The Pros And Cons Of Free Market Economy

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The original allocation of our contemporary free market was England during the first industrial revolution and the birth of Capitalism. This last term refers to a method by which scarce resources can be produced and distributed, differently from free enterprise, which is a set of legal rules regarding commercial interaction. In a free market environment the agents are able to buy and sell their products without strict limitations imposed by the Government, although they are still subjected to some constraints such as prohibition of specific exchanges, taxation, regulations, licensing requirements and price control on production. Laissez-faire capitalism also tends to grow in a system where property rights are well protected and capitalists…show more content…
However, this would not be socially accepted since there would not be any governmental restriction on topics such as child labor, environmental regulations, gas emission, and free trade of narcotics and organs. In fact, no modern country operates with complete freedom. Free enterprise makes the economy spin by allowing business owners to innovate new ideas, develop new products and offer new services on an international scale market, but it also comes with some distinct drawbacks. The outcomes of a free market economy that spins out of control can be severe. Market failures, such as the real estate market crash of 2008, have dramatically diminished the population’s income and job…show more content…
Ethical norms such as friendship, love and loyalty do not have importance in the market, simply because they cannot be exchanged at a price. Not to mention the valuation of nature. Human ignorance about the infinite interactions between the ecosystem and its organisms limits our ability to manipulate nature, and since we rely on the ecosystem to sustain ourselves, we should not disturb it. In a free market economy, nature itself is not valuable until it becomes useful to humans: trees have no value until they are cut down and sold as timber, animals and fish until they are killed and sold as food. In addition to this, a non-regulated market cannot handle alone many essential services that are considered public goods, such as the military, police, public offices and health infrastructures. Government regulations are required to protect consumers, because even if the Laissez-faire capitalism assumes that everybody has equal opportunities, this is not always the case. Examples can be the African-Americans in the USA or ethnic minorities in most Asian societies, where they are often considered inferior in hierarchy, therefore, excluded from opportunities that are available to others. This means that in a functioning free market only

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