The question of whether and to what extent can governmental agencies control the way that products and services are developed, produced, and sold presents an important discussion topic today. The anticipated and actual benefits of free-market economies can be justly regarded as the topic that is capable of polarizing society and even involves ideological issues and disagreement apart from problems that only have to deal with economic development.
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This paper argues that the benefits of having a free-market system include poverty alleviation, promotion of safe and sustainable production to win consumers’ approval, and opportunities to reduce price instability.
Greater opportunities to promote economic growth and reduce poverty present one of the critical benefits associated with the introduction of free-market systems. The proponents of free market philosophies tend to associate the global spread of the free-enterprise system with decreases in the percentage of the global population living in extreme poverty. For instance, according to Littlewood, there is a cause-and-effect relationship between the popularization of free enterprises and a continuing decline in the percentage of global population (from 40% to 10%) living in extreme poverty.
The economic problems that the United States continues to face today do not disprove multiple benefits of free-market systems since the country does not have a free-market economic system yet (Gordon). Despite multiple attempts to reduce government control and enable citizens to decide what to consume and produce, there still are predatory partnership relations between governmental agencies and large-scale businesses (Gordon). Therefore, the liberalization of markets is associated with people’s improved access to resources, but the present situation does not allow all benefits of free-market economies to show themselves.
Reliance on free markets, as some experts believe, can have a positive impact on the planet’s environment apart from causing increases in the average levels of prosperity. An important feature of free-market economies that deserves attention is that they allow those owning businesses to implement innovative ideas to meet customers’ expectations and differentiate themselves from competitors (Dorfman).
As the ideas of the environmentally friendly economy continue to win support among common consumers, agricultural businesses that profit from their property become more interested in achieving ecologically sustainable production (Eckert). Despite this opportunity to use free markets to initiate improvement, many individuals still overestimate the link between minimal involvement and climate change (Smith and Mayer 19).
The degree to which free markets are beneficial is interconnected with customers’ and voters’ preferences. Many people continue to support government intervention in the market, which prevents the free-market paradigm from demonstrating its actual benefits (Newland 569). Therefore, it is not fair to say that minimal government involvement in markets promotes the freedom to harm the environment and profit from overusing natural resources.
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Finally, apart from the promotion of economic growth and motivation to engage in sustainable production to make customers satisfied, free-market systems can be beneficial since they actually contribute to price stability. For instance, there is evidence that high and poorly-controlled inflation primarily affects the industries that are controlled by the government most of all (Dorfman).
In addition to their effects on business owners that become free to determine the way to attract clients, free-market economies improve the situation for consumers by increasing competition in the market. To differentiate themselves from competitors and survive, businesses are naturally motivated to keep prices low or at least moderate without cutting corners on the safety and quality of their products and services (Dorfman). With that in mind, free markets give more power to consumers and enable them to get affordable services and goods.
Dorfman, Jeffrey. “Ten Free Market Economic Reasons to Be Thankful.” Forbes. 2016. Web.
Eckert, Thomas J. “Actually, the Free Market Benefits the Environment.” Being Libertarian. 2017. Web.
Gordon, David. “The American Economy is Not a Free-Market Economy.” Mises Institute. 2013. Web.
Littlewood, Mark. “People Need to Be Reminded It Was Free Market Capitalism that Made Us Rich.” The Times. 2019. Web.
Newland, Carlos. “Is Support for Capitalism Declining around the World? A Free-Market Mentality Index, 1990–2012.” The Independent Review, vol. 22, no. 4, 2018, pp. 569-583.
Smith, E. Keith, and Adam Mayer. “Anomalous Anglophones? Contours of Free Market Ideology, Political Polarization, and Climate Change Attitudes in English-Speaking Countries, Western European and Post-Communist States.” Climatic Change, vol. 152, no.1, 2019, pp. 17-34.