11-10-2005, 11:40 AM
In common usage capitalism refers to an economic system in which all or most of the means of production are privately owned and operated and where the investment of capital, and the production, distribution and prices of commodities (goods and services) are determined mainly in a free market, rather than by the state. In capitalism, the means of production are generally operated for profit.
http://en.wikipedia.org/wiki/Capitalism
A free market is one in which buyers and sellers make mutually voluntary exchanges at a price agreed upon by both (see market economy). The most controversial idea in economics and political economy, this idea is the polar opposite of the command economy.
A free market is a concept in both ethics and economics treated as an abstract model by many economists and some ethicists. Some economists dismiss the free market model as idealized and impractial. Opponents of free markets sometimes claim that a market where all transfers of money, goods, and services are devoid of coercion and theft has never existed.
Since no country fully manifests the ideal of a free market, the term market economy is used for nation states whose economy contains very little coercion by government. In such an economy, government taxes, but only uses those funds to finance the prohibition of initiatory coercion.
However, a "market economy" that has very substantial regulation is not a "free market economy." Whether any particular economy is free enough of coercion to reasonably be called a free market economy is often a matter of political dispute: libertarians typically say that western economies are not free, and are at best mixed economies, due to what they believe constitutes very significant interference by government in what would otherwise by a free market.
Whether the marketplace should be free is also disputed; many assert that government intervention is necessary to remedy market failure that is held be an inevitable result of absolute adherence to free market principles.
Internationally, free markets are advocated by proponents of economic liberalism, in Europe usually simply called liberalism. In the United States, support for free market economic structures is a key tenet of U.S. conservatism and libertarianism. Since the 1970's, promotion of a global free-market economy, deregulation and privatisation, is often described as neoliberalism.
The term free market economy is generally used to describe western economies, but pro-market groups would only accept that description if the government practices laissez-faire policies, rather than state intervention in the economy. Since the emergence of a distinct economic system in the Soviet Union, the free market is usually contrasted to a command economy and a centrally planned economy. However, early proponents of a market economy in 18th-century Europe contrasted it with the mediaeval and early-modern economies which preceded it.
For social philosophy, a free market is a system for allocating goods within a society: supply and demand within the market determine who gets what, and what is produced. The market does this without prior external decisions or values, and this is seen as its great advantage by its supporters. The allocation function is usually called "the market mechanism", or again simply "the market".
A free market economy is generally understood to be different from pre-modern economic systems. Some were monetarised but that is not seen as sufficient to define a free market. Market transactions are understood to be economic in nature, and personal gift-giving is not generally considered a market transaction. Neither are coerced transfers such as tribute. Lack of economic transactions, for instance in a society of pure subsistence farming, also rules out a free market.
A free market implies the presence of competition, although monopolies that are not maintained through coercion can be present. It often connotates the presence of the profit motive, although neither a profit motive or profit itself necessary for a free market. 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.
Contents
http://en.wikipedia.org/wiki/Free_market
http://en.wikipedia.org/wiki/Capitalism
A free market is one in which buyers and sellers make mutually voluntary exchanges at a price agreed upon by both (see market economy). The most controversial idea in economics and political economy, this idea is the polar opposite of the command economy.
A free market is a concept in both ethics and economics treated as an abstract model by many economists and some ethicists. Some economists dismiss the free market model as idealized and impractial. Opponents of free markets sometimes claim that a market where all transfers of money, goods, and services are devoid of coercion and theft has never existed.
Since no country fully manifests the ideal of a free market, the term market economy is used for nation states whose economy contains very little coercion by government. In such an economy, government taxes, but only uses those funds to finance the prohibition of initiatory coercion.
However, a "market economy" that has very substantial regulation is not a "free market economy." Whether any particular economy is free enough of coercion to reasonably be called a free market economy is often a matter of political dispute: libertarians typically say that western economies are not free, and are at best mixed economies, due to what they believe constitutes very significant interference by government in what would otherwise by a free market.
Whether the marketplace should be free is also disputed; many assert that government intervention is necessary to remedy market failure that is held be an inevitable result of absolute adherence to free market principles.
Internationally, free markets are advocated by proponents of economic liberalism, in Europe usually simply called liberalism. In the United States, support for free market economic structures is a key tenet of U.S. conservatism and libertarianism. Since the 1970's, promotion of a global free-market economy, deregulation and privatisation, is often described as neoliberalism.
The term free market economy is generally used to describe western economies, but pro-market groups would only accept that description if the government practices laissez-faire policies, rather than state intervention in the economy. Since the emergence of a distinct economic system in the Soviet Union, the free market is usually contrasted to a command economy and a centrally planned economy. However, early proponents of a market economy in 18th-century Europe contrasted it with the mediaeval and early-modern economies which preceded it.
For social philosophy, a free market is a system for allocating goods within a society: supply and demand within the market determine who gets what, and what is produced. The market does this without prior external decisions or values, and this is seen as its great advantage by its supporters. The allocation function is usually called "the market mechanism", or again simply "the market".
A free market economy is generally understood to be different from pre-modern economic systems. Some were monetarised but that is not seen as sufficient to define a free market. Market transactions are understood to be economic in nature, and personal gift-giving is not generally considered a market transaction. Neither are coerced transfers such as tribute. Lack of economic transactions, for instance in a society of pure subsistence farming, also rules out a free market.
A free market implies the presence of competition, although monopolies that are not maintained through coercion can be present. It often connotates the presence of the profit motive, although neither a profit motive or profit itself necessary for a free market. 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.
Contents
http://en.wikipedia.org/wiki/Free_market