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 ?
official said those countries eventually earned market economy status as evidence of state subsidies and state distortions waned.
But she is not well served by the market economy available to her.
In May, its members voted to withhold market economy status from China, amid protests by Europe's steel industry against competition from the east.
In the near past, China did show some promise of becoming more of a market economy, as Ronald Coase and Ning Wang argued in their 2013 book How China Became Capitalist (Palgrave Macmillan; reviewed in the Winter 2011-2012 issue).
"Tata Steel is deeply concerned about Europe apparently sleepwalking into potentially even greater steel crisis by the granting of market economy status to China," said Tim Morris, head of public affairs at Tata Steel Europe.
The MP is calling on the government to oppose China being granted market economy status this year to protect UK steel.
In the VoC-approach, two "ideal" types of capitalism are distinguished: a liberal market economy and a coordinated market economy.
"I think there is no dilemma that our economy, by many features, has been a functional market economy since 2005 when Macedonia was awarded the candidate member state status," says former Finance Minister Nikola Popovski.
Two management scholars at the University of Pavia argue that Europe's impending jump from monetary union to economic union should be the opportunity to change from the vision of unrestrained global greed to a convergence of ideals that include a new humanism, a social market economy, orderly relations between market and state, human rights, federalism, and subsidiarity.
"It would be easier for Chinese firms, which are unfairly labelled as subsidised agents of the Chinese government, to obtain market economy status," Hosuk Lee-Makiyama, co-director of the European Centre for International Political Economy (ECIPE), told Europolitics.
"Free market economy doesn't rule out government intervention.
According to the authors, history shows that "a productive market economy requires the existence of a particular set of beliefs and institutions in order to establish the incentives that will encourage people to participate in a market economy and be sufficiently rewarded for their efforts" (p.