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 ?
After 30 years of rapid growth, China is at a turning point in its development, which will require structural reforms for a market-based economy, which is reflected in the new policies.
We have never had faith in the market and we abandoned a market-based economy in 2006," Arce said, adding that the faith many IMF economists have shown in the "perfect market" was misguided, given the economic crises caused by their policies.
Kazakhstan has transformed itself rapidly from a Communist system to a market-based economy.
The market-based economy in the United States has been built by people who set out to put their ideas into practice and develop products well before a market existed for those products.
The 468-page report had six broad recommendations for Beijing: strengthen a market-based economy, foster innovation, go "green," provide social security for all, improve the fiscal system and seek mutually beneficial relations with the world.
In a market-based economy, compensation packages can and should vary widely, but because Congress's pay and perks are underwritten with tax dollars, lawmakers have a special obligation of accountability to the citizens who are required to foot the bill.
But some business people have strayed from the founding ideas of how self-interest works for the good in a market-based economy, Boatright said.
The International Monetary Fund has urged Syria to quicken its transition to a market-based economy while reducing its dependence on the oil industry.
LABOUR'S manifesto shows a big shift away from party''s desire for a market-based economy, say critics.
We'll show them what a real market is all about, not those speculative, money-grubbing markets, but a market for the people," said Chavez in his drive to change Venezuela from a market-based economy to a socialist one.
As a result, to be eligible for the bills benefits a country must demonstrate that it is making continual progress toward establishing the rule of law, political pluralism, the right to due process and a market-based economy that protects private property rights.
Furthermore, the study offers insights for countries that have not yet completed their transition to a market-based economy.