1. My View of the Free Market System
Victoria Rock
Unit 1 DB
The free market system was set up to encourage competitions and level the playing field for
both new and existing commodities, allowing the consumer the freedom to buy any product
they want, in the amount they wish to. The basis of the competition is the freedom of choice
that exists in pursuit of monetary returns. Producers watch the market system closely and
make decisions based on the supply and demand at which point a unique price is determined.
For example, if the price of a commodity is high, then market forces interact to ensure
equilibrium. Based on this, there is competition between buyers and sellers in the sense that as
buyers but more items, producers react by producing more of the demand item.
It is fare to argue that although the free market system is not perfect, sellers and buyers
defuse economic power within the business and households that make up the economy.
Proponents feel that the system brings about optimal distribution of the country’s resources.
With the vast amount of buyers and sellers that act independently, no single one can dictate
the price of the product but can determine the price by hiding the cost of production very
carefully. In a free market system, the distributions of the country’s resources are also based
on distorted market systems like monopolistic completion, and oligopoly which leads to
suboptimal distribution of a country’s resources. Also because of competition there is the
freedom of entry and exit which enables the economy to adjust to consumer preferences,
technological change, and resource availability. Companies that drastically increase the price of
goods would lose sales to competitors. The market system is a profit-and loses system due to
decisions that individuals make which determines the success of a company as a whole.
As I have learned this past year in school, no system is perfect. One could argue that the free
market system is not a perfect system. How could it be when in fact it consist of players that
make decisions based on personal or company interests without giving any regard to the
general economy. Those who increase the inequalities of income and wealth further leads to
the exploitation of the weak and underprivileged. The opponents of free market claim that
openness leads to defenselessness while foreign competitors and political adversaries can
exploit the situation. In my opinion the free market system is filled with greedy individuals with
only one goal in mind, to make as much profit as possible. The US and World economy nearly
collapsed in 2008 because companies made decisions they felt would enhance their profits
when in fact all they did was put peoples economic status in jeopardy. The opponents of free
market is correct when they claim it leads to greater inequalities, however with regards to

2. people making wrong choices that could harm, that is not acceptable. It is a democratic value
that the freedom of choice be granted and we have to respect that choice.
Reference
(2009). Chapter 3; Supply and Demand. In W. Krugman, Economics 2nd edition (pp. 61-92). New York:
Worth.
PIPA. (n.d.). 20-Nation Poll Finds Strong Global Consensus:Support for Free Market System But Also More
Regulation of Large Companies. Retrieved November 10, 2011, from Globe Scan:
http://www.globescan.com/news_archives/pipa_market.html
Reich, R. (2010, Feburary 11). One Free Market System for Wall Street, Another Free Market System for
Main Street. Retrieved November 10, 2011, from Huff Post; Business:
http://www.huffingtonpost.com/robert-reich/one-free-market-system-fo_b_459023.html?
Rothbard, M. N. (n.d.). Free Market. Retrieved November 11, 2011, from The Concise Encyclopedia of
Economics: http://www.econlib.org/library/Enc/FreeMarket.html