Market economy
From The Art and Popular Culture Encyclopedia
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"Immanuel Wallerstein characterised the world system as a set of mechanisms, which redistributes surplus value from the periphery to the core. In his terminology, the core is the developed, industrialized part of the world, and the periphery is the "underdeveloped", typically raw materials-exporting, poor part of the world; the market being the means by which the core exploits the periphery." --Sholem Stein "Physical attractiveness, both as subjectively experienced and objectively measured, operates in accordance with exchange-market rules. Individuals with equal market value for physical attractiveness are more likely to associate in an intimate relationship such as engagement than individuals with disparate values".Who Will Marry Whom?: Theory and Research in Marital Choice (1976) is a book by Bernard I. Murstein. |
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A market economy is an economic system in which the decisions regarding investment, production and distribution are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production.
Market economies range from minimally regulated free-market and laissez-faire systems where state activity is restricted to providing public goods and services and safeguarding private ownership, to interventionist forms where the government plays an active role in correcting market failures and promoting social welfare. State-directed or dirigist economies are those where the state plays a directive role in guiding the overall development of the market through industrial policies or indicative planning—which guides yet does not substitute the market for economic planning—a form sometimes referred to as a mixed economy.
Market economies are contrasted with planned economies where investment and production decisions are embodied in an integrated economy-wide economic plan. In a centrally planned economy, economic planning is the principal allocation mechanism between firms rather than markets, with the economy's means of production being owned and operated by a single organizational body.
See also
- Capitalism
- Classical economics
- Co-determination
- Economic freedom
- Economic liberalism
- Free market
- Free-market anarchism
- Gift economy
- Grey market
- Keynesian economics
- Laissez-faire
- Market
- Market socialism
- Market structure
- Mixed economy
- Neoclassical economics
- Planned economy
- Price system
- Regulated market
- Social market economy
- Socialist market economy
- Social ownership
