Question

One argument in favor of free market/laissez-faire capitalism is based on the right to liberty. Explain a criticism of this argument. Be precise and use your own words.

Answer 1

in this type of economy, there is no or less governmnet intervention. in such economy, nation's trade and production of goods and services are allowed to produce by private owners whatever they wants to produce they can, without any government restrictions.

pros. of the open/ free market are as:-

1) boosts the economic growth by giving incentives to private sector and leads to innovation.

2) gives encouragement to the small, medium and large size industry.

3) consumers and producers of the nations becomes more aware and leads to less bureauocratic government .

cons. of the open/free market are as:-

1) it increases the economic inequality. as the richer becomes more rich and poorers become more poor.

2) it increases the risk that firms may gain more monopoly power which may lead to exploit consumers.

3) it may lead to misallocation of the reasources too.