Why do you think most of the world's most successful economies are market economies?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The world’s most successful economies are market systems because markets are much more efficient than any other kind of economic system.

In a market system, different companies are free to try different things.  They compete with one another and each company tries its best to do things in the best possible way.  When this happens, companies find ways to be efficient.  As companies become more efficient, the economy becomes stronger and wealthier.  This process does not happen to nearly the same degree in a system where the government tells companies what they will do.

Perhaps more importantly, the market system brings the profit motive into play.  Firms and individuals can make a lot of money if they come up with a new product that people will want to buy or if they come up with a new way of making an old product.  This gives people a strong incentive to work hard and to try to innovate.  In a command economy, they would have little incentive to do so.

Therefore, market economies encourage firms and individuals to seek the best ways to do things.  This makes for a more efficient and innovative economy.  Such economies are the most successful ones.

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