Introduction
The present assignment is devoted to the problems of freedom in the markets. We often hear in media, that markets need to be free, especially in our time – time of globalization. There are many international organizations, which were established in order to support freedom of the world market. Statistically, most countries of the world belong to the countries with a free market economy. But are these markets really free? Is it generally possible to find a completely free market? Are there any differences in freedom of the markets, if we compare them in international aspect worldwide? The target of the assignment is to explain, consider, and answer all these questions.
The assignment consists of four parts. In the first part, the definition of a free market will be given. It will be limited, what exactly is to be understood under the term “freedom in a market”, and why do we concentrate on the role of the State in this respect.
The second part of the present assignment answers a question why do markets need rules and referees.
The third part of the assignment is a destabilization of the second part. It also explains what kinds of conflicts and interest splits arise between business community and the State.
In the fourth part of the assignment, the international differences in the degrees of freedom in the markets will be shown as well as the reasons for these differences.
In sum, the major aspects of the issue concerning how markets can be free will be given.
Table of Contents
Introduction
1. Discussion of the concepts of freedom in a market
2. Why markets need rules and referees
3. The interest split of the business community with respect to the role of state
4. International differences in the degrees of freedom in the market and reasons behind them
Objectives and Topics
This assignment explores the theoretical concept of the free market versus the reality of government-regulated economies, aiming to answer whether a truly free market exists and why state intervention is universally present. It investigates the inherent conflicts between profit-driven business actors and the state's mandate to ensure social order and protection.
- The theoretical definition and limitations of "freedom in a market".
- The necessity of state intervention and the role of rules and referees.
- Conflicts of interest between the business community and the state.
- Global variations in market freedom influenced by political, economic, and social factors.
- The impact of globalization on the role of the state in market regulation.
Excerpt from the Book
1. Discussion of the concepts of freedom in a market
First of all to discuss the concepts of freedom in a market we have to define the notion of freedom. Let as analyse the definition of a free market.
A free market is a market where prices of goods and services are arranged completely by the mutual non-coerced consent of sellers and buyers, determined generally by the supply and demand law with no government interference in the regulation of costs, supply and demand.1
As we can see from this definition, the key points or signs of freedom in a market are:
1 free arrangement of prices of goods and services by the supply and demand law;
2 no-coercion or no-discrimination of sellers and buyers;
3 no government interference in the regulation of costs, supply and demand.
Further in this assignment we will restrict us on the last sign of the free market – no government interference into the market, as an of the most important sign of the market’s freedom.
The opposite of the free market is a controlled market, where government sets or regulates prices directly or through regulating supply and demand.2
The consept of the free market describes an ideal market model. Considering the existed markets in the present time we can quickly find out that there is no a completely free market in the world. The question is: why is it so? All markets are seeking to be free, and the majority of economical subjects support the concept of free markets. But in the reality we do not observe any completely free market. We try to answer this question in the part two of this assignment.
Summary of Chapters
Introduction: Provides an overview of the assignment's objectives, which include examining the concept of free markets and the necessity of state intervention in a globalized economy.
1. Discussion of the concepts of freedom in a market: Analyzes the theoretical definition of a free market and concludes that it acts as an ideal model which is not observed in reality.
2. Why markets need rules and referees: Explores the fundamental necessity for state regulation to prevent unethical business practices and protect social order.
3. The interest split of the business community with respect to the role of state: Examines the conflict between the business sector’s desire for independence and their requirement for state-provided legal frameworks and social protection.
4. International differences in the degrees of freedom in the market and reasons behind them: Discusses how political systems, economic development, and social/religious values cause varying levels of market freedom across different nations.
Keywords
Free market, market economy, government interference, globalization, social protection, state regulation, business community, labor market, interest split, economic development, antimonopoly laws, division of labour, strategic industries, developing countries, economic transition.
Frequently Asked Questions
What is the primary focus of this assignment?
The work examines the concept of "freedom" within markets and investigates why a truly free, unregulated market does not exist in the real world.
What are the central thematic fields?
The core themes include the definition of market freedom, the role of the state as a regulator, conflicts of interest between private entities and governments, and international differences in economic regulation.
What is the primary research question?
The assignment seeks to explain why completely free markets are absent globally and to analyze the specific factors and requirements that necessitate government intervention.
Which scientific approach is utilized?
The author uses a qualitative analytical approach, defining key theoretical concepts and then contrasting them with empirical observations and examples of state intervention in various countries.
What topics are covered in the main body?
The main body addresses the definition of a free market, the role of the state in providing social order, the inherent conflict between business profits and social protection, and how national differences (political/social) impact market freedom.
Which keywords best characterize the work?
Key terms include "free market," "government interference," "social protection," "globalization," and "economic transition."
How does the author view the role of the state in a free market?
The author argues that while markets aim to be free to maximize profits, the state is an essential "referee" that must protect society and the labor market through laws and financial redistribution.
How do social and religious ideas affect market freedom?
The author provides examples showing that religious and cultural norms—such as those regarding alcohol consumption, advertising content, or gender roles—often lead to state-imposed restrictions that limit market freedom in specific regions.
What is the "interest split" mentioned regarding the business community?
The split refers to the paradoxical position of firms: they demand freedom from government interference to maximize profits, yet simultaneously rely on the state for legal protection, social stability, and favorable conditions to compete.
- Quote paper
- Master of Arts (M.A.) Volha Daleka (Author), 2008, How free can markets be?, Munich, GRIN Verlag, https://www.grin.com/document/138712
