Free Market Economy

“For example, the federal government regulates the quality of food and water, the safety of workplaces and airspaces, and the integrity of the banking and finance system.” (Bianco, Canon 2011, p 582) Regulations find out if the product is a market failure. There are two types of regulations, which are economic and social. “Economic regulations sets prices or conditions on entry of firms into an industry, where as social regulation address issues of quality and safety.” (Bianco, Canon 2011, p 582) Economic regulations are concerned with the price regulation of monopolies.

The scope of this paper is to break down and define social regulation, industrial regulation, and natural monopolies by explaining how they have impacted society and why they exist. It is also the intent to summarize the Antitrust Laws, explain the major functions of the five primary federal regulatory commissions that govern social regulation, and identify three main regulatory commissions of industrial regulation.

A free market is a type of market that the government is not involved in. Since the government does not care about what happens, the free market is also called “hands-off” or “let it be economics”. The government is limited to protect the citizens from the danger and that is the major goal for the government. In the free market economy, there are three components of the free market economy: competition, active but limited government, and the self-interest. Competition is one of the main components of the free market economy. Competition means that the companies compete with one another to make more benefits to themselves. According to the concept of the free market economy, the competition means a good thing because it is a basic

The American economy is characterized by a free-market system also known as capitalism. The basic tenet of which is that economic transactions are determined in the private sector and that assets and resources are held privately. There are many different economic models that can be used in a country but no country has a purely simplistic style but rather has a mixed model. A mixed model encompasses components of each different model. The U.S. currently dominates the world economy and by doing so has popularized the free market model. However, the U.S. model has not been without fault or periodic boom and bust cycles. In the 1930s the U.S. saw its most severe economic recession also called The Great Depression. This depression saw unemployment at a staggering 25% at its height . As a result of this depression, the U.S. economy had a paradigm shift in which the dominant school of economic thought shifted from classical economics to Keynesian economics. The end result was that the U.S. economy was ultimately made stronger and the policies that we adopted became entrenched in our system of economic thought.

However, what many fail to realize is that some form of government regulation within a free-market economy, such as in America, is vital to its flourishment. Personally, I am in support of a free-market economy, but to an extent. The article, Faith in an Unregulated Free Market? Don’t Fall for it, stresses the importance of the presence of moderate government regulation. Without any form of regulation, “an unregulated competitive economy will inevitably spawn an immense amount of manipulation and deception” (Shiller NYT). The example is given that it is like when grocery stores put candy bars at the checkout counter; they know whining children will often force parents to make the additional purchase, providing the store with a way to draw in additional revenue. Amazingly, checkout-line items alone can draw in up to 17% additional profit for a business. With this in mind, it is the aims of the author to make his audience aware that without any regulation, “harmless” manipulation such as this may be exacerbated to a greater level. This could result in privately owned businesses charging their customers higher prices that people will have to pay because there are no governmental laws preventing them from doing so. I too believe that some form of regulation is necessary to prevent externalities like these from occurring in a free-economy. Without rules, the people within the economy

In 2008, the United States went through one of the most significant economical period in history. The housing market and banks started to fail and people were unable to pay off their loans on the houses. This lead to a giant need for government intervention in determining which investment banks and corporations were worthy of being considered “too big to fail”. If they were in this category, the government would supply them with the funds necessary to not go bankrupt. Most of the time, the corporations would put this money towards consolidating their balance sheets, rather than solving the problems. This paper looks in depth into the 2008 financial crisis: the course

Personal growth, expanded understanding of the world and social movement are the most consistent outputs of a college education. The power of an education and its ability to change both the way an individual lives and thinks cannot be understated. The educational system and its ability to affect the positive growth of our nation allows the government to fully harness the powers of its people. Humanity has long depended on the expansion of human knowledge and technology to further human progress. America as the most powerful and wealthy nation in the world must take measures to expand their university system to further meet the increasing demand for educated workers in a globalized economy. The current free market system has pushed the need for a solution for universities to furnish domestic companies with skilled workers. We can solve the student debt crisis by adapting to a more universal stance on education, in doing so we will greatly improve the quality of life for our population. In this essay I will discuss why education should be made available to all, the value of an education and some problems and solutions to solve the current struggles of our educational system to better meet the needs of our citizens.

During my stay in America, I was pleasantly surprised to witness the changes that had occurred in the last two centuries. Ironically, the mercantile power that was Great Britain is now economically on par with its former colony of America. As I presumed, free market economies are far stronger than their former mercantilist counterparts as they are the standard in modern democratic societies. It seems that global economies now realize that the market is not a zero-sum game, mutually beneficial deals can be reached that facilitate free trade which stimulates market activity.

Prior to the Great Depression, the United States government was very small and did not possess many agencies or programs. There was also a general belief in a free-market economic system throughout the United States, with the idea that the economy was capable of regulating itself. In 1929, however, the stock market crashed due to speculation. Since there was no regulatory agency to manage and protect investments, many people lost money, their jobs, and banks were forced to close down. In 1930, the southwestern region of the United States suffered a severe drought due to over-farming. This area of land became a gigantic area of unfarmable dust that would spread throughout the continent. The farming families in the area were then unable to provide for their families and struggled financially, which forced them to migrate to the west in search of employment.

Organizing an economy is a tremendously difficult task as there is no single correct way to create a successful monetary or macroeconomic policy. Economics is a complex system that impacts our everyday lives for better or worse. A struggling economy could be the difference of not being able to get that extra cup of coffee or worrying if you will find a summer job between semesters. The economy is so important to the public that it is a central issue nearly every election. Political parties will always have fiscal policies s among their platform. These policies vary between political parties and are somewhere on the political spectrum.

Explain why government regulation is needed, citing the major reasons for government involvement in a market economy.

A recent issue has arouse regarding the role of government in our economy. I believe that we, as a people, need strict regulations on our businesses a prevent things like pure monopolies. As a nation we need to give our people the best lives possible and with things like price-fixing that makes our job significantly more difficult. If we look at the company Luxicotta, we see that prices for glasses are so high that people have problems buying them because they are a pure monopoly. If we let one company control the market for a good, then we will fare far worse than if we had not let this occur.

Advertising is a staple in the American Free Market Economy: it is used by companies to persuade consumers to purchase certain products, as well as to educate consumers about the benefits of their product. Dozens of varying advertising techniques are used by marketing companies in an attempt to coerce potential buyers into purchasing products. These advertisements come in many forms, in such a quantity that they are now a typical part of American day-to-day life. Advertising is so vital to the prosperity of a company and the promotion of the company’s products that marketers across the United States are spending billions of dollars for the ideal product positioning and consumer exposure to their products. A majority of the consumer demand in

The free market is founded on the principle that man is indeed capable of governing himself. During the course of the American Revolution, many individuals from several countries sacrificed their time, their fortunes, and even their lives for the revolutionary idea that man was destined to be free. In the great history of the world, we have witnessed many great civilizations come and go, and time can all but wash away entirely the ardor once held by a people for certain ideals. Two hundred and forty years have passed since our forefathers made the sacrifice for our independence, and in that time an argument has crept into our society claiming that the free market system which they fought for is corrupt. Many are wondering if unequally divided

some advantages are economic freedom, economic incentive and private ownership. some disadvantages are that they create a large division between wealthy and poor and damage the environment quickly.