Market economy
From The Art and Popular Culture Encyclopedia
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| + | "[[Immanuel Wallerstein ]] characterised the [[World-systems theory |world system]] as a set of mechanisms, which redistributes [[surplus value]] from the ''[[Core–periphery structure|periphery]]'' to the ''[[core countries|core]]''. In his terminology, the ''core'' is the developed, [[Industrialisation |industrialized]] part of the world, and the ''periphery'' is the "[[Underdevelopment|underdeveloped]]", typically [[raw material]]s-exporting, poor part of the world; the ''[[market]]'' being the means by which the ''core'' [[exploitation|exploit]]s the ''periphery''." --Sholem Stein | ||
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| + | "[[Physical attractiveness]], both as subjectively experienced and objectively measured, operates in accordance with [[market|exchange-market]] rules. Individuals with equal [[market|market value]] for physical attractiveness are more likely to associate in an intimate relationship such as engagement than individuals with disparate values".''[[Who Will Marry Whom?: Theory and Research in Marital Choice]]'' (1976) is a book by [[Bernard I. Murstein]]. | ||
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| + | [[Image:Les Halles by Marville.jpg|200px|thumb|right|[[Les Halles]], [[Paris]], photograph by [[Charles Marville]]]] | ||
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| - | A '''market economy''' is an [[economic system]] in which the decisions regarding [[investment]], [[Production (economics)|production]] and [[Distribution (economics)|distribution]] are guided by the [[price signal]]s created by the forces of [[supply and demand]]. The major characteristic of a market economy is the existence of [[factor market]]s that play a dominant role in the allocation of [[Capital good|capital]] and the [[factors of production]].<ref>{{cite book|last=Gregory and Stuart|first=Paul and Robert|title=Comparing Economic Systems in the Twenty-First Century|edition=7th|publisher=George Hoffman|year=2004|isbn=0-618-26181-8|page=538|quote=Market Economy: Economy in which fundamentals of supply and demand provide signals regarding resource utilization.}}</ref><ref>{{cite book|title=The Future of the Market: An Essay on the Regulation of Money and Nature After the Collapse of "Actually Existing Socialism|url=https://archive.org/details/futureofmarketes0000altv|url-access=registration|author=Altvater, E.|year=1993|publisher=Verso|page=[https://archive.org/details/futureofmarketes0000altv/page/57 57]}}</ref> | + | A '''market economy''' is an [[economic system]] in which the decisions regarding [[investment]], [[Production (economics)|production]] and [[Distribution (economics)|distribution]] are guided by the [[price signal]]s created by the forces of [[supply and demand]]. The major characteristic of a market economy is the existence of [[factor market]]s that play a dominant role in the allocation of [[Capital good|capital]] and the [[factors of production]]. |
| - | Market economies range from minimally regulated [[free-market]] and ''[[laissez-faire]]'' systems where state activity is restricted to providing [[Public good (economics)|public good]]s and [[Public service|services]] and safeguarding private ownership,<ref>{{cite book|title=Comparative Economic Transformations: Mainland China, Hungary, the Soviet Union, and Taiwan|author=Yu-Shan Wu|year=1995|publisher=Stanford University Press|pages=8|quote=In laissez-faire capitalism, the state restricts itself to providing public goods and services that the economy cannot generate by itself and to safeguarding private ownership and the smooth operation of the self-regulating market.}}</ref> to [[Economic interventionism|interventionist]] forms where the government plays an active role in correcting [[market failure]]s and promoting [[social welfare]]. State-directed or [[Dirigisme|dirigist]] economies are those where the state plays a directive role in guiding the overall development of the market through [[Industrial policy|industrial policies]] or [[indicative planning]]—which guides yet does not substitute the market for [[economic planning]]—a form sometimes referred to as a [[mixed economy]].<ref>{{cite book|title=The Future of the Market: An Essay on the Regulation of Money and Nature After the Collapse of "Actually Existing Socialism|url=https://archive.org/details/futureofmarketes0000altv|url-access=registration|author=Altvater, E.|year=1993|publisher=Verso|pages=[https://archive.org/details/futureofmarketes0000altv/page/237 237]–238}}</ref><ref>Tucker, Irvin B. p 491. Macroeconomics for Today. West Publishing. p. 491</ref> | + | Market economies range from minimally regulated [[free-market]] and ''[[laissez-faire]]'' systems where state activity is restricted to providing [[Public good (economics)|public good]]s and [[Public service|services]] and safeguarding private ownership, to [[Economic interventionism|interventionist]] forms where the government plays an active role in correcting [[market failure]]s and promoting [[social welfare]]. State-directed or [[Dirigisme|dirigist]] economies are those where the state plays a directive role in guiding the overall development of the market through [[Industrial policy|industrial policies]] or [[indicative planning]]—which guides yet does not substitute the market for [[economic planning]]—a form sometimes referred to as a [[mixed economy]]. |
| - | Market economies are contrasted with [[planned economies]] where investment and production decisions are embodied in an integrated economy-wide economic plan. In a [[centrally planned economy]], economic planning is the principal allocation mechanism between firms rather than markets, with the economy's [[means of production]] being owned and operated by a single organizational body.<ref>{{cite web|last=Chappelow|first=Jim|others=Scott, Gordon, rev.|date=29 January 2020|url=https://www.investopedia.com/terms/c/centrally-planned-economy.asp|title=Centrally Planned Economy|website=Investopedia|access-date=9 April 2020}}</ref>{{better source needed|date=April 2020}} | + | Market economies are contrasted with [[planned economies]] where investment and production decisions are embodied in an integrated economy-wide economic plan. In a [[centrally planned economy]], economic planning is the principal allocation mechanism between firms rather than markets, with the economy's [[means of production]] being owned and operated by a single organizational body. |
| == See also == | == See also == | ||
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| * [[Keynesian economics]] | * [[Keynesian economics]] | ||
| * ''[[Laissez-faire]]'' | * ''[[Laissez-faire]]'' | ||
| + | * [[Market]] | ||
| * [[Market socialism]] | * [[Market socialism]] | ||
| * [[Market structure]] | * [[Market structure]] | ||
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"Immanuel Wallerstein characterised the world system as a set of mechanisms, which redistributes surplus value from the periphery to the core. In his terminology, the core is the developed, industrialized part of the world, and the periphery is the "underdeveloped", typically raw materials-exporting, poor part of the world; the market being the means by which the core exploits the periphery." --Sholem Stein "Physical attractiveness, both as subjectively experienced and objectively measured, operates in accordance with exchange-market rules. Individuals with equal market value for physical attractiveness are more likely to associate in an intimate relationship such as engagement than individuals with disparate values".Who Will Marry Whom?: Theory and Research in Marital Choice (1976) is a book by Bernard I. Murstein. |
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A market economy is an economic system in which the decisions regarding investment, production and distribution are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production.
Market economies range from minimally regulated free-market and laissez-faire systems where state activity is restricted to providing public goods and services and safeguarding private ownership, to interventionist forms where the government plays an active role in correcting market failures and promoting social welfare. State-directed or dirigist economies are those where the state plays a directive role in guiding the overall development of the market through industrial policies or indicative planning—which guides yet does not substitute the market for economic planning—a form sometimes referred to as a mixed economy.
Market economies are contrasted with planned economies where investment and production decisions are embodied in an integrated economy-wide economic plan. In a centrally planned economy, economic planning is the principal allocation mechanism between firms rather than markets, with the economy's means of production being owned and operated by a single organizational body.
See also
- Capitalism
- Classical economics
- Co-determination
- Economic freedom
- Economic liberalism
- Free market
- Free-market anarchism
- Gift economy
- Grey market
- Keynesian economics
- Laissez-faire
- Market
- Market socialism
- Market structure
- Mixed economy
- Neoclassical economics
- Planned economy
- Price system
- Regulated market
- Social market economy
- Socialist market economy
- Social ownership
