What countries have a market economy?

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A free market, or market, economy is one which allows the market to do as it pleases and essentially lets the science of economics dictate how business perform. A market economy was much more common a century or two ago, before government regulations began influencing the way market economies were run. In America, for instance, government regulation prevents monopolies, exploitation, and more in order to create a more equitable economy. However, there are still several free markets in existence.

For example, nations such as Hong Kong, Singapore, New Zealand, Australia, and Switzerland are all relatively free markets. Other nations either have more government regulation or are based on entirely different principles (socialist, dictatorship, etc). The above five nations, however, are the most intrinsically free market economies in the world.

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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). 

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