A free market economy can provide limited product choices. Repetition is what primarily defines the advantages and disadvantages of the free market economy. As a result, it has no system to care for those who are at an inherent competitive disadvantage. The ends will always justify the means when it comes to the survival of a company in this economy. A free market economy cannot exist if the people making purchases do not have the freedom to express themselves. At some point, only the wealthy can continue moving forward – and eventually, almost all of the wealth gets put into the hands of a designated few people. Sebastian Lee has been writing professionally since 2005. A disadvantage of a market economy is that sometimes some of the flow-on effects of profit-seeking economic activity can be injurious to other individuals or groups. A free market economy enables organizations to become innovative when imagining new ideas. There is little or no government control over the way that businesses and customers interact with one another. We must find a balance where the needs of a company and those of individuals can come together in profitable ways for everyone. 1. It took over 30 years for the middle class in the United States to see an increase in the value of their salaries. If large businesses fail in a free market economy, so does everyone else. Market failures can create severe recessions and ongoing economic consequences. Misleading people about the quality of an item or the availability of services causes circumstances that could force the company into bankruptcy or worse. As people have vastly differing abilities and motivations, over time the market economy tends to see an ever-increasing concentration of wealth in fewer and fewer hands. On the basis of this criterion, what is decisive is not what someone says or how well they say it, but what they do, what it gets them to do, and how "successful" that is. Market Economy: Advantages and Disadvantages, Marxist Theory   ~   Dialectics   ~   Alienation   ~   Class Consciousness. These people then contribute to the greater good by promoting more competition globally. This process creates high levels of competition, but it can also reduce the amount of choice that is present for the average consumer. Although not everyone achieves their personal definition of a dream, every individual gets to start on their journey in a similar way. That means it is the worker who takes on the most risk and receives the least amount of rewards. Customers always have the opportunity to vote with their checking accounts. That means the products and services that become available to the average person have more long-term value to consider. History has taught us that going 100% in either direction creates more harm than good. Instead of creating investments that provide slow and steady gains, short-term profits are often the priority in a free market economy. 6. The primary objective of every business in a free market economy is to earn as much profit as possible. A single moment to achieve success isn’t the same as a lifetime of opportunities. Although organizations can survive when they provide innovative resources to their core demographics, this process doesn’t apply to their employees. When someone receives the choice between two products that offer similar benefits, it is the customer who votes with their purchase to decide which one survives. A free market economy requires consumption to survive. 2. Free market economies regulate themselves naturally. They also become very anxious and economically insecure, afraid of losing their job, their home, their sale, etc. "Me first", "anything for money", "winning in competition no matter what the human costs" become what drives them in all areas of life. The disadvantages of a market economy are as follows: Competitive disadvantages. It’s the epitome of the expression that a “rising tide lifts all boats.” Companies are developing goods and services as a way to solve the pain points of consumers at the local level. Perhaps the clearest advantage of a market economy are the efficiencies required to operate in a highly competitive economic environment. As there is the incentive of great reward for fulfilling the needs of the market, much human endeavour goes toward identifying and meeting these needs. It is an impressive list. The question now arises of how to interpret and judge Kang's remarks in these and related areas. But if a crisis does away with most of the important advantages associated with the market, this is no longer possible. A market economy is defined by cutthroat competition, and there is no mechanism to help those who are inherently disadvantaged, such as the elderly or people with disabilities. If these organizations were to go out of business for any reason, then the jobs and money that would immediately get removed would be devastating to families and other companies. I was especially pleased to learn of the growing interest in Marx's theory of alienation and his theory of truth, and of the widespread opposition to all kinds of dogmatism. Because a company can only become innovative with individual skills and talents, the strongest economies are the ones that have the most diversity in its structure.