Free Market Essay

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Americans feel a great deal of faith in the “free market.” Explain some of the weaknesses in the “free market.” That is, what might be some of the limitations of the “free market?” Free market consists of a market without government control or regulation, a market where supply and demand determine the cost of goods and services. If such a market truly existed there would be multiple areas of weaknesses for both the consumers and the suppliers. Weaknesses could include monopolies, price fixing, defaults, etc. Additionally, business would have no way of being held accountable if there were no regulations in place for them to abide by. It can be said that America has a ‘managed economy’ as there are commissions, subsides and regulations in place to guide business practices in our ‘free market’. Free markets would rely heavily on consumer confidence and business ethics, things that even in a ‘managed economy’ are hard to come by. I do not feel that there would be much faith in a free market as there are too many companies and individuals driven by greed and bottom-lines. A good example of this is the ‘wealth gap’ or the disparity of executive level salaries and benefits package compared to the front-line employee. Without strict government regulation an economy will eventually collapse. A recent example is the then relatively unregulated actions of the subprime mortgage and banking industries and the impact unethical actions had on the economy. Without the bailouts of the US government a complete collapse of our ‘free market’ would have likely

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