Wednesday, April 13, 2011
Market Troubles
This article talks about how there has been a drastic decline in the popularity of the free market system. it mentions that since 2002 there has been a 21% decline in people that support the free market system. However one interesting thing about this article was the countries that it mentioned who still show strong favoritism toward free market economies. those countries include China, Germany, and Brazil who all have economies that are performing very well. it just shows that there data presented in this article might be slightly biased because of the recession in the U.S.
Subscribe to:
Post Comments (Atom)
7 comments:
This seems strange with all the Americans voicing distrust for the large government influence in the U.S. - ex. the Tea Party, cutting the governments spending on welfare projects, etc.
It might not be accurate since people may not understand the definition and mechanisms of a free market system. After all, it has been proved to be the only feasible way to allocate resources efficiently. Americans might have based their judgments on the downward economy due to current recession. Chinese might be in favor of the market system because of their positive economic growth.
Pure market system will always lead to fluctuations in the economy and increase in income inequality. With Washington Consensus, America moved toward freer economic system. Lord Skidelsky in his book "Keynes: The Return of the Master" compares Golden Age (1945-71) where Keynesian policies were implemented, to the period of Washington Consensus where free market polices were dominant. Skidelsky finds superior economic performance of Golden Age on a whole range of metrics (growth, inflation, etc...).
I think this article is definitely biased because of the current recession in the U.S. Evidence from China, Germany, and Brazil prove that the free market system is very useful and successful for their economies. A free market system has many advantages and I believe it should still be used. In a market economy, businesses and consumers decide of their own free will what they will purchase and produce. Technically this means that the producer gets to decide what to produce, how much to produce, what to charge to customers for those goods, what to pay employees, etc., and not the government. These decisions in a free market economy are influenced by the pressures of competition, supply, and demand. A free market allows competition and businesses are constantly competing for more customers. We have to remember that without a free market system, prices would be much much higher than they already are.
A free market system in theory leads to more efficient allocations of capital. It has worked better than the planned economy systems and most economies are either free or transitioning towards a free market. Current negative perceptions about free market systems are due to the current complicated situation the economy is going through.
nope
Countries that currently operate under a free market system, such as China and Brazil, are very successful and have been for a while. I understand the U.S. faced one of the worst recessions of all time, but can you honestly say that a free market system is a failure...no. Recessions are cyclical so this was to be expected as we were already years overdue for one. The U.S. will once again be successful and experience growth in the coming years.
Post a Comment