A market economy, also known as free market economy or a free enterprise economy, is an economic system that is more lenient and allows more freedom in the market. People are allowed to sell what they want at the price they want, with no interference from a government. This definition can be summarized by the french term "Laissez-Faire", simply meaning "let do." It represents the willingness to give freedom to a market so it can develop and flourish on its own. There is currently no pure market economy in the world today; all current economic systems around the world are a mix of a free market economy and a planned economy. This is known as a mixed economy, but in different places there is a different weighting of planned and free market economies.
Milton Friedman was an economist and a public intellectual who had strong positive opinions about the free market economy. He believed that in order to create the sustainability of civil rights and political rights, economic freedom must be given to the market. He wrote the books Capitalism and Freedom and Free to Choose. He explained the free market economy in a way than no one else had, and for it he won a nobel prize.
In his book Free to Choose he stated that "economic freedom is simply a requisite for political freedom. By enabling people to cooperate with one another without coercion or central direction it reduces the area over which political power is exercised."
However, having a market economy can also have negative effects on an economy.
A political cartoon outlining the negative effects of a pure market economy.
For example, if a government does not make any control to
regulate the market, there may be unethical sales and purchases
taking place. Also, without any control on prices competition
could get out of control, and smaller businesses would have
even less of a chance of competing in the market.
Milton Friedman was an economist and a public intellectual who had strong positive opinions about the free market economy. He believed that in order to create the sustainability of civil rights and political rights, economic freedom must be given to the market. He wrote the books Capitalism and Freedom and Free to Choose. He explained the free market economy in a way than no one else had, and for it he won a nobel prize.
In his book Free to Choose he stated that "economic freedom is simply a requisite for political freedom. By enabling people to cooperate with one another without coercion or central direction it reduces the area over which political power is exercised."
However, having a market economy can also have negative effects on an economy.
For example, if a government does not make any control to
regulate the market, there may be unethical sales and purchases
taking place. Also, without any control on prices competition
could get out of control, and smaller businesses would have
even less of a chance of competing in the market.
Bibliography:
http://en.wikipedia.org/wiki/Market_economy
http://www.mcgrawhill.ca/school/secondary/exploring/se/10_Gardener_EG_CH10.pdf