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Why does even a free market economy need some government intervention?
Wiki User
∙ 9y ago
Even a free market economy needs government intervention to provide for things that the marketplace does not address.
Wiki User
∙ 9y ago
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Why does even a free enterprise market economy need some government intervention?
Even a free market economy needs government intervention to provide for things that the marketplace does not address.
List of free-market economy countries?
there are no pure market economies today. Even the U.S government, which is commonly known as a market economy, still has some control over decisions.
List all four types of economic system?
the 4 main types of economic systems are: a market economy, a mixed economy, a planed economy, and a traditional economy
Is a free-market economy the same as a market economy?
No. Both have a similarity in a basis in the marketplace. However, a free market is a special case in which there are no external controls on free economic action. Market economies may or may not have such influences, but are only contingent on some basis in the marketplace.For example, the United States is a market economy. But with the degree of government intervention, it is not a free market economy. The closest in the world today is Hong Kong, but a pure free market is as hard to find as pure communism.To expound further, this is a difficult question, as the common meanings of "free market", "market economy", and "true free market" are not what an Economist would define. That is, there is a disjoint between common usage and technical definition.From an Economist's standpoint, and Market Economy is any one which uses the principles of supply/demand and open trade to transact economic activity. As such, the world has come to the point where all countries use a Market Economy.However, inside the category of Market Economy are a large variation in the level of three factors: government regulation, government ownership of industry/infrastructure, and government social programs. An Economist would stay that having more than a very minimal level in each category would move that economy into the Mixed Market Economy category. As current governments have high levels of regulation, some minimal level of government ownership of industry/infrastructure, and at least moderate levels of social programs, it's hard to classify any current nation's economy as anything but a MME. That is, from the Economist's perspective, there are no Free Market economies, let alone True Free Market economies (except in places where there is no functioning government at all, such a places undergoing civil war or in a state of anarchy).To be clear, from an Economist's standpoint, a True Free Market Economy is a form of Market Economy where the government provides only two functions: a single legal common currency, and adjudication of contracts. A Free Market Economy is one where the government would add some lower level of regulation on allowable economic activity, such as pollution controls, or prohibition on certain abusive economic activities (i.e. market manipulation or abuse of monopoly status), but does not engage in either ownership of industry/infrastructure or any government-sponsored wealth transfer (e.g. social programs).So, really, we are splitting hairs. Given that all countries are running an MME (according to an Economist), when ordinary people say "true free market" or "free market", what they are generally referring to is those countries with lower levels of regulation/ownership/social welfare than other countries. In common usage, these terms are relative, not absolute.This can easily be answered without large paragraphs. A free-market economy is called Capitalism. A market economy... It isn't really a term. It is the Same as a Free-market economy. The people closest to this would be the Hong Kongese but even yet, they are what the U.S is: a Mixed Market Economy. Period.
Is Colombia a capitalist command or mixed economy?
Colombia has a 'mixed' economy in terms of a certain level of Government regulation in what can be largely considered a free market economy. This is what most Western economies have. A command economy is what the old Communist States had: economic activity was almost totally dictated by Government demands and regulations. A capitalist economy has almost total freedom of economic activity with an absolute minimum of Government involvement. Not even the US has that, much to the regret of the Tea Party.
Why does even a free enterprise market economy need some government intervention?
Even a free market economy needs government intervention to provide for things that the marketplace does not address.
List of free-market economy countries?
there are no pure market economies today. Even the U.S government, which is commonly known as a market economy, still has some control over decisions.
What drove china to change to a mixed economy?
China understood by experience that entirely depending on domestic market under government control is not suffice to overall development of its economy. So, even being a communist party led government, they moved towards western model of mixed economy where market is the main arbiter.
List all four types of economic system?
the 4 main types of economic systems are: a market economy, a mixed economy, a planed economy, and a traditional economy
Is a free-market economy the same as a market economy?
No. Both have a similarity in a basis in the marketplace. However, a free market is a special case in which there are no external controls on free economic action. Market economies may or may not have such influences, but are only contingent on some basis in the marketplace.For example, the United States is a market economy. But with the degree of government intervention, it is not a free market economy. The closest in the world today is Hong Kong, but a pure free market is as hard to find as pure communism.To expound further, this is a difficult question, as the common meanings of "free market", "market economy", and "true free market" are not what an Economist would define. That is, there is a disjoint between common usage and technical definition.From an Economist's standpoint, and Market Economy is any one which uses the principles of supply/demand and open trade to transact economic activity. As such, the world has come to the point where all countries use a Market Economy.However, inside the category of Market Economy are a large variation in the level of three factors: government regulation, government ownership of industry/infrastructure, and government social programs. An Economist would stay that having more than a very minimal level in each category would move that economy into the Mixed Market Economy category. As current governments have high levels of regulation, some minimal level of government ownership of industry/infrastructure, and at least moderate levels of social programs, it's hard to classify any current nation's economy as anything but a MME. That is, from the Economist's perspective, there are no Free Market economies, let alone True Free Market economies (except in places where there is no functioning government at all, such a places undergoing civil war or in a state of anarchy).To be clear, from an Economist's standpoint, a True Free Market Economy is a form of Market Economy where the government provides only two functions: a single legal common currency, and adjudication of contracts. A Free Market Economy is one where the government would add some lower level of regulation on allowable economic activity, such as pollution controls, or prohibition on certain abusive economic activities (i.e. market manipulation or abuse of monopoly status), but does not engage in either ownership of industry/infrastructure or any government-sponsored wealth transfer (e.g. social programs).So, really, we are splitting hairs. Given that all countries are running an MME (according to an Economist), when ordinary people say "true free market" or "free market", what they are generally referring to is those countries with lower levels of regulation/ownership/social welfare than other countries. In common usage, these terms are relative, not absolute.This can easily be answered without large paragraphs. A free-market economy is called Capitalism. A market economy... It isn't really a term. It is the Same as a Free-market economy. The people closest to this would be the Hong Kongese but even yet, they are what the U.S is: a Mixed Market Economy. Period.
Is Colombia a capitalist command or mixed economy?
Colombia has a 'mixed' economy in terms of a certain level of Government regulation in what can be largely considered a free market economy. This is what most Western economies have. A command economy is what the old Communist States had: economic activity was almost totally dictated by Government demands and regulations. A capitalist economy has almost total freedom of economic activity with an absolute minimum of Government involvement. Not even the US has that, much to the regret of the Tea Party.
Which is an example of a mixed economic system?
A mixed economy is where there is a mix of capitalism and socialism and/or public and government control. A basic contempory example of a mixed economy is the United States.that 's how the part of the unitedstates are also in a market economy.
Conservatism and liberalism?
Conservatives and liberals are on the opposite ends of the political spectrum. Generally, conservatives believe in small amounts of government intervention - i.e., no government controlled businesses, a true free-market system, etc. Liberals, quite easily, are typically the opposite. A liberal will usually believe that some government intervention is unavoidable or necessary, such as social security, the recent aiding of financially unstable banks, and the even more recent public healthcare bill.
Economic systems for Mexico?
Mexico is a developing country with a market economy. It also has some government-owned industries (basically, defense, oil and electricity), but even some of their operation is being subjected to privatization.
What is the Difference between state capitalism and free market capitalism?
The definition of State Capitalism is "an economic system that is primarily capitalistic, but there is some degree of government ownership of the means of production" (http://www.wordnetweb.Princeton.edu/perl/webn) or a capitalist system where the government runs businesses. A popular example of state capitalism is the economy of China, where the state owns thousands of companies. A free market is a theoretical term that economists use to describe a market which is free from governenment intervention, such as no regulation, and minimal government ownership. Examples of this form would be Somalia or Afghanistan. Most capitalist economies fit inbetween these two extremes. The economy of the United States is a free-market economy but also favors a small degree of state enterprise and public goods provided by the state.
Who had the idea that state should not interfere with the economy?
The idea that the State should intervene in the economy as little as possible is generally known as a free market economy. ---------------------------------- In some economies the government takes steps to control the economy and decide who will benefit from it. In some cases a small class or perhaps an ethnic group will control the economy via their majority hold on the government. In other cases the government will skim a percentage off the economy for their personal use. In other cases they will artificially control the foreign exchange rate of their currency to keep their economy's exports strong. (China) In a free market anyone with a good idea, service or product can be successful based on their own efforts. Although even in a "free" economy without some government oversight and control there will be abuses by those who will seek to keep their competition out of the market by many means. So an entirely "free" market probably won't work well either.
Is rationing used in a free market economy?
Technically no, but the government can intervene in some cases and ration even in a capitalistic market. A ration of goods that is below the demand will cause shortages and will create massive lines as seen in the 70's with gas and the 30's with bread.
