Promoting a peaceful coexistence between market, state and liberal democracy is the great challenge of our time.
A limited market economy within the rule of law and liberal democracy is preferable to a centrally planned socialist economy in the service of an autocracy.
Market economy is the result of primitive evolution. No one in particular invented it, rather it was born out of the many economic interactions of humans. Just like how language, writing, law and other manifestations of human society arose and developed. There is no founder, but rather it is about social events that arise through an arbitrary order that is not planned by anyone.
The market economy was born within the first human societies and manifested during the first urban civilizations. All civilizations to date have been based on division of labor, private ownership of the means of production, and market economies.
In no case is economy said to be pure and properly applied. But there are countries that are very close and countries that are completely different from the model. For decades, some think tanks have been preparing annual reports on the state of economic freedom in the world, progress and setbacks, approximations, and the achievements of various countries based on greater proximity or distance. A market economy.
Economies such as Hong Kong, Singapore, Taiwan, Korea, Japan, New Zealand, Switzerland, the United States, Canada, Israel, the United Kingdom, Ireland, Australia and the Scandinavian countries rank best in such indices of economic freedom.
A market economy is a social system of cooperation and division of labor based on private ownership of the means of production, whereby goods and services are produced and exchanged voluntarily through the free play of supply and demand. Therefore, by definition, any market economy is a “social market economy”.
Market economy is the best system to boost economy, promote economic growth, create employment, eliminate inflation, create wealth and reduce poverty.
What should each market economy produce for its members?, how?, and how much? What to buy? and other information about the manufacturing and transfer process.
All market economies are formed within a set of laws or legal codes or a rule of law that defines the rules of the game in the market. Increasingly, the market must adapt to a national and international regulatory framework.
Today the member states of the G-7 have market economies defined by the rule of law and are within the framework of liberal democracies, whether parliamentary, presidential or semi-presidential.
There are two common misconceptions about market economics:
1. Sanctify the market as a means of social cooperation and not only that. Market is the solution to all economic and social problems. Pretend that everything in life is an economy and a market, and that same market operates within a legal order in which values are calculated. For example, recently the new trend of Friendshoring shows that when doing business, not everything is the economy and the market, but common values and principles and even geopolitical interests can be counted.
2. Of course another very common mistake is to demonize the market and banish it from economic life by attributing all sorts of evils to it. It is the fault of the elites of countries like North Korea, Cuba and the former Soviet Union. That is also the fault of the anti-market policies of our time.
Not everything is solved by market forces. The role of government is important along with economic, social and environmental policies. Not forgetting public policies such as health, social security, infrastructure, education and citizen security.
In today’s world, everything is not economic, the rule of law, democratic institutions, values and principles and even strategic and geopolitical interests play a role, as evidenced by the new trend of friendshoring.