THE MARKET essays

THE MARKET essays DISCUSS THE MERITS AND DEMERITS OF THE MARKET AS AN INSTITUTION OF EXCHANGE The global economy is categorized into two broad economies i.e. the command economy that is directed by a centralized government and a market economy which is based on private enterprise. Market economy is gaining global popularity as an economic ideology that has been tested and proved to provide fair level playing ground where the fairest of them all gain from the consumer purchasing power. ... command economy model has failed to sustain economic growth to achieve a measure of prosperity, or even to provide economic security for its citizens... the market economy is not an ideology but a set of tested practices and institutions about how individual and societies can live and prosper economically. It is therefore evident that market economy is the most preferred system due to its many avenues and comfort of and variety of choice. The market economy is believed to be fairer because of its decentralized system and Adams Smiths principle of the invisible hand. Market is defined simply as buying and selling of goods and services in exchange of money. The market concept operates under two hypotheses that: firstly the market emerged as a result of need of the economic exchange and secondly, the market only arises as a result of external factors. From the above theories we can therefore deduce that the market operates under the principle of price mechanism i.e. anything that has a price also has a market. However, it should be noted that demand and supply as the rhythm of the market determines the price depending on the presupposed value. This paper is divided into three parts and it seeks to first define the concept of the market, second to define the role of the State as a guarantor of free fair and stable economy through provision of necessary market infrastructure and lastly the papers will seek to identify the meri...