Free market...who coined this term?
By mx_aman
@mx_aman (2101)
India
March 3, 2007 2:05pm CST
can you explain the significance of free market.
is it diffrent from free trade?
1 response
@chingyieng (248)
•
3 Mar 07
Let me see whether I remember it correctly... I think it is related to Andrew-Debreu world of perfect markets or was it something called 'laissez fairre'.... Anyway, if I am not wrong, it just means that there is an invisible hand that drives the market to equilibrum where demand = supply. Free entry and exit to the market, free flow of information, perfect competition, everybody is a price taker and no one individual can influence the market as there are many players... i might have forgotten some points but it is one of the first few things we learn in economics.
It is quite different from free trade but there are some relationship to free entry and exit. I think if it is referring to international trade or finance then there might be a broader definition. Most countries would impose some sort of taxes on imports and exports... those are against free trade. Local regulation, levies and other rules related to domestic protection are also impediments than hampers free trade.
I am not an economist but I've learnt this in school and uni... but I may be wrong. So if anybody can share their thoughts and what they know... please do.



