Free market and capitalism are sometimes referred to interchangeable; however, they are different by the true meaning. Free market is based more on the exchange of wealth by utilizing several different methods versus capitalism is more structured to produce and create wealth were on can be more successful than another. In this paper, the writer will discuss free market by providing an historical overview and identifying trends in this area. In addition, discuss possible challenges presented by several of the trends and critique potential solutions to the identified challenges.
History and Trends of a Free Market Economy
A free market is one that is not regulated by government, but rather driven by demand and supply. The free market theory contends that an ideal free market is where entities are exchanged voluntarily after a seller and buyer mutually agree on a price, without any intervention from external influences. There are several countries currently that operate with a many concepts of a free market economy such as United States, Singapore, New Zealand, and Canada however these countries are not completely free because a true free market economy would have absolutely no government intervention. These countries are driven majority buy supply and demand of a good or service also identified with the concept of lazziez faire, but there are still regulations and laws that monitor price setting and to protect the people which helps largely with the avoiding exploitation of the underprivileged individuals to ensure prices remain fair.