market economy

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Market Economy

A social and economic system in which prices are fixed by the law of supply and demand rather than by a government or other body. In its pure form, a market economy is an economy absent of government subsidies, incentives, or regulations. A market economy contrasts with both a planned economy and a mixed economy. No economy is a complete market economy: most countries claiming to have market economies in fact have a market economy combined with greater or lesser government regulation, sometimes called a social market. Proponents of a market economy argue that it is more efficient than any alternatives, promotes fair competition between its participants, and rewards skill and hard work. Critics allege that a market economy perpetuates class differences and rewards ruthlessness over actual labor. Milton Friedman, Friedrich Hayek, and Ludwig von Mises were three major 20th-century proponents of the market economy. See also: Capitalism, socialism, John Maynard Keynes.

market economy

see PRIVATE-ENTERPRISE ECONOMY.
References in periodicals archive ?
Certainly, the free-market economy is not the only economic system in the world.
Even a free-market economy isn't a perfectly efficient world where all opportunities are grasped and acted upon instantaneously; sometimes businesses make mistakes because they are stuck in a mindset that, say, puts a higher threshold payback period on energy savings than on other investments.
These countries hesitate to undergo the necessary transition from a totalitarian Communist regime to a free-market economy.
Now these entrepreneurs face a new challenge: the measures designed--at the urging of American economists--to thrust Poland headlong into a free-market economy.
It is time for those of us who reap the benefits of a free-market economy in a free society to unite against the villainy of some who don't.
Like so many institutions in post-Soviet Russia, it has lost its state support and is struggling to pay its bills and find a niche in the free-market economy.
This is why I have characterized the official Peruvian economy not as a free-market economy but as a mercantilist economy.
Examining the importance of a repressive culture that discourages individual freedom and empowerment in providing a complacent and obedient public to service a free-market economy, he draws a somber picture of a nation manipulated by carefully orchestrated public representations, the suppression of conflicting images, and the squelching of the opposition through such actions as resuscitating the draconian McCarran-Walter immigration act and instituting government "spying" programs.
Convinced of the need to convert to a free-market economy, the CIS has opened its arms to foreign investment and embarked on an ambitious, radical privatization program.
The establishment of standards of freedom and ethical conduct in legal affairs, the nascent free-market economy, the post-Communist civil society, and unfettered inquiry and belief were addressed.
It was formed in 1995 as a means of developing a worldwide free-market economy, a process referred to as globalization.
At her news conference in the capital last week, Chamorro defended her performance, saying she has faced ``enormous obstacles'' in her effort to turn a dictatorship into a democracy while simultaneously transforming a socialist economy into a free-market economy.