Free market

A free market is a term in economics that refers to an economy operating with little to no interference on the part of a government. This type of economic philosophy is the backbone to the system of capitalism, and is sometimes referred to by the French phrase "laissez-faire," meaning to "let be." Free markets are largely dependent on the process of supply and demand, where prices are determined by the amount of the product in the market, as well as the number of consumers who wish to purchase that product. Advocates of free markets say that the the market will punish business whose practices are not beneficial, as consumers will take their business elsewhere.

Most countries attempt to operate under what is referred to as a 'mixed economy', usually said to be an economy that contains both private-owned and state-owned enterprises or that combines elements of capitalism and socialism, or a mix of market economy and command economy. For example, the UK is said to have a free market economy in almost all goods and services but retains a bureauocratic state run national health service. This is intended to ensure that British subjects have accesss to health care which is supported out of state coffers. The opposite of a free market is a command system, in which the government regulates all businesses for the theoretical central planning of the economy, although this has been shown to have negative effects. Economist Frederich Hayek warned however of mixing a planned economy with a competetive economy, "tools if they are incomplete, and a mixture of the two means that neither will work."