Free Market Economy
The free market is an economic system where the state only intervenes to collect taxes, enforce contracts and private ownership. This means the government in countries with a free market economy does not set the price for goods and services. Instead, suppliers fix prices using the forces of supply and demand from consumers to gauge their worth. The government's intervention can become necessary in some spheres. For example, many developed countries with a free market economy are found literally subsidizing their farm sectors. The same can also be said for other areas where market failure, distortion or the inability of the free market economy to provide vital goods and services needed by people in general at costs they cannot afford might cause hardships. Critics of the free market economy model claim this is mainly a theoretical concept, as every country, even those with capitalist economies, place some restrictions on the ownership, exchange of commodities and put in place lots of subsidies for large businesses. Regardless of the critics, the free market economy is still considered to be the most efficient system to allocate a country's resources, with wealth or income being the only yardstick. It is often associated with Capitalistic Economy and economist Adam Smith's (1723-1790) beliefs that the free market is the best economy for ensuring the maximum wealth of nations and citizens. The free market economy is used in many countries throughout the world including the United States, viewed as a leader in the field. The concept emerged over a period of time in the United States and it was largely possible because of the country's enormous resources and various other endowments. Besides, in the political sphere too it was not burdened with any baggage of history. Hence political democracy could be easily embraced with all of these virtues. The long-term success of the free market can be seen in countries such as the United States, United...
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