What Is a Free-Market Economy?

A free-market economy is an economy in which the allocation for resources is determined only by the supply and the demand for them.  Put another way, the profit motive combined with individuals' preferences combine to direct resources in a free-market economy.  This stands in contrast to most other economic systems where the government plays the role of central planner to varying degrees and organizes the flow of resources to the production of various goods and services.

 In most scenarios, capitalism can be thought of as a synonym for free-market economic system.

In practice, a pure free-market economy is mainly a theoretical concept as every country, even capitalist ones, places some restrictions on the ownership and exchange of commodities.

Terms related to Free Market Economy / Free Market Economies:

About.Com Resources on Free Market Economy / Free Market Economies:

Writing a Term Paper? Here are a few starting points for research on Free Market Economy / Free Market Economies:

Books on Free Market Economy / Free Market Economies:

    Journal Articles on Free Market Economy / Free Market Economies: