Free market
Topic: Equality and Social Justice · NCERT: Class 11, Ch 4 "Social Justice"
Meaning
A free market is an economic system in which people are free to own property, make contracts and compete with one another on prices, wages and profits. Its supporters say the results are just, because the market only rewards skill and effort and does not care about a person's caste or gender. Many supporters now accept that the state should guarantee a basic minimum. However, they want private firms to supply the services and the state only to help people pay for them, through vouchers, insurance or direct benefit transfers (DBT). Critics, including NCERT, say markets favour people who are already strong and leave out the poor.
Example
A private hospital or a good private school may not open in a remote village because it would not make a profit there. If it does open, it may charge more than poor families can afford. In such cases the state has to step in to provide health care and education.
Don't confuse with
- Neo-liberalism: the free market is an economic system. Neo-liberalism is a political ideology from the 1980s that pushes free markets through deregulation and privatisation.
Related concepts
- Social justice
- Basic minimum needs
- Capability approach
- Minimal state
- Modern liberalism
- Neo-liberalism