Free Market; The Road to Economic Prosperity

In most countries, the government controls and regulates the economy in entirety. ?This means that they determine the means of production and the distribution of wealth. They also dictate the prices of goods and services and the wages workers receive. All these make the economy run directly under the control of the government. However, a free market economy is simply the economy that is run without government intervention or regulation. In this type of economy, the government allows people to decide their own prices of goods and services using the demand and supply function. They also leave the decision of trading and methods to the people. In a free market economy, transactions are entered voluntarily.

A free market contributes to economic growth and also ensures a competitive market. In a free market economy, supply and demand create competition, which helps ensure that quality goods or services are provided to consumers at a lower price. Tariffs imposed on imports and exports and legal restrictions among others are all barriers to a free market.

A free market is characterised by private ownership of resources. Free economies exist because a notable portion of resources are owned by individuals or private entities and not a government agency. This makes the owners exercise total control over the means of production, allocation, and product exchange. They also control the labour supply.

Free market is believed to be the most effective way to distribute wealth and promote economic growth. As consumers and businesses freely exchange goods and services, they generate income, which is then used to purchase other goods and services, creating a cycle of economic activity. This, in turn, leads to increased production, higher employment rates, and improved standards of living.

One of the factors that helps a free market economy to thrive is the presence of financial institutions. Banks and other financial institutions exist so that they give individuals and companies the financial or any other means to exchange goods and services, and to provide investment services. The financial institutions make a profit by charging interest or fees on transactions. Therefore, the free market makes financial institutions bloom.

In a free market economy, business owners enjoy the liberty to generate new ideas based on their consumers’ needs. They can create new products and offer new services at any time they wish to. As such, they do not have to rely on government agencies to notify them of consumers’ needs.

The entrepreneurs make their own research and identify trends. The innovation among private companies can lead to competition as every company tries to improve on the features of its products to make them better. This creates an innovation driven competition and society.

Free market through competition, innovation and entrepreneurship allows everybody to grow and makes the economy prosperous.?

However, some critics argue that the free market can lead to inequality and unfairness. For instance, those with more wealth and power are able to dominate the market, leading to the concentration of wealth in the hands of a few. Additionally, the free market is often seen as an impersonal and ruthless system that prioritises profit over social welfare.

Despite these criticisms, the free market remains a popular economic model, as it has consistently proven to be a powerful engine of economic growth and prosperity. By allowing individuals and businesses to freely exchange goods and services, the free market promotes innovation, competition, and efficiency, leading to a more prosperous and dynamic economy.