market system

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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.
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market system


price system

an ECONOMY in which basic decisions about the allocation of resources, which goods and services are produced and in what quantities, are determined by the interaction of buyers and sellers in factor and product MARKETS. See EQUILIBRIUM MARKET PRICE, MARKET CONDUCT, MARKET PERFORMANCE, MARKET STRUCTURE, MARKET STRUCTURE-CONDUCT-PERFORMANCE SCHEMA.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

market system

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
De Grauwe notes that discussions on the role of markets and government have been ongoing for centuries "between people who believed that the market system was the foundation of economic organization (and creates the economic value that makes it possible to maintain the public sector) or that the task was reserved for government (as it establishes and enforces property rights)." That traditional view is espoused by both market fundamentalists and government fundamentalists, and is often portrayed as a pyramid hierarchy, with either the market or government at the top.
First, there is no international political system to offset the power of the international market system. (There are international agencies such as the IMF and the WTO, but, unlike some critics, Gould is not paranoid about them, seeing them as institutionalising the international economy, rather than driving it.) Second, as the economy opens up, the dollar voting increases and becomes more unequal, as multinationals and the like get involved.
Regulation National Market System (NMS), a package of reforms proposed by the SEC in 2004, addresses several issues, but none has stirred more controversy than the proposed change in the trade-through rule.
The development of the modern market system in Holland and Great Britain in the seventeenth and eighteenth centuries led eventually to the realization that the solution to the economic problem was intrinsically connected with specialization and economies of scale, and that these could only be reached through the market system.
Throughout most of The Market System, Lindblom's dispassion is almost clinical.
Despite the uproar, many experts believe open market systems will improve over time.
Finally, an effective competitive market system requires a rule of law that severely delimits government's arbitrary intrusion into commercial disputes.
In a recent contribution to this journal, Nancy Ruth Fox (1996) compares the efficiency of a first come, first served (FCFS) allocation system for morning kindergarten with both a price system and a modified market system. Her investigation is important not merely as it applies to early childhood education, but more generally as an analysis applicable to other publicly provided private goods.
On the importance of information: Obviously, the information on The Nasdaq Stock Market system is critical to those who participate in the market.