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What is the differences between a Free Market vs. Capitalism?

What Makes Free Market Different From Capitalism?

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What is Free Market?

• In a free market, several methods are used in exchanging the wealth of an economy. Any method can be applied by both parties as long as it doesn’t violate any law.
• A free market is the one that sets the distribution, prices for all services and goods and most especially, the production of a certain economy. Thus, no private owner has the capacity to dictate what’s going to happen in a free market.
• It follows the principle of demand and supply. It is a market that is free of personal bias.
• The buyers and sellers in a free market set the price of the goods that the buyer wants to buy.
• The state has no control over a free market.
• A free market is free from any influence that comes from an external institution.
• Capital is used to its limit in a free market.
• Most importantly, you have to know that free market doesn’t complete define capitalism.

What is Capitalism?

• It is mainly the production of wealth.
• It is a type of economy that is composed of worker and owners.
• Private ownership is the term that mainly describes capitalism.
• Owners in this kind of economy have complete power over the production and he or she has full rights for the profits of the economy.
• This results to unfair influence on the overall market.
• Actually, a capitalist economy doesn’t have a balanced level for its supply and demand.
• ‘Free markets’ are capitalism’s significant feature and not free competition.
• The price of commodities is set by the free market in a capitalist economy.
• Capitalism is bound to happen in most economies nowadays because of the constant growth of the industrial age.

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