Free Economics and Its Requirements

Free market not only allocates resources and Commodities effectively to competing uses but also effectively allocate return among market participants. It thus constitutes the best possible arrangement for satisfaction of individual needs. Markets are embedded in, entangled with or otherwise depend upon other parts of society. It maybe fostered or be inhibited by different socio-cultural orders or they may give it a particular local flavor. However, Creation of market needs institutions, the supply of which depends upon the capacity of the state and its responsiveness to its citizens. Transferring the state requires more than its withdrawal from directing economic activities. It is also crucial that the state is supportive of markets and private enterprise providing a sound investment climate for entrepreneurship. For market to function properly, government has to establish Institutions such as protecting property rights and enforcing contract mechanism. It also requires effort to build other institutions to sustain the growth momentum build resilience to shocks and facilitate socially acceptable burden sharing in response to such shocks. Thus market and State are not substitute to each but rather they are complementary.