exist under socialism, as long as there is an absence of coerced (forced) transactions or conditions on transactions, or in other sorts of communal/mutualistic societies, such as those that Native American tribes had.

That said, most free markets tend to coincide with countries and societies that value private property and capitalism and shy away from state ownership and regulations. Free markets are more likely to grow and thrive in a system where property rights are well protected and individuals have an incentive to invest, acquire, build, and pursue profits.

What Is a Capitalist Economy Example?

New Zealand is a prime example of a capitalist economy. This wealthy country in the Asian Pacific region has systemically deregulated and privatized many industrial and professional sectors since the 1980s. Its judicial system recognizes and enforces private property interests and contracts. Government subsidies are low, and an open, liberal attitude to global trade and investment is well-established. Tariffs are low on imports and exports, which comprise around 50% of New Zealand's GDP.

Is the U.S. a Free Market?

Yes, the U.S. is largely—but not completely—a free market. Although it is primarily capitalistic—that is, private ownership of property and production predominates—and the laws of supply and demand largely rule the economy, it has some socialistic elements: The government does play a role in economic affairs and financial policies.

The U.S., strictly speaking, is considered to have a mixed economy: Some aspects of it are free and unfettered, while others are state-controlled or highly regulated.

Is Free Market Capitalism Good?

Whether free-market capitalism is good or bad has long been a source of debate, dating back to the mid-1800s, when capitalism began to flourish in developed nations—along with criticisms of it by proponents of alternative systems, like communism.

Advocates of free-market capitalism argue that private ownership and open, unregulated exchange of goods and services is the fairest and most efficient path to economic growth and progress. Nothing can replace the motivational power of personal incentives, individual freedom, and open competition, they say.

Critics counter that free-market capitalism promotes inequality, concentrating and keeping power in the hands of a minority, who then exploit the majority. It prioritizes individual profit above society's well-being, dividing people into "haves" and "have-nots."

Proponents note that many of the most prosperous and advanced countries in the world practice free-market capitalism, making them a model for developing nations. But skeptics note these systems aren't always pure—they possess strong socialist characteristics and elements of controlled economies as well.

For example, one could argue that the U.S.—widely seen as one of the avatars of a free market capitalist system—achieved its 20th-century heights of power and prosperity only after the expansion of government controls, social programs, and oversight/intervention agencies via the New Deal of the 1930s and the Great Society of the 1960s.

Источник: https://www.investopedia.com/ask/answers/042215/what-difference-between-capitalist-system-and-free-market-system.asp

Economic systems

There are two basic solutions to the economic problem as described by Paul Samuelson, namely those based on free markets and those based on central panning.

Free market economies

Markets enable mutually beneficial exchange between producers and consumers, and systems that rely on markets to solve the economic problem are called market economies. In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined consumers, how to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers. Market economies work by allowing the direct interaction of consumers and producers who are pursuing their own self-interest. The pursuit of self-interest is at the heart of free market economics.

Market economies

Command economies

The second solution to the economic problem is the allocation of scarce resources by government, or an agency appointed by the government. This method is referred to as central planning, and economies that exclusively use central planning are called command economies. In other words governments direct or command resources to be used in particular ways. For example, governments can force citizens to pay taxes and decide how many roads or hospitals are built.

Command economies have certain advantages over free market economies, especially in terms of the coordination of scarce resources at times of crisis, such as a war or following a natural disaster. Free markets also fail at times to allocate resources efficiently, so remedies often involve the allocation of resources by government to compensate for these failures.

Command economies

Command economies have certain advantages over free market economies, especially in terms of the coordination of scarce resources at times of crisis, such as a war or natural disaster. Free markets also fail at times to allocate resources efficiently, so remedies often involve the allocation of resources by government to compensate for these failures.

Communism

The benefits of command economies over free market capitalism became the central economic idea of German philosopher and economist, Karl Marx, who advocated state ownership of the means of production – namely, land and capital. He also predicted the eventual collapse of capitalism. The real value of an economic activity, Marx argued, could always be traced back to labour rather than capital, and hence capitalism’s pursuit of higher profits though the accumulation of capital was always at the expense of labour, who would increasingly have to produce more and more output to satisfy the needs of capitalists.

According to Marx, when the ‘reality’ of this sets in, labour would realise it was being exploited and would rise up and overthrow ther capitalist ‘masters’. While the ideas of Marx seem out of touch with the reality of history, Marx’s economic theories are widely studied and still influential.

Mixed economies

There is a third type of economy involving a combination of market forces and central planning, called mixed economies.

Mixed economies may have a distinct private sector, where resources are allocated primarily by market forces, such as the grocery sector of the UK economy. Mixed economies may also have a distinct public sector, where resources are allocated mainly by government, such as defence, police, and fire services.  In many sectors, resources are allocated by a combination of markets and panning, such as healthcare and, which have both public and private provision.

Mixed economies

Interventionist economists

In contrast to the unregulated free market approach, and that of centrally planned command economies, the majority of economists favour come form of government intervention to make capitalism work better, rather than to prevent it working at all.

These include Keynesian economists, whose name is derived from British economist, John Maynard Keynes, and modern Libertarian Paternalists, including Richard Thaler, who are influenced by behavioural economics.

Keynes laid down the basic ground rules for state intervention in markets, and was, perhaps, the most influential economist of the 20th Century.

Thaler has been instrumental in the emergence of behavioural economics, and the use of experimentation to show how behaviour can be nudged towards more effective actions and outcomes.

These groups are pragmatic in that while accepting that capitalism is the most effective system on which to base a modern economy, it requires considerable intervention at significant times.

In reality, all economies are mixed, though there are wide variations in the amount of mix and the balance between public and private sectors. For example, in Cuba the government allocates the vast majority of resources, while in Europe most economies have an even mix between markets and planning.

Economic systems can be evaluated in terms of how efficient they are in achieving economic objectives.

Business Economics


Jessica Allen2021-09-05T03:15:55-04:00

What Is Stagflation?

Stagflation is a combination of high inflation, high unemployment, and stagnant economic growth. Because inflation isn't supposed to occur in a weak economy, stagflation is an unnatural situation.  Slow growth prevents inflation in a normal ...

Jessica Allen2021-07-20T14:12:46-04:00

What Is Laissez-Faire Economic Theory?

The laissez-faire economic theory centers on the restriction of government intervention in the economy. According to laissez-faire economics, the economy is at its strongest when the government protects individuals' rights but otherwise doesn't intervene. The ...

Nikolay Krylovskiy2021-06-08T10:21:20-04:00

What Is Adverse Selection?

What Is Adverse Selection? Adverse selection is a term that describes the presence of unequal information between buyers and sellers, distorting the market and creating conditions that can lead to an economic collapse. It develops ...

Nikolay Krylovskiy2020-11-03T18:08:31-05:00

Explaining The K-Shaped Economic Recovery from Covid-19

Explaining The K-Shaped Economic Recovery from Covid-19 A K-shaped recovery exists post-recession where various segments of the economy recover at their own rates or levels, as opposed to a uniform recovery where each industry takes the same ...

Nikolay Krylovskiy2020-10-13T10:36:11-04:00

Does Public Choice Theory Affect Economic Output?

Does Public Choice Theory Affect Economic Output? Both on paper and in real life, there is a solid relationship between economics, public choice, and politics. The economy is one of the major political arenas after all. ...

Nikolay Krylovskiy2020-10-13T10:22:10-04:00

Largest Retail Bankruptcies Caused By 2020 Pandemic

Largest Retail Bankruptcies Caused By 2020 Pandemic As we know at this point, the COVID-19 pandemic has thrown major companies in the US and the world over into complete havoc. Many have filed for bankruptcy, with an ...

Nikolay Krylovskiy2020-01-15T15:18:42-05:00Источник: https://www.economicsonline.co.uk/Competitive_markets/Economic_systems.html

Free market

Form of market-based economy

For economic systems where markets (either free or regulated) are the primary allocation mechanism, see Market economy.

"Free enterprise" redirects here. For other uses, see Free enterprise (disambiguation).

In economics, a free market is a system in which the prices for goods and services are self-regulated by buyers and sellers negotiating in an open market. In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority, and from all forms of economic privilege, monopolies and artificial scarcities.[1] Proponents of the concept of free market contrast it with a regulated market in which a government intervenes in supply and demand through various methods such as tariffs used to restrict trade and to protect the local economy. In an idealized free-market economy, also called a liberal market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy.

Scholars contrast the concept of a free market with the concept of a coordinated market in fields of study such as political economy, new institutional economics, economic sociology and political science. All of these fields emphasize the importance in currently existing market systems of rule-making institutions external to the simple forces of supply and demand which create space for those forces to operate to control productive output and distribution. Although free markets are commonly associated with capitalism in contemporary usage and popular culture, free markets have also been components in some forms of socialism.[2]

Criticism of the theoretical concept may regard systems with significant market power, inequality of bargaining power, or information asymmetry as less than free, with regulation being necessary to control those imbalances in order to allow markets to function more efficiently as well as produce more desirable social outcomes.

Economic systems[edit]

Capitalism[edit]

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit.[3][4][5][6] Central characteristics of capitalism include capital accumulation, competitive markets, a price system, private property and the recognition of property rights, voluntary exchange and wage labor.[7][8] In a capitalist market economy, decision-making and investments are determined by every owner of wealth, property or production ability in capital and financial markets whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.[9]

Economists, historians, political economists and sociologists have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire or free-market capitalism, state capitalism and welfare capitalism. Different forms of capitalism feature varying degrees of free markets, public ownership,[10] obstacles to free competition and state-sanctioned social policies. The degree of competition in markets and the role of intervention and regulation as well as the scope of state ownership vary across different models of capitalism.[11][12] The extent to which different markets are free and the rules defining private property are matters of politics and policy. Most of the existing capitalist economies are mixed economies that combine elements of free markets with state intervention and in some cases economic planning.[13]

Market economies have existed under many forms of government and in many different times, places and cultures. Modern capitalist societies—marked by a universalization of money-based social relations, a consistently large and system-wide class of workers who must work for wages (the proletariat) and a capitalist class which owns the means of production—developed in Western Europe in a process that led to the Industrial Revolution. Capitalist systems with varying degrees of direct government intervention have since become dominant in the Western world and continue to spread. Capitalism has been shown to be strongly correlated with economic growth.[14]

Georgism[edit]

Main article: Georgism

For classical economists such as Adam Smith, the term free market does not necessarily refer to a market free from government interference, but rather free from all forms of economic privilege, monopolies and artificial scarcities.[1] This implies that economic rents, i.e. profits generated from a lack of perfect competition, must be reduced or eliminated as much as possible through free competition.

Economic theory suggests the returns to land and other natural resources are economic rents that cannot be reduced in such a way because of their perfect inelastic supply.[15] Some economic thinkers emphasize the need to share those rents as an essential requirement for a well functioning market. It is suggested this would both eliminate the need for regular taxes that have a negative effect on trade (see deadweight loss) as well as release land and resources that are speculated upon or monopolised. Two features that improve the competition and free market mechanisms. Winston Churchill supported this view by the following statement: "Land is the mother of all monopoly".[16] The American economist and social philosopher Henry George, the most famous proponent of this thesis, wanted to accomplish this through a high land value tax that replaces all other taxes.[17] Followers of his ideas are often called Georgists or geoists and geolibertarians.

Léon Walras, one of the founders of the neoclassical economics who helped formulate the general equilibrium theory, had a very similar view. He argued that free competition could only be realized under conditions of state ownership of natural resources and land. Additionally, income taxes could be eliminated because the state would receive income to finance public services through owning such resources and enterprises.[18]

Laissez-faire[edit]

Main article: Laissez-faire

The laissez-faire principle expresses a preference for an absence of non-market pressures on prices and wages such as those from discriminatory government taxes, subsidies, tariffs, regulations of purely private behavior, or government-granted or coercive monopolies. In The Pure Theory of Capital, Friedrich Hayek argued that the goal is the preservation of the unique information contained in the price itself.[19]

The definition of free market has been disputed and made complex by collectivist political philosophers and socialist economic ideas.[1] This contention arose from the divergence from classical economists such as Richard Cantillon, Adam Smith, David Ricardo and Thomas Robert Malthus and from the continental economics developed primarily by the Spanish scholastic and French classical economists, including Anne-Robert-Jacques Turgot, Baron de Laune, Jean-Baptiste Say and Frédéric Bastiat. During the marginal revolution, subjective value theory was rediscovered.[20]

Although laissez-faire has been commonly associated with capitalism, there is a similar economic theory associated with socialism called left-wing or socialist laissez-faire, also known as free-market anarchism, free-market anti-capitalism and free-market socialism to distinguish it from laissez-faire capitalism.[21][22][23] Critics of laissez-faire as commonly understood argue that a truly laissez-faire system would be anti-capitalist and socialist.[24][25] American individualist anarchists such as Benjamin Tucker saw themselves as economic free-market socialists and political individualists while arguing that their "anarchistic socialism" or "individual anarchism" was "consistent Manchesterism".[26]

Socialism[edit]

Main article: Socialism

See also: Socialist economics

Various forms of socialism based on free markets have existed since the 19th century. Early notable socialist proponents of free markets include Pierre-Joseph Proudhon, Benjamin Tucker and the Ricardian socialists. These economists believed that genuinely free markets and voluntary exchange could not exist within the exploitative conditions of capitalism. These proposals ranged from various forms of worker cooperatives operating in a free-market economy such as the mutualist system proposed by Proudhon, to state-owned enterprises operating in unregulated and open markets. These models of socialism are not to be confused with other forms of market socialism (e.g. the Lange model) where publicly owned enterprises are coordinated by various degrees of economic planning, or where capital good prices are determined through marginal cost pricing.

Advocates of free-market socialism such as Jaroslav Vanek argue that genuinely free markets are not possible under conditions of private ownership of productive property. Instead, he contends that the class differences and inequalities in income and power that result from private ownership enable the interests of the dominant class to skew the market to their favor, either in the form of monopoly and market power, or by utilizing their wealth and resources to legislate government policies that benefit their specific business interests. Additionally, Vanek states that workers in a socialist economy based on cooperative and self-managed enterprises have stronger incentives to maximize productivity because they would receive a share of the profits (based on the overall performance of their enterprise) in addition to receiving their fixed wage or salary. The stronger incentives to maximize productivity that he conceives as possible in a socialist economy based on cooperative and self-managed enterprises might be accomplished in a free-market economy if employee-owned companies were the norm as envisioned by various thinkers including Louis O. Kelso and James S. Albus.[27]

Socialists also assert that free-market capitalism leads to an excessively skewed distributions of income and economic instabilities which in turn leads to social instability. Corrective measures in the form of social welfare, re-distributive taxation and regulatory measures and their associated administrative costs which are required create agency costs for society. These costs would not be required in a self-managed socialist economy.[28]

Concepts[edit]

Economic equilibrium[edit]

Main article: Economic equilibrium

With varying degrees of mathematical rigor over time, the general equilibrium theory has demonstrated that under certain conditions of competition the law of supply and demand predominates in this ideal free and competitive market, influencing prices toward an equilibrium that balances the demands for the products against the supplies.[29] At these equilibrium prices, the market distributes the products to the purchasers according to each purchaser's preference or utility for each product and within the relative limits of each buyer's purchasing power. This result is described as market efficiency, or more specifically a Pareto optimum.

This equilibrating behavior of free markets requires certain assumptions about their agents—collectively known as perfect competition—which therefore cannot be results of the market that they create. Among these assumptions are several which are impossible to fully achieve in a real market, such as complete information, interchangeable goods and services and lack of market power. The question then is what approximations of these conditions guarantee approximations of market efficiency and which failures in competition generate overall market failures. Several Nobel Prizes in Economics have been awarded for analyses of market failures due to asymmetric information.

Low barriers to entry[edit]

Main article: Barriers to entry

A free market does not require the existence of competition, however, it does require a framework that allows new market entrants. Hence, in the lack of coercive barriers, for example, paid licensing certification for certain services and businesses, competition between businesses flourishes all through the demands of consumers, or buyers. It often suggests the presence of the profit motive, although neither a profit motive or profit itself are necessary for a free market.[citation needed] 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.

Perfect competition and market failure[edit]

Main articles: Market failure and Perfect competition

Conditions that must exist for unregulated markets to behave as free markets are summarized at perfect competition. An absence of any of these perfect competition ideal conditions is a market failure. Most schools of economics[which?] allow that regulatory intervention may provide a substitute force to counter a market failure. Under this thinking, this form of market regulation may be better than an unregulated market at providing a free market.

Spontaneous order[edit]

Main article: Spontaneous order

See also: Invisible hand

Friedrich Hayek popularized the view that market economies promote spontaneous order which results in a better "allocation of societal resources than any design could achieve".[30] According to this view, market economies are characterized by the formation of complex transactional networks that produce and distribute goods and services throughout the economy. These networks are not designed, but they nevertheless emerge as a result of decentralized individual economic decisions. The idea of spontaneous order is an elaboration on the invisible hand proposed by Adam Smith in The Wealth of Nations. About the individual, Smith wrote:

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.[31]

Smith pointed out that one does not get one's dinner by appealing to the brother-love of the butcher, the farmer or the baker. Rather, one appeals to their self-interest and pays them for their labor, arguing:

It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.[32]

Supporters of this view claim that spontaneous order is superior to any order that does not allow individuals to make their own choices of what to produce, what to buy, what to sell and at what prices due to the number and complexity of the factors involved. They further believe that any attempt to implement central planning will result in more disorder, or a less efficient production and distribution of goods and services.

Critics such as political economist Karl Polanyi question whether a spontaneously ordered market can exist, completely free of distortions of political policy, claiming that even the ostensibly freest markets require a state to exercise coercive power in some areas, namely to enforce contracts, govern the formation of labor unions, spell out the rights and obligations of corporations, shape who has standing to bring legal actions and define what constitutes an unacceptable conflict of interest.[33]

Supply and demand[edit]

Main article: Supply and demand

Demand for an item (such as goods or services) refers to the economic market pressure from people trying to buy it. Buyers have a maximum price they are willing to pay and sellers have a minimum price they are willing to offer their product. The point at which the supply and demand curves meet is the equilibrium price of the good and quantity demanded. Sellers willing to offer their goods at a lower price than the equilibrium price receive the difference as producer surplus. Buyers willing to pay for goods at a higher price than the equilibrium price receive the difference as consumer surplus.[34]

The model is commonly applied to wages in the market for labor. The typical roles of supplier and consumer are reversed. The suppliers are individuals, who try to sell (supply) their labor for the highest price. The consumers are businesses, which try to buy (demand) the type of labor they need at the lowest price. As more people offer their labor in that market, the equilibrium wage decreases and the equilibrium level of employment increases as the supply curve shifts to the right. The opposite happens if fewer people offer their wages in the market as the supply curve shifts to the left.[34]

In a free market, individuals and firms taking part in these transactions have the liberty to enter, leave and participate in the market as they so choose. Prices and quantities are allowed to adjust according to economic conditions in order to reach equilibrium and properly allocate resources. However, in many countries around the world governments seek to intervene in the free market in order to achieve certain social or political agendas.[35] Governments may attempt to create social equality or equality of outcome by intervening in the market through actions such as imposing a minimum wage (price floor) or erecting price controls (price ceiling). Other lesser-known goals are also pursued, such as in the United States, where the federal government subsidizes owners of fertile land to not grow crops in order to prevent the supply curve from further shifting to the right and decreasing the equilibrium price. This is done under the justification of maintaining farmers' profits; due to the relative inelasticity of demand for crops, increased supply would lower the price but not significantly increase quantity demanded, thus placing pressure on farmers to exit the market.[36] Those interventions are often done in the name of maintaining basic assumptions of free markets such as the idea that the costs of production must be included in the price of goods. Pollution and depletion costs are sometimes not included in the cost of production (a manufacturer that withdraws water at one location then discharges it polluted downstream, avoiding the cost of treating the water), therefore governments may opt to impose regulations in an attempt to try to internalize all of the cost of production and ultimately include them in the price of the goods.

Advocates of the free market contend that government intervention hampers economic growth by disrupting the natural allocation of resources according to supply and demand while critics of the free market contend that government intervention is sometimes necessary to protect a country's economy from better-developed and more influential economies, while providing the stability necessary for wise long-term investment. Milton Friedman pointed to failures of central planning, price controls and state-owned corporations, particularly in the Soviet Union and China[37] while Ha-Joon Chang cites the examples of post-war Japan and the growth of South Korea's steel industry.[38]

Criticism[edit]

See also: Criticism of capitalism

Critics of the free market have argued that in real world situations it has proven to be susceptible to the development of price fixing monopolies.[39] Such reasoning has led to government intervention, e.g. the United States antitrust law.

Two prominent Canadian authors argue that government at times has to intervene to ensure competition in large and important industries. Naomi Klein illustrates this roughly in her work The Shock Doctrine and John Ralston Saul more humorously illustrates this through various examples in The Collapse of Globalism and the Reinvention of the World.[40] While its supporters argue that only a free market can create healthy competition and therefore more business and reasonable prices, opponents say that a free market in its purest form may result in the opposite. According to Klein and Ralston, the merging of companies into giant corporations or the privatization of government-run industry and national assets often result in monopolies or oligopolies requiring government intervention to force competition and reasonable prices.[40] Another form of market failure is speculation, where transactions are made to profit from short term fluctuation, rather from the intrinsic value of the companies or products. This criticism has been challenged by historians such as Lawrence Reed, who argued that monopolies have historically failed to form even in the absence of antitrust law.[41][unreliable source?] This is because monopolies are inherently difficult to maintain as a company that tries to maintain its monopoly by buying out new competitors, for instance, is incentivizing newcomers to enter the market in hope of a buy-out. Furthermore, according to writer Walter Lippman and economist Milton Friedman, historical analysis of the formation of monopolies reveals that, contrary to popular belief, these were the result not of unfettered market forces, but of legal privileges granted by government.[42][unreliable source?]

American philosopher and author Cornel West has derisively termed what he perceives as dogmatic arguments for laissez-faire economic policies as free-market fundamentalism. West has contended that such mentality "trivializes the concern for public interest" and "makes money-driven, poll-obsessed elected officials deferential to corporate goals of profit – often at the cost of the common good".[43] American political philosopher Michael J. Sandel contends that in the last thirty years the United States has moved beyond just having a market economy and has become a market society where literally everything is for sale, including aspects of social and civic life such as education, access to justice and political influence.[44] The economic historian Karl Polanyi was highly critical of the idea of the market-based society in his book The Great Transformation, noting that any attempt at its creation would undermine human society and the common good.[45]

Critics of free market economics range from those who reject markets entirely in favour of a planned economy as advocated by various Marxists to those who wish to see market failures regulated to various degrees or supplemented by government interventions. Keynesians support market roles for government such as using fiscal policy for economic stimulus when actions in the private sector lead to sub-optimal economic outcomes of depressions or recessions. Business cycle is used by Keynesians to explain liquidity traps, by which underconsumption occurs, to argue for government intervention with fiscal policy. David McNally of the University of Houston argues in the Marxist tradition that the logic of the market inherently produces inequitable outcomes and leads to unequal exchanges, arguing that Adam Smith's moral intent and moral philosophy espousing equal exchange was undermined by the practice of the free market he championed. According to McNally, the development of the market economy involved coercion, exploitation and violence that Smith's moral philosophy could not countenance. McNally also criticizes market socialists for believing in the possibility of fair markets based on equal exchanges to be achieved by purging parasitical elements from the market economy such as private ownership of the means of production, arguing that market socialism is an oxymoron when socialism is defined as an end to wage labour.[46]

Some would argue that only one known example of a true free market exists, namely the black market. The black market is under constant threat by the police, but under no circumstances do the police regulate the substances that are being created. The black market produces wholly unregulated goods and are purchased and consumed unregulated. That is to say, anyone can produce anything at any time and anyone can purchase anything available at any time. The alternative view is that the black market is not a free market at all since high prices and natural monopolies are often enforced through murder, theft and destruction. Black markets can only exist peripheral to regulated markets where laws are being regularly enforced.[citation needed]

See also[edit]

Notes[edit]

  1. ^ abcPopper, Karl (1994). The Open Society and Its Enemies. Routledge Classics. ISBN .
  2. ^Bockman, Johanna (2011). Markets in the name of Socialism: The Left-Wing origins of Neoliberalism. Stanford University Press. ISBN .
  3. ^Zimbalist, Sherman and Brown, Andrew, Howard J. and Stuart (October 1988). Comparing Economic Systems: A Political-Economic Approach. Harcourt College Pub. pp. 6–7. ISBN .
  4. ^Rosser, Mariana V.; Rosser, J Barkley (23 July 2003). Comparative Economics in a Transforming World Economy. MIT Press. p. 7. ISBN .
  5. ^Chris Jenks. Core Sociological Dichotomies. "Capitalism, as a mode of production, is an economic system of manufacture and exchange which is geared toward the production and sale of commodities within a market for profit, where the manufacture of commodities consists of the use of the formally free labor of workers in exchange for a wage to create commodities in which the manufacturer extracts surplus value from the labor of the workers in terms of the difference between the wages paid to the worker and the value of the commodity produced by him/her to generate that profit." London; Thousand Oaks, CA; New Delhi. Sage. p. 383.
  6. ^Gilpin, Robert (5 June 2018). The Challenge of Global Capitalism : The World Economy in the 21st Century. ISBN . OCLC 1076397003.
  7. ^Heilbroner, Robert L. "Capitalism"Archived 28 October 2017 at the Wayback Machine. Steven N. Durlauf and Lawrence E. Blume, eds. The New Palgrave Dictionary of Economics. 2nd ed. (Palgrave Macmillan, 2008) doi:10.1057/9780230226203.0198.
  8. ^Louis Hyman and Edward E. Baptist (2014). American Capitalism: A ReaderArchived 22 May 2015 at the Wayback Machine. Simon & Schuster. ISBN 978-1-4767-8431-1.
  9. ^Gregory, Paul; Stuart, Robert (2013). The Global Economy and its Economic Systems. South-Western College Pub. p. 41. ISBN .
  10. ^Gregory and Stuart, Paul and Robert (28 February 2013). The Global Economy and its Economic Systems. South-Western College Pub. p. 107. ISBN .
  11. ^Macmillan Dictionary of Modern Economics, 3rd Ed., 1986, p. 54.
  12. ^Bronk, Richard (Summer 2000). "Which model of capitalism?". OECD Observer. Vol. 1999 no. 221–22. OECD. pp. 12–15. Archived from the original on 6 April 2018. Retrieved 6 April 2018.
  13. ^Stilwell, Frank. "Political Economy: the Contest of Economic Ideas". First Edition. Oxford University Press. Melbourne, Australia. 2002.
  14. ^Sy, Wilson N. (18 September 2016). "Capitalism and Economic Growth Across the World". Rochester, NY. SSRN 2840425.
  15. ^Adam Smith, The Wealth of NationsBook V, Chapter 2, Part 2, Article I: Taxes upon the Rent of Houses.
  16. ^House Of Commons May 4th; King's Theatre, Edinburgh, July 17
  17. ^Backhaus, "Henry George's Ingenious Tax," pp. 453–58.
  18. ^Bockman, Johanna (2011). Markets in the name of Socialism: The Left-Wing origins of Neoliberalism. Stanford University Press. p. 21. ISBN .
  19. ^Hayek, Friedrich (1941). The Pure Theory of Capital.
  20. ^Popper, Karl (2002). The Poverty of Historicism. Routledge Classics. ISBN .
  21. ^Chartier, Gary; Johnson, Charles W. (2011). Markets Not Capitalism: Individualist Anarchism Against Bosses, Inequality, Corporate Power, and Structural Poverty. Brooklyn, NY:Minor Compositions/Autonomedia
  22. ^"It introduces an eye-opening approach to radical social thought, rooted equally in libertarian socialism and market anarchism." Chartier, Gary; Johnson, Charles W. (2011). Markets Not Capitalism: Individualist Anarchism Against Bosses, Inequality, Corporate Power, and Structural Poverty. Brooklyn, NY: Minor Compositions/Autonomedia. p. back cover.
  23. ^"But there has always been a market-oriented strand of libertarian socialism that emphasizes voluntary cooperation between producers. And markets, properly understood, have always been about cooperation. As a commenter at Reason magazine's Hit&Run blog, remarking on Jesse Walker's link to the Kelly article, put it: "every trade is a cooperative act." In fact, it's a fairly common observation among market anarchists that genuinely free markets have the most legitimate claim to the label "socialism." "Socialism: A Perfectly Good Word Rehabilitated" by Kevin Carson at website of Center for a Stateless Society.
  24. ^Nick Manley, "Brief Introduction To Left-Wing Laissez Faire Economic Theory: Part One".
  25. ^Nick Manley, "Brief Introduction To Left-Wing Laissez Faire Economic Theory: Part Two".
  26. ^Tucker, Benjamin (1926). Individual Liberty: Selections from the Writings of Benjamin R. Tucker. New York: Vanguard Press. pp. 1–19.
  27. ^"Cooperative Economics: An Interview with Jaroslav Vanek". Interview by Albert Perkins. Retrieved March 17, 2011.
  28. ^The Political Economy of Socialism, by Horvat, Branko (1982), pp. 197–98.
  29. ^Theory of Value by Gérard Debreu.
  30. ^Hayek cited. Petsoulas, Christina. Hayek's Liberalism and Its Origins: His Idea of Spontaneous Order and the Scottish Enlightenment. Routledge. 2001. p. 2.
  31. ^Smith, Adam (1827). The Wealth of Nations. Book IV. p. 184.
  32. ^Smith, Adam (1776). "2". The Wealth of Nations. 1. London: W. Strahan and T. Cadell.
  33. ^Hacker, Jacob S.; Pierson, Paul (2010). Winner-Take-All Politics: How Washington Made the Rich Richer – and Turned Its Back on the Middle Class. Simon & Schuster. p. 55.
  34. ^ abJudd, K. L. (1997). "Computational economics and economic theory: Substitutes or complements?"(PDF). Journal of Economic Dynamics and Control. 21 (6): 907–42. doi:10.1016/S0165-1889(97)00010-9. S2CID 55347101.
  35. ^"Archived copy". Archived from the original on 2014-05-22. Retrieved 2014-06-06.CS1 maint: archived copy as title (link)
  36. ^"Farm Program Pays $1.3 Billion to People Who Don't Farm". Washington Post. 2 July 2006. Retrieved 3 June 2014.
  37. ^Ip, Greg and Mark Whitehouse, "How Milton Friedman Changed Economics, Policy and Markets", Wall Street Journal Online (November 17, 2006).
  38. ^"Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism", Ha-Joon Chang, Bloomsbury Press, ISBN 978-1596915985
  39. ^Tarbell, Ida (1904). The History of the Standard Oil Company. McClure, Phillips and Co.
  40. ^ abSaul, John The End of Globalism.
  41. ^"Cliche #41: "Rockefeller’s Standard Oil Company Proved That We Needed Anti-Trust Laws to Fight Such Market Monopolies", The Freeman, January 23, 2015. Retrieved December 20, 2016.
  42. ^"Why We Need To Re-think Friedman's Ideas About Monopolies". ProMarket. 2021-04-25. Retrieved 2021-09-27.
  43. ^"Cornel West: Democracy Matters", The Globalist, January 24, 2005. Retrieved October 9, 2014.
  44. ^Michael J. Sandel (June 2013). Why we shouldn't trust markets with our civic life. TED. Retrieved January 11, 2015.
  45. ^Henry Farrell (July 18, 2014). The free market is an impossible utopia. The Washington Post. Retrieved January 11, 2015.
  46. ^McNally, David (1993). Against the Market: Political Economy, Market Socialism and the Marxist Critique. Verso. ISBN .

Further reading[edit]

  • Block, Fred and Somers, Margaret R (2014). The Power of Market Fundamentalism: Karl Polanyi's Critique.Harvard University Press. ISBN 0674050711.
  • Boettke, Peter J. "What Went Wrong with Economics?", Critical Review Vol. 11, No. 1, pp. 35, 58.
  • Harcourt, Bernard (2012). The Illusion of Free Markets: Punishment and the Myth of Natural Order.Harvard University Press. ISBN 0674066162.
  • Cox, Harvey (2016). The Market as God. Harvard University Press. ISBN 9780674659681.
  • Hayek, Friedrich A. (1948). Individualism and Economic Order. Chicago: University of Chicago Press. vii, 271, [1].
  • Palda, Filip (2011) Pareto's Republic and the New Science of Peace 2011 [1] chapters online. Published by Cooper-Wolfling. ISBN 978-0-9877880-0-9.
  • Sandel, Michael J. (2013). What Money Can't Buy: The Moral Limits of Markets.Farrar, Straus and Giroux. ISBN 0374533652.
  • Stiglitz, Joseph. (1994). Whither Socialism? Cambridge, Massachusetts: MIT Press.
  • Verhaeghe, Paul (2014). What About Me? The Struggle for Identity in a Market-Based Society. Scribe Publications. ISBN 1922247375.
  • Robert Kuttner, "The Man from Red Vienna" (review of Gareth Dale, Karl Polanyi: A Life on the Left, Columbia University Press, 381 pp.), The New York Review of Books, vol. LXIV, no. 20 (21 December 2017), pp. 55–57. "In sum, Polanyi got some details wrong, but he got the big picture right. Democracy cannot survive an excessively free market; and containing the market is the task of politics. To ignore that is to court fascism." (Robert Kuttner, p. 57).

External links[edit]

Источник: https://en.wikipedia.org/wiki/Free_market

Little Optimism for the Next Generation in Advanced EconomiesAs they continue to struggle with the effects of the Great Recession, publics in advanced economies are pessimistic about the financial prospects for the next generation. Most of those surveyed in richer nations think children in their country will be worse off financially than their parents. In contrast, emerging and developing nations are more optimistic that the next generation will have a higher standard of living.

Overall, optimism is linked with recent national economic performance. Countries that have enjoyed relatively high levels of growth in recent years also register some of the highest levels of confidence in their children’s economic futures.

Education Important for Getting AheadLooking ahead, people in the emerging and developing world see better opportunities at home than abroad. Majorities or pluralities in 30 of the 34 emerging and developing nations surveyed say they would tell young people in their country to stay at home in order to lead a good life, instead of moving to another country.

A good education and hard work are most often seen as the keys to getting ahead in life. This view is especially prevalent in emerging and developing nations, where most see economic opportunity expanding. Still, many also believe success can be determined by things outside a person’s control, such as luck or having a wealthy family.

Inequality Seen as Major ChallengeDespite the long-term optimism that exists in many countries, there are widespread concerns about inequality. Majorities in all of the 44 nations polled say the gap between rich and poor is a big problem facing their countries, and majorities in 28 nations identify this as a very big problem. More than seven-in-ten hold this view in Greece, Spain and Italy – countries that faced significant economic challenges during the last several years. But even in the emerging and developing nations that have enjoyed tremendous growth over the last couple of decades, there is a consensus that those at the top are reaping the gains while others are being left behind.

People blame inequality on a variety of causes, but they see their government’s economic policies as the top culprit. A global median of 29% say those policies are most to blame for the gap between rich and poor. Fewer people blame the amount of workers’ wages, the educational system, the fact that some work harder than others, trade, or the tax system.

The survey also asked what would do more to reduce inequality: low taxes on the wealthy and corporations to encourage investment and growth, or high taxes on the wealthy and corporations to fund programs that help the poor. The balance of opinion in emerging and developing nations is that low taxes are most effective while people in advanced economies tend to favor high taxes.

While inequality is considered a major challenge by a median of 60% across the 44 nations polled, higher numbers say rising prices and a lack of job opportunities (medians of 77%) are very big problems. And people in advanced, emerging and developing markets alike are clearly willing to live with some degree of inequality as part of a free market system. Majorities or pluralities in 38 of 44 countries say that most people are better off in a free market economy, even though some people are rich while others are poor.

Asia Optimistic about Children’s FutureThese are among the key findings of a survey by the Pew Research Center, conducted in 44 countries among 48,643 respondents from March 17 to June 5, 2014. While this report focuses largely on differences and similarities between economically advanced, emerging and developing nations, the survey also finds significant differences by region.

For instance, Asians are particularly optimistic about the next generation’s financial prospects. Fully 94% of Vietnamese, 85% of Chinese, 71% of Bangladeshis, and 67% of Indians think today’s children will be better off than their parents. Africans and Latin Americans are also on balance optimistic, while Middle Easterners tend to be pessimistic. And in Europe and the United States, pessimism is pervasive.

The survey also highlights how Americans are different from many others around the world on questions related to individualism, a value often associated with American exceptionalism. Fifty-seven percent of Americans disagree with the statement “Success in life is pretty much determined by forces outside our control,” a considerably higher percentage than the global median of 38%. Similarly, Americans place an especially strong emphasis on the value of hard work – 73% think it is very important to work hard in order to get ahead in life, compared with a global median of 50%. Americans Stand Out on Individualism

Emerging and Developing Economies See Brighter Future

Better Future for Next Generation?People in emerging and developing nations are more optimistic for the next generation than publics in advanced economies. Still, there is a wide range of attitudes within each group.

About half or more in 16 of the 25 emerging markets surveyed say children in their nation will be better off financially than their parents, including at least seven-in-ten in Vietnam, China, Chile and Brazil. People in Middle Eastern emerging economies, however, are much more skeptical. In Jordan, Turkey, Egypt and Lebanon, roughly a third or fewer say the nation’s children will be better off financially than their parents. Poles are also considerably pessimistic about the next generation’s opportunities, an outlook which may be influenced by the economic crisis in the European Union.

Developing economies are divided on this question. Roughly half or more in Bangladesh, Nicaragua, Senegal, Ghana and Uganda say their children will be more successful than the older generation. Fewer than four-in-ten agree in Tanzania, Kenya, El Salvador and the Palestinian territories.

Publics in advanced economies are the most pessimistic. In most of the high income countries surveyed, three-in-ten or fewer say the nation’s children will surpass their parents financially. Majorities in eight of the 10 countries believe the younger generation will be worse off. The French, Japanese and British are particularly downbeat about the future. Nearly two-thirds of Americans say the same.

In general, countries that have experienced higher economic growth since 2008 are more optimistic for the next generation than publics that have had less growth. For example, in China, which has experienced an average GDP growth of 9% between 2008 and 2013, 85% of the public says young people will be better off financially than their parents. Meanwhile, Italians, who have seen their economy contract by an average of 2% per year over the course of the global recession, are much less optimistic (15%).
GDP Growth and Optimism about Children's Future

In some countries, optimism for the next generation has changed significantly in just the past year and these shifts in attitudes appear to be related in part to changing views about the country’s economy. Today, 51% of Ugandans say children will be better off financially than their parents, compared with 39% last year. Over the same time period, Ugandans also became significantly more positive about the current economy (+18 percentage points). Optimism for young people improved since 2013 as well in Senegal (+12), South Africa (+11), Germany (+10), Pakistan (+8), Egypt (+7) and the UK (+6). At the opposite end, hope for the nation’s youth in Venezuela declined by 18 points in the past year as positive ratings of the economy also fell by 15 points. Optimism about the children’s future also decreased over the past 12 months in Kenya (-19), Malaysia (-14), the Philippines (-11), El Salvador (-8) and .

Most See More Opportunities at HomePerhaps because most publics see a bright future for their nation’s youth, people in emerging and developing nations generally believe that it is better for young people who want to have a good life to stay in their home country, rather than move to another country.

Majorities or pluralities in 30 of the 34 emerging and developing nations surveyed say young people should stay at home to be successful, including more than eight-in-ten in Thailand, Indonesia, Vietnam, Malaysia and Tanzania.

In just seven countries do at least four-in-ten say the next generation has more opportunities abroad. This includes publics that have recently witnessed massive political and economic upheaval, such as the Egyptians, worsening ethnic conflict, such as the Lebanese, and severe gang violence, such as the Salvadorans. Poles are also more inclined than most publics to say that young people should move abroad to have a good life. This may reflect the open borders between Poland and other EU countries as well as dissatisfaction with economic conditions at home.

In some countries, young people, those ages 18-29, are more optimistic than people 50 and older about prospects for the next generation. The age gap is particularly large in Uganda (+22 percentage points children will be better off financially), the UK (+21), Nicaragua (+20), Spain (+19) and Thailand (+15). At the same time, in many countries, young people are also more likely to say there are more opportunities to have a good life abroad than at home. On this question, the biggest age gaps are in Tunisia (+25 percentage points recommend young people move to another country), Brazil (+19), the Palestinian territories (+16) and Chile (+15).

Success May Be Out of Our Control

Most Say Success Determined by Outside ForcesMajorities or pluralities in 28 of the 44 countries surveyed agree that success in life is pretty much determined by forces outside our control. People in developing and emerging markets (medians of 56%) are somewhat more likely to believe their fate is out of their hands than those in advanced economies (51%).

In most developing economies, majorities say success is determined by outside forces, including 74% in Bangladesh and 67% in Ghana. Nicaraguans are the least likely to agree among developing countries.

Majorities in 15 of the 25 emerging markets surveyed also think their fate is out of their hands, including six-in-ten or more in Turkey, Vietnam, South Africa, Malaysia, Poland, Lebanon and Nigeria. Latin American countries are generally the least likely among emerging markets to agree their future is determined by outside forces, including fewer than four-in-ten in Colombia, Mexico and Venezuela.

Meanwhile, in advanced economies, roughly half or fewer in six of the 10 countries surveyed agree that success is out of our control. Americans are the least likely to say they are not the masters of their fate (40%), one of the lowest percentages among the 44 countries surveyed.

Education and Hard Work Seen as the Keys to Moving Up

When asked to rate on a scale of 0 to 10 how important a range of characteristics are to getting ahead in life, most global publics say having a good education (global median of 60% rating this “10 – very important”) and working hard (50%) are very important. Knowing the right people (37%), being lucky (33%), coming from a wealthy family (20%), being born a male (17%) and giving bribes (5%) are seen as less essential to doing well.

Education and Hard Work Important for Getting Ahead
In eight of the nine developing countries surveyed, having a good education tops the list of keys to success. About seven-in-ten or more in Nicaragua (78% rate as 10), El Salvador (72%), Senegal (72%) and Ghana (69%) say education is very important to advancing in life. Only in Uganda is luck seen as roughly equal to education in determining one’s future (67% luck vs. 64% education).

Similarly, the dominant opinion among emerging markets is that having a good education is very important to being successful, a view held by more than eight-in-ten Venezuelans (86% rate as 10), Colombians (85%), Chileans (85%) and Argentines (84%). Working hard is the second most common response in most countries. Poland, Jordan and Egypt are exceptions among the emerging markets – these publics say luck is at least as important, if not more so, as education or hard work for getting ahead in life.

Advanced economies are a bit more divided between education and hard work as the keys to success. Education is the top response among five of the 10 countries – Spain (71% rate as 10), Germany (61%), Israel (41%), Italy (39%) and Greece (31%) – and work ethic is the top in four – the U.S. (73%), UK (60%), Japan (42%) and France (25%). The percentage of Americans who say hard work is very important to getting ahead in life is among the highest across all 44 countries. South Koreans are the only public where knowing the right people is the most commonly cited key to success (rated at the top of the scale by 39%).

Even though few rank knowing the right people, being lucky, being from a wealthy family, or being male as a 10 on the 0-10 importance scale, many people do rate these items highly with a score of seven or more. For example, while a global median of just 33% rank being lucky at 10, 75% rate it at seven or higher. In general, emerging and developing publics are somewhat more likely than advanced economies to believe that all of these items are important for getting ahead.

Being a male does not top the list of keys to success, but there is a large gender gap on the question. In 32 of the 44 countries surveyed, men are significantly more likely than women to say gender is very important to getting ahead. The gender gap on this issue tends to be larger in the emerging and developing economies surveyed.

Inequality a Major Problem

Inequality a Problem, But Not BiggestA global median of 60% say that the gap between rich and poor is a very big problem in their country. Concern is somewhat higher among developing economies and emerging markets (median of 60% in each), but is also shared by people in advanced economies (56%).

Nonetheless, despite this high level of worry about inequality, the issue only ties or tops the list of economic problems in four of the 44 countries surveyed. In general, people in advanced economies tend to worry more about public debt and unemployment than inequality, while those in emerging markets and developing economies are more concerned about inflation and jobs. (For more on views about economic issues, see this September Pew Research report)

Publics Fault Government Policies

The top culprit for income inequality cited by publics around the world is their national government’s economic policies. A global median of 29% say their government’s policies are to blame for the gap between the rich and the poor, while the amount workers are paid is a close second at 23%. Globally, people place less blame on the educational system (11%), a lack of individual hard work (10%), trade between countries (8%) and the structure of the tax system (8%).

Advanced economies in particular lean toward the notion that their governments are to blame for inequality (median of 32%). The Greeks (54%), Spanish (52%) and South Koreans (46%) are government’s harshest critics. Significant percentages among advanced economies also fault workers’ wages for the gap between the rich and the poor, including 29% in Japan and 26% each in France and Germany. The Americans and British are two of the few publics to blame individuals’ lack of hard work (24%) about as much as they do their government’s policies (24% in U.S., 23% in UK).

Government and Workers’ Pay Mostly to Blame for Inequality
Emerging markets are more divided. Pluralities in nine of the 25 countries surveyed blame their government for inequality in their country, including roughly four-in-ten or more in Ukraine (45%), India (45%), Lebanon (43%), China (43%), Tunisia (43%), Turkey (42%) and Nigeria (39%). Meanwhile, pluralities in another six countries say workers’ wages are the primary scapegoat. Latin American publics – such as Brazilians (44%), Chileans (39%) and Colombians (39%) – are particularly likely to blame inadequate take-home pay for the gap between the rich and poor.

People in developing economies are also split between blaming the government for income inequality in their country and faulting workers’ wages. Pluralities in Kenya (36%), Ghana (29%) and Tanzania (29%) say inequality is their government’s fault, while Salvadorans (32%) tend to blame the amount workers are paid. Nearly equal percentages in the Palestinian territories, Bangladesh, Senegal and Uganda say both the government and wages are the culprits. Nicaragua (31%) is the country with the highest percentage who say a lack of individual hard work is the problem.

Many Say Low Taxes Are the Answer

Policies to Reduce Income InequalityPluralities or majorities in 22 of the 44 countries surveyed say to reduce inequality it is more effective to have low taxes on the wealthy and corporations to encourage investment and economic growth rather than high taxes on the wealthy and corporations to fund programs that help the poor. Publics in 13 countries prefer the high tax option.

Overall, advanced economies (median of 48%) are somewhat more supportive than either developing (40%) or emerging (31%) countries of using high taxes on the wealthy and corporations to address income inequality. The broadest support comes from Germany, where 61% favor using high taxes to fund poverty programs. Roughly half or more in Spain (54%), South Korea (53%), the UK (50%) and the U.S. (49%) agree. In Italy (68%), France (61%) and Greece (50%), opinion leans toward low taxes to encourage investment.

In most advanced economies, people who say they are very concerned about inequality are particularly supportive of income redistribution to reduce the gap between the rich and poor. There is also a large ideological divide over taxes in Europe and the U.S. In general, individuals on the left are much more likely than those on the right to prefer high taxes on the wealthy and corporations. For example, 71% of those on the left in Spain support redistribution, compared with 45% of people on the right. In the U.S., 70% of liberals say high taxes are more effective to combat inequality while just 33% of conservatives agree.

The prevailing view in most emerging markets surveyed is that low taxes on the rich and businesses to stimulate growth are a better way to address inequality. Roughly six-in-ten or more express this opinion in Brazil (77%), Argentina (60%), Vietnam (60%) and the Philippines (59%). In just five of the 25 emerging countries do pluralities or majorities pick high taxes as the preferred means of reducing the gap between the rich and poor, including 57% in Jordan, 53% each in Egypt and Chile, 48% in Ukraine and 42% in China.

Developing economies also lean more toward low taxes on the wealthy and corporations to encourage investment rather than high taxes for redistribution. At least half prefer low taxes in Uganda (64%), Ghana (57%), Kenya (52%) and Nicaragua (52%). El Salvador is the only developing economy where a majority (58%) chooses high taxes.

Free Market Seen as Best, Despite Inequality

Despite the fact that most people are very concerned about the gap between the rich and the poor in their country, majorities across the globe are willing to accept some inequality to have a free market system. A global median of 66% say most people are better off under capitalism, even if some people are rich and some are poor.

Belief in the free market tends to be highest in developing countries (median of 71%). Nearly two-thirds or more in all nine of the developing economies surveyed agree that most people benefit from capitalism, including 80% of Bangladeshis, 75% of Ghanaians and 74% of Kenyans.

Support for Free Market SystemPublics in emerging markets also generally support the free market. More than half in 21 of the 25 countries surveyed agree that most people are better off in a free market system even if there is some inequality, including roughly three-quarters or more in Vietnam, China, Nigeria, Turkey, Malaysia and the Philippines. Support is much lower in Colombia, Jordan, Mexico and Argentina. Argentines are the least likely to see the benefits of capitalism among all 44 countries surveyed.

Advanced economies are somewhat more divided over the free market. At least seven-in-ten in South Korea, Germany and the U.S. say most people are better off under capitalism, but fewer than half in Greece, Japan and Spain agree. In most advanced economies, people who say the gap between the rich and poor is a very big problem are much less supportive of the free market than those who worry less about inequality.

In general, there has been moderate change in support for the free market between 2007 and 2014 among the countries surveyed in both years. The Spanish (-22 percentage points) and Italians (-16) stand out for their declining belief in capitalism over the course of the global recession. At the other end of the spectrum, the Turks (+14) and Indonesians (+13) are more likely today to say the free market is better for everyone than they were seven years ago.

In some countries, lower income and less educated individuals are less likely to express support for capitalism than higher income and more highly educated people. The gap between lower and higher income people on this question is particularly large in Peru (-23 percentage points), Greece (-20) and France (-17). And the education differences are especially wide in Peru (-20), Pakistan (-18) and Nigeria (-16).

Источник: https://www.pewresearch.org/global/2014/10/09/emerging-and-developing-economies-much-more-optimistic-than-rich-countries-about-the-future/

5 Replies to “Free market capitalism vs capitalism”

  1. @Blues Clues do you know if you have to do your first biweekly claim before you receive your card? I'm waiting for my card before I file a biweekly claim but now I'm hearing I need to file a claim first.

  2. This video wasn't about sending money internationally unfortunately. It was about sending money to friends and family in the US. International is much more difficult because of all the laws and regulations in so many different countries.

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