explain why a completely free market economy would not be a practical on any major country?

Question

plz/thx

Answer 1

The major country cannot impose the complete free market.
Two barriers of free trade are Quotas and Tariffs. A Practical major country may not want to completely put away these barriers. Let me tell you

As I have learned, if the major country, example US doesn't propose the quota, the country, such as China will import too much import sensitives (textile) into the US. Thus, the domestic manufacturers will go down. For this reason, the US must protect the domestic producers, too.

Also, the practical country may need to use Tariff to deal with "dumping" from other countries. US also block certain imports in order to protect industries that are necessary for national defense.

Anyway, if there are too many imports, the country's deficit must rise dramatically. (Quotas_

Answer 2

A completely free market economy IS practical for ANY country, major or not, taking into account both domestic economic activity and overseas trade.

During the early history of the US, before the US imposed any of its own taxes or tariffs, the US economy WAS free and it worked. The very first domestic tax, the tax on whiskey, was the cause of a major rebellion and it was the beginning of the uncontrolled growth of governmental power. So I guess we had something like 10 years of freedom. The great benefit received from government taxation was that government could then grow as much as it taxed; NO GOOD was achieved. All people who favor government intervention want EITHER more government or to coerce societal engineering, both of which are harmful trends. Government is the major wielder of force, and coercion is simply legalized violence.

Today, ordinary people, academics, and politicians are simply AFRAID of the free market because they don't understand how it AUTOMATICALLY fixes economic inequities and dislocations, without the loss of freedoms.
Every intervention by government produces more problems than it solves, leading to more government actions by legal requirements and/or prohibitions.

Every government intervention in an economy is labelled with a deceptive name so that truth of its harm is masked. The so-called Free Trade acts are acts that PREVENT certain activities. Logically, how can a prohibition enhance freedom? There are already laws against force, theft and fraud. They simply don't apply to the major perpetrator: government. Today oppression is freedom and war is peace.

For a full explanation, you should read the economics works by such Libertarians as Friedrich von Hayek. Don't be surprised if your teacher spouts hateful words about this defense of true economic freedom. Freedom is scary!

You will note that ALL of the problems that people say we need market intervention for HAPPEN NOW, despite all the government inspections, limitations, guidelines, taxes, tariffs, import quotas, and rulebooks. Not ONE problem has EVER been solved by government that didn't cause another problem to surface or grow. Of course, many STUPID economists and politicians will say, since the current government actions are not helping, let's have government do more! One definition of insanity is to continue doing what has not worked before.

I suppose you have heard of economics-related problems that have occurred AFTER the government set up protective laws, haven't you? I'm talking about food purity laws, import inspection programs, agricultural inspections, consumer protection laws, banking regulations, utility regulations, whistle-blower protection laws, laws to imprison perpetrators of fraud, theft, and embezzlement, professional ethics laws, licensing laws, and anti-bribery laws. Every year you will find news stories numbering in the hundreds about violations of these things, and resulting bankrupcies and deaths of ordinary people, and you have only heard about the EXPOSED, PUBLIC stories, not the undiscovered ones and the prosecutions that failed, nor the ones "negotiated away" or put aside for "economic peace" by dishonest officials and politicians! By messing around with the free market for 200 years, very few people can imagine how miraculously it CAN work.

Answer 3

Government interfere in the economy in the following ways.

Provide for public goods-That is things that markets do not provide enough of because they have positive externalities. Examples are police, courts, fire departments, roads, education, research, and public health, most of which few economist find fault with.

Regulate To enforce quality standards to protect public welfare and to assure business practices are not anti-competitive, bank remains solvent, etc. Many economists argue that regulation is over done but few would argue in favor of none,

Subsidies for the poor, the old, farmers, small business, home owners, exporters, savers, investors, energy savers, etc. That is almost everybody as a way of manipulating behavior or addressing problems. Many of these programs are controversial, and they vary from country to country.

Conduct monetary and fiscal policy to smooth business cycles. There are complaints about how it is done but few argue that it is not the role of governments.

Answer 4

I don't know. I thought I was living in a free market economy here in the USA as a "laissez-faire" system. Of course, I guess the government does butt-in from time to time. In that sense, I suppose it's not totally free market based.

Answer 5

I might be wrong, but my understand of free market economy is an economy which is not regulated by the government.

If the market is not regulated, potentially dangerous and low quality products will find their ways to the market, which is not desirable for most countries. Thank you.

Answer 6

The Great Depression is a great example of why government intervention is needed (to a point).