Market economy is an economy in which goods and services are freely exchanged without obstruction or regulation and where decisions about production and consumption are made by many separate individuals each seeking satisfaction of specific needs and desires. Market economy is sometimes used interchangeably with capitalist economy, but this is an error since a cooperatively based economy could also be operated on market principles. In market economy decisions regarding investment, production and distribution are based on supply and demand where the prices of goods and services are determined in a free price system. Businesses don't freely responding to the laws of supply and demand in Command Economy. Market economies may include hypothetical laissez-faire, free market, regulated markets and interventionist variants.
Existing market economies are mixed economies as they include economic planning or state-directed activity. Free market economy is almost synonymous with Laissez-faire economy, that is, free market without economic intervention and regulation by government. Free-market economy is often used synonymously with market economy, but this does not preclude an economy from having socialist attributes. Free Market Economics is the opposite of a controlled market economy. In reality however, market economies are regulated by societies and governments in many ways, not allowing full self-regulation by market forces.
During the first revolution in manufacturing, the Invisible Hand of The Market was replaced by the "visible" hand of corporate managers - Alfred Chandler.
The Theory of the Market
Economy and the Social Foundations of Innovative Enterprise
William Lazonick, University of Massachusefts Lowell and INSEAD (The European Institute of Business Administration) Economic and Industrial Democracy, Vol. 24, No.1, (2003).
Argues that the theory of the market economy as propounded by western economists is more a hindrance than a help. The western economists who propound the theory of the market economy lack a theory of economic development that can explain the successful growth of the wealthy economies. The 'market economy' is a real phenomenon with economic and political advantages. To benefit from 'market economy', a society must put in place the organizations and institutions that generate the innovative capabilities that make possible the emergence of well functioning markets in capital, labour and products.
Market Economy and Consumer Rights: The Impact on Women's Everyday Lives and Employment - Malgorzata Fuszara, Univ of Warsaw.
Economic and Industrial Democracy, Vol. 15, No. 1, 75-87 (1994)
A free market as one of the elements of freedom, has changed everyday life in Poland. The introduction of a market economy has changed women's life for the better for example as consumers. The changes have also led to a deterioration of women's situation and status in society, such as disproportional unemployment of women and loss of certain social services. The changes have done away with the 'communist myth' of gender equality regarding participation in politics, executive posts held by women or equal pay.
Ideological Basis of the Market Economy: Attitudes Toward Distribution Principles and the Role of Government in Western and Eastern Germany - EDELTRAUD ROLLER - Edeltraud Roller, Wissenschaftszentrum Berlin fr Sozialforschung. European Sociological Review, 1994.
Market-economy structures in the former GDR raises the question to what degree a market economy culture exists among East Germans, that is existence of orientations and behavioural dispositions congruent with market-economy structures. Empirical analyses show that immediately after unification the East Germans already supported the achievement principle of the market economy to the same degree as West Germans. Analyses indicate that the planned economy elements in this economic culture probably stem from system-internal experiences and the market economy elements stem from system-external experiences.
Gender Mainstreaming and Gender Equality in the New (Market) Economy: An Analysis of Contradictions. - Diane Perrons, Social Politics: International Studies in Gender, State Society 2005
Studies have highlighted institutional barriers or resistances to gender mainstreaming. Diane Perrons takes a different approach by developing a conceptualization of the new economy that highlights the market tendency toward widening gender and class inequalities. Effective gender mainstreaming would require a broader and more holistic conceptualization of the economy in order to secure greater gender equality.
Eucken's 'Social Market Economy' and Its Test in Post-War West Germany
The Economist as Social Philosopher Developed Ideas That Parallelled Progressive Thought in America. - By Siegfried G. Karsten, American Journal of Economics and Sociology, Volume 44 Issue 2
Walter Eucken's paradigm of a "Social Market Economy and Ordnung provides a framework for a functional free-market mechanism, which accommodates development and change, assuring human dignity and freedom, the cornerstones of the Kantian moral universe. Eucken places special emphasis on the integration of economics with order and Justice. This "social market economy" would provide goods and services efficiently and also eliminate poverty and the maldistribution of income and resources.
Patterns of Transition from Plan to Market. Martha de Melo, Cevdet Denizer, and Alan Gelb
The transition from a planned economy to a market economy involves a complex process of institutional, structural, and behavioral change. This article develops an index of economic liberalization and analyzes its interaction with growth and inflation from data of twenty-six transition countries for 1989-94.
Price-War Dynamics in a Free-Market Economy of Software Agents
Jeffrey O. Kephart, James E. Hanson, Jakka Sairamesh (IBM Thomas J. Watson Research Center).
Envisages the evolution of the Internet into a free-market information economy in which billions of software agents exchange a rich variety of information goods and services. The ability of the free-market economy to adjudicate and satisfy the conflicting needs of billions of human agents suggests it as a decentralized organizational principle for billions of software agents. Is a free-market information economy capable of facilitating the interactions of billions of software agents.
Incomes in Planned and a Market Economy: The Case of the German Democratic Republic and the Former Federal Republic of Germany. MARC SZYDLIK, Harvad, William James Hall, Cambridge
European Sociological Review 10:199-217 1994
Examines the extents and determinants of earned income inequalities in the German Democratic Republic and the former Federal Republic of Germany. Income differences can be distinguished on the basis of individual and structural inequalities as well as according to organizational and economic structures.
The market economy unchecked: Another version of fundamentalism? A polemical tribute to Stafford Beer - Leonard A. - Kybernetes: The International Journal of Systems Cybernetics, Volume 33, Numbers 3-4, 2004
Market economy imposes constraints and makes demands that mirror the rigidity of fundamentalist religions and that this makes answering one fundamentalism with another more likely.
Summary Report of the OECD Emerging Market Economy Forum on Electronic Commerce
The OECD Emerging Market Economy Forum on Electronic Commerce on the theme of electronic commerce and the global digital economy. Among the emerging themes at that meeting was recognition of differences in access between and within economies (known as the 'digital divide') and the need for the OECD to build upon its outreach to non-member countries and to all stakeholder communities. - oecd.org
The Economics and Politics of Transition to an Open Market Economy: Colombia - Summary.
Colombia was never a centralised communist state. It does share some of the characteristics of the centralised socialist economies since the reins of power remained in a small clique which denied access to other parts of the society. Reforms did take place, but under a climate of resistance by vested interests and militancy on the part of those who stand most to benefit from reform. Explains how these forces related to each other and how the conflicts were resolved or not. - oecd.org
Market economy, health economy? - De Wever A., Faculte de Medecine, Ecole de Sante Publique, Ecole de Commerce Solvay, Institut de Pharmacie, Laboratoire d'Economie de la Sante, U.L.B.
The economical science will gradually introduce the health economy to seek for a better distribution between public and private means to do more and better for the public health. The market economy is different from the state economy, principally conducted by the supply and demand law. The healthcare market put also a health supply and demand forward but not with the same values. The the consumer's behaviour are different in this particular market which quickly evolves and progressively goes closer to the market economy.
The transition from Soviet system to market economy as a cause of instability in the Estonian coastal fisheries sector - Markus Vetemaa, Redik Eschbaum, Toomas Saat - University of Tartu
This study analyzes how overall changes in political and economic life during the last decade have affected the Estonian coastal fishery of the Baltic Sea.