Having a free market economy means that certain essential goods and services that we have come to expect from our governments are not provided or left up to the good will of private enterprise to provide them on some level, if they choose. As we have seen in very the recent economic picture of the world, these days, corporations always choose profits making and company benefits over aiding the people.
In a free market economy, no one provides education, health care, or housing. To sum it up, the rich get richer and the poor become more deprived. There are no public goods such as street lighting, police, and fire services, or public transportation, because there is no profit in providing these goods. Products like cigarettes and alcohol will proliferate because there is profit to be taken by making them available to the public. The environment, road conditions, air, water supply will be ignored, again, because it doesn’t put money in a rich man’s pocket. To sum it up there will be wasted resources in a free market economy, social injustice will prevail and economic instability will result.
Monopolies will be another common occurrence, due to lack of regulation within the industries. Small business will cease to exist. Competition will prevent new players or start ups in the marketplace. The monopolies will result in the artificially inflated pricing for all goods, which can be restricted to simply drive up the price and availability. Consumers will be forced to pay those higher prices for bad quality goods and lousy levels of service and supply. Since the market is free there is no one to stop the corrupt corporate exercise of power. Government take over by business is inevitable.
Free market economies make luxury goods readily available to the wealthy consumers because this is where the money is. The drawback is that providers allocate all resources to pleasing the whims of the wealthy while neglecting the poor. Bear in mind, there will be no middle class in this type economy. It is either rich or poor, with no in between. Private firms in a free market ignore all social costs passing them on to those who can least afford them. Probably the worst problem of all is the neglect that will happen to the environment. There will be nothing to stop industry and corporations from polluting the air and literally killing the environment.
The disadvantages of a free market economy are many, leading one to wonder why would anyone be in favor of living under such a system. Well, in a free market place, capital flows to the source of greatest return which leads to maximum expansion. Anyone who has a good idea can get it to market more quickly. Free Market represents the ultimate in supply and demand. It is also easier for the guy with the good idea to transform persistence and hard work into major material wealth.
To summarize, free market economy is a survival of the fittest scenario. In other words, those who have the best ideas and can market them, will make it. Those who can’t will fall by the wayside. Money or the making of money controls all. Social policy and things such as health care, police and fire protection do not thrive, and in most cases, do not exist in a free market economy.