FYI: Free market capitalism does NOT mean there is no government regulation or influence on commerce. That is a false assertion. Every advanced nation in the world is a free market capitalist country, including European nations, including China. Though in every case there is some level or another of government involvement and interference in commerce and structuring markets. "Free market" essentially means that producers are free to enter a line of business and sell their products at whatever price they can charge; meanwhile consumers are free to buy whatever products they want at whatever price they are willing to accept. The interaction of the two is the "market", and a key to its function is freely-floating prices (the pricing mechanism), with prices going up or down reflecting supply, demand, and scarcity. The healthiest markets are those in which there are many producers competing for business, and also many consumers competing for the available products. The "capitalism" part refers to systems in which money is collected via savings, and channeled to productive economic activity via financial markets -- so that savers get a return on their money, and entrepreneurs and managers get access to capital to invest in their businesses. Capitalism is characterized by banks that take deposits and lend the capital; and by stock and bond markets that also direct savings into capital investment. The key to both free markets and capitalism is that they are based on two-sided transactions that are good for both parties, so both parties freely choose to interact and are both better off for it.
Posted on: Wed, 28 Aug 2013 04:52:36 +0000
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