What Is a Market-Based Economy?

Market economy refers to the economic form of allocating social resources through the market. Simply put, the market is the place or contact point for the exchange of goods or services. Markets can be tangible or intangible. Parties involved in various trading activities in the market are called market entities. Market entities participate in market economic activities as buyers and sellers. In the activities, there is not only the relationship between buyers and sellers, but also the relationship between buyers and sellers. If the role of the government is not considered, there are two sectors in the market economy system, one is the public (consumer) and the other is the enterprise (manufacturer). The relationship between the two departments can illustrate the general principle of market supply and demand. ^[1]

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Market economy refers to the allocation of social resources through the market

In the history of the world,

Once the market economy emerges, it becomes the most efficient and dynamic carrier of economic operations. So far, most countries in the world have embarked on the path of a market economy. This convergence of economic systems indicates, on the one hand, that the market economy has a strong ability to absorb and be compatible, and on the other hand it also means the diversity and richness of economic models.

The market economic systems of the United States, Germany, and Japan are by far the most mature market economic models in the world. They each have their own characteristics and styles. The diversity and differences of this market economy model are not only the special content of each country's market economic system, but also the reflection of the differences in the relevant economic policies, national conditions, and cultural, historical traditions of various countries.

In 1991, the World Economic Cooperation and Development Organization in its research report "Transition to a Market Economy" proposed three main models of a successful market economy: the liberal market economy model in the United States; Germany and some Nordic countries.

Analyze the reasons why Western European countries took the lead in achieving industrialization. Fundamentally, it is due to the continuous wars of European countries and excessive internal consumption. In the late 15th and early 16th centuries, the opening of new routes to India and the discovery of the American continent, and global navigation Success that made the British

In the era of market economy, as industry becomes

The most basic feature of the Marketeconomy era is that industry replaces agriculture and occupies a decisive position in society and economy. Marketing has become the most common form of management, which has led to a series of profound changes in all aspects of society and economy.

Marketing requirements make extensive use of various

The market economy is a form of independent participation of millions of manufacturers and individuals in the market economy.

There are two theoretical traditions around market economy issues:

One is the tradition of emphasizing the absolute rationality of market mechanisms. This is caused by

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The invisible hand of the market, that is, the price. The price determines the allocation of resources, and supply and demand affect the price. Market participants determine the supply and demand. The participants are the majority. Therefore, the free market is determined by the majority. A business is where a few people make decisions. The market economy is the right and left hand to each other. Who owns

In theory, the market economy is a legal society, and people will continue to improve legislation. Therefore, under conditional control, process control must be done directly from the legal level. Without conditional control, the law can only be used to do ex post threats.

Once strict legislation is adopted, a market economy with independent operation and free competition can only be illegal, because the market economy will face

The academic community has debated the nature of the market economy from the spontaneous and embedded levels. The spontaneous viewpoint holds that the market economy is a spontaneous order and can generate an efficient resource allocation mechanism to meet the needs of individuals and society. This perspective highlights individual rights, individual rationality and freedom, and opposes government intervention in market behavior. The embedded perspective argues that the market economy is embedded in political power, social systems, and civil society, and is the result of state and social promotion. It should actively serve the realization of social equality and the social rights of citizens. Since the two perspectives adhere to their own theoretical boundaries, they have formed fragmented and one-sided phenomena of market economy cognition, and have misinterpreted the nature of economic behavior.

The vast majority of people believe that the market economy is the most effective means of allocating resources. To achieve their goals, various social changes must be achieved through the market economy as a carrier. On the other hand, they must apply their will to the market economy and make It changes in a direction that meets its goals. The ethical and institutional changes that have occurred frequently since the second half of the 20th century have prompted the traditional market economy to increasingly transform into an ecological market economy, and the ecological market economy has strongly changed the existing world. This mutually-promoting change is the most prominent feature of the world today. An irresistible trend for any country. Regardless of the domestic and international environment or international obligations, China is required to strengthen the construction of an ecological market economic system.