Characteristics of a Free Market
A Free Market is a free, cooperative and peaceful process. What are its distinct characteristics? Here are the nine characteristics Dr. Lameiro’s uses to define a free market:
- Individuals are free to choose their own work
- Individuals are free to be investors
- Individuals are free to be entrepreneurs
- Individuals are free to create capital formation (the process of bringing together capital from savers and investors to invest in new businesses, products and services)
- Individuals are free to earn profits
- Individuals are free to compete (to create faster, better and cheaper products and services)
- Individuals are free to buy, earn, use and sell private property (without excessive government regulations)
- Individuals are free to set prices (including wages and salaries – the prices paid for labor services)
These characteristics stand in sharp contrast to the economic policies of socialism that lead to moral and economic bankruptcy.
A free market is a cooperative process that meets people’s needs without resorting to government-dictated centralized planning, control, coercion, compulsion and violence. A free market also allows individuals to choose their own unique role. Individuals are free to choose their own line of work, or they can save and become an investor, or if they believe they want to start their own business, they can become an entrepreneur.
A free market requires capital formation, the ability to bring together new capital for investment. It also uses prices and profits to direct economic resources into those products and services that individuals demand. Without these powerful communication signals, a free market would not be as efficient and effective at meeting individual’s needs. Individuals and businesses, of course, must be free to set prices for their products and services. Otherwise, cooperative and peaceful free exchange is not possible.
Competition is an important element in a free market as well. Competition serves to bring out the very best in people. It is also instrumental in creating faster, better, and cheaper (less expensive) products and services, all to meet the needs of individuals.
Finally, private property is the very important cornerstone of a free market. Without private property, nothing can be bought or sold. There can be no free exchanges. Without private property, the idea of a free market makes no sense at all.
Free Market – A Free, Cooperative and Peaceful Process
A Free Market is a free, cooperative and peaceful process.
It does not require government-dictated centralized planning, control, coercion, and compulsion. It does not require high taxation or excessive regulation to function effectively. It functions best with minimum government interference.
Free Market – For More Information
For more information, you can read Dr. Lameiro’s powerful and important book: America’s Economic War.
You can also read these items on this website: