Market_Economies

Market Economies are essential in to day’s world. In a market economy people and firms act in their own best interests for the questions what, how and for whom. One of the better advantages of a market economy is the ability it has to adjust to new factors that are introduced to it. In a world with constant change there must be a system that is flexible and able to go with the flow. For example, in the 1970’s there was a shortage of gasoline, the demand for larger cars was replaced with the demand for more gasoline efficient cars. Later when the gasoline prices fell and were more affordable again the demand changed again. The market economy has no problem adapting to the changes in its environment. Another factor benefiting factor of the market economy is the freedom it offers to the people. The government has little or no power in the market economy. This gives the power to the people. The people therefore have the power to make their economic decisions. The market economy follows Adam Smith’s philosophy of hands off. The term ”hands off” refers to the government leaving the economy alone and letting the people govern it. Smithe said, "[an individual] intends only his own gain is led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for society that it was no part of it. By pursuing his own interest [an individual] frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the [common] good." (Wealth of Nations) This is good because the power is spread of instead of in the hand of one person or government.