4 Answers | Add Yours
Various studies over the years through to 2016 have yielded somewhat different results for the ranking of countries with market economies (or the highest degrees of market economies). In 2016, the updated annual Index of Economic Freedom, compiled through partnership between the Heritage Foundation and the Wall Street Journal, identified the countries with market economies (or the closest thing thereunto), in descending order of highest percentage of free market economy (free of government regulation), as Hong Kong, with a score of 88.6 out of a possible total of 100 (down from 2015 -1.0); Singapore, with a score of 87.8 (down -1.6); New Zealand, with a score of 81.6 (down -0.5); Switzerland, with a score of 81.0 (up +0.5); and Australia, with a score of 80.3 (down -1.1). These scores change over the years as conditions change in the countries relative to Index measures. To illustrate, in 2013, Australia was ranked third, with a score of 82.6.
The United States doesn't rank near these top market economy countries because the U.S. economy is protected from market corruption and exploitation through laws that restrict corporate and industry actions and through other laws that protect workers' rights and boost workers' power in the marketplace, a power that has been eroded in recent years through manipulations in the banking and investment industries. The United States, in 2016, consequently ranks among the "mostly free" with a total market economy score of 75.4.
The economic history of the United States shows that a market economy, free of regulations and protections, has been unsustainable in the U.S. The U.S. has a mixed economy that imposes controlling regulation upon business, corporations, and industries (including environmental regulations) when need arises to subdue corruption, exploitation, and manipulation. U.S. consumers have gained economic spending power because of the history of U.S. regulation.
The economic definition of a market economy, or free market economy, is that it is an economy in which the government does not regulate actions in economic markets but allows markets to be driven by unregulated supply and demand in which goods are supplied at the highest price the market will accept and labor demands the highest wage the market will pay (the assumed proviso is that labor has the power to demand).
Most of the countries today have a combination of market economy and command economy. There are no countries that pure market economy or pure command economy. Even countries like USA, leading in their support for market economy have many laws such as anti-monopoly laws that restrict free competition, which is essential for a pure market economy. Recent bailout package by US Government have further highlighted the presence and need for command economy like action of government in all economies.
However, we can say in that communistic countries like China follow predominantly command economy, whereas democratic countries - which includes most of the countries in the world today - follow predominantly the market economy pattern.
A market economy is part of a capitalist system where the main aim is to make profit. Such economies, present in countries such as the US, the UK, are dependent on supply and demand.
However, as mentioned, there is no country that purely adopts a market economy.
A market economy is a capitalist economic system. A capitalist economy is where business are owned by private owners with the goal of making profit. Countries that have a market economy are Mexico, United States, United Kingdom, Germany, and Canada . These countries have a market economy because the prices of goods and services are set by supply and demand .
We’ve answered 317,566 questions. We can answer yours, too.Ask a question