Who should have the authority to set prices, the free market or the state? According to the Dictionary, the free market is “an economic system in which prices are determined by unrestricted competition between privately owned businesses”, and the state is “a nation or territory considered as an organized political community under one government.” Right now, the United States economy is run by the free market (an economic market run by supply and demand) with some government regulation. Politicians and economists are debating over how much government regulation is needed for the United States economy.
The prices of a product is determined by supply and demand, sellers against sellers, buyers against buyers. The scarcity of one product compared to another product determines the measurement of the price of that product. Also, the person who owns the product that is being sold gets to determine how much of the product to make, how much of it to sell, and the price of the product.
Who should have the authority to set prices, the free market or the state? Why? In my opinion, I think that the free market should have the authority to set prices. Here are my reasons for why I chose the free market to have the authority to set prices. In the free market the prices are set by the business men who own the product that people are buying. These men get to chose the prices of their products according to there scarcity, and how many of the product that they can make at a time. Plus, the economy is already run by a free market, and I think it is doing quite well. The only thing about this that I disapprove of is the government regulation that most free markets have. Some free markets do not have government regulation, but most do. If the state was in charge of pricing things, I bet that they would try to make everything similar to the same price and try to give everyone an equal share in selling it and buying it, which is not good. Basically that gets rid of competition, which makes companies try to improve in order to get the most customers. If competition goes away, then the companies have no need to improve, and nothing ever gets better. The free market is where the businessmen of different companies price their products according to the scarcity of the product, and how much of the product that they can make at a time. Basically, if people pick the prices of their own products, then that creates competition between companies which forces them to get better. Without competition, then the economy stays the same and never gets better. Therefore, the free market is better at controlling the prices of products than the state is. So, let’s just say that the economy is better off if the free market is in charge of controlling the prices of products, because if the state was in charge, I bet the economy would fall apart eventually.