Free Market

...the truth shall make you free. John 8.32

A free market

is a type of economic system that is controlled by the market forces of supply and demand.

one can sell any product they wish to sell and at any price.

products are exchanged by a willing buyer and seller.

sellers of different goods do not face any barriers.

ownership of companies and properties

belongs to individuals as opposed to the government.

In this way, the owners exercise total control over the means of production, allocation, and exchange of products.

They also control the labor supply.

any one individual can take part in it.

The decision to produce or consume a particular product is totally voluntary.

It means that companies or individuals can produce or purchase as much or as little of a product as they want.

The absence of governmental influence allows both companies and individuals a wide range of freedom.

business owners enjoy the freedom to come up with new ideas based on the consumers’ needs.

They can create new products and offer new services at any time they want to.

As such, entrepreneurs rarely rely on government agencies to notify them of consumers’ needs.

The entrepreneurs do their own research and identify popular trends.

The innovation among different private companies can lead to competition

as every company tries to improve on the features of its products to make them better.

it is the consumers who decide which products become a success and which ones fail.

When presented with two options of products,

the consumer evaluates the features of each and chooses whichever one they want to,

ideally opting for the one that offers better value for money.

the consumer also influences the price set on a product.

As such, producers need to strike a balance between the price point

that earns them a profit but is still affordable by the average customer.

Good examples of market failure include the Great Depression of the 1930s

(Was this a failure? The Banksters ended up owning very much.<ref>

and the real estate market crash that happened in 2008. (What caused this? Gov.!)

Market failures can lead to devastating outcomes such as unemployment, homelessness, and lost income. (But is self correcting. Example Japan)

 

Summary

The truth shall make you free.

A free market is a self-regulated economy that runs on the basis of demand and supply.

In a truly free market,

a central government agency does not regulate any aspect of the economy.

By removing government regulations,

the nature of the free market forces businesses to provide superior products and services that address consumers’ needs.

A free market economic system also helps sellers to create affordable prices for everyone.

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