FREE MARKET COMPARISON

FREE MARKET COMPARISONUNITED KINGDOM, GERMANY, AND FRANCEWHAT IS A FREE MARKET SYSTEM UNITED KINGDOMGERMANYFRANCETHE COMPARISON TOPICS TO DISCUSSA market economy based on supply and demand with little or no government control. Prices are determined by unrestricted competition between privately owned businesses A completely free market is an idealized form of a market economy where buyers and sellers are allowed to transact freely (i.e. buy/sell/trade) based on a mutual agreement on price without state intervention in the form of taxes, subsidies or regulationFREE MARKET SYSTEM Investopedia

UNITED KINGDOM Encyclopedia Britannica Online. Encyclopedia Free market was accepted since the 18th centuryCurrent Freedom score of 75.8 ranked 13thRanked 5th out of 43 in Europe regionBuyers and sellers can freely transact with each other in U.K, but the government can intervene at any time to make decisions about public commodities and amenitiesCitizens have to pay for the road network through a petrol tax system controlled by the UK government

UNITED KINGDOMHealth careCoverage is universal. All those ordinarily resident in U.K are automatically entitled to health care, through the National Health ServiceProvided out of general taxationU.K spent about 9.3% of GDP on Health Care in 2012Goals to reduce health disparitiesHeritage.org

Social Market System a system in between free market and socialist planning. Called The Middle Way.Idea was brought into West Germany after World War IIDesigned to protect the freedom of the market on both sides of supply and demand. Wanted Economy free of state intervention and domination but also keep market fair and competitive.

GERMANY The German Economic Miracle and the "Social Market Economy"Retrieved

Socialism Aspect Government makes sure that a competitive market by containing monopolistic and oligopolistic tendencies. Was aimed at protecting poor and farmers from the forces involved in the market.Most Expensive Welfare system in the worldThe care for their citizens is very importantOne of the highest tax rates

GERMANY The German Economic Miracle and the "Social Market Economy"Retrieved

Free Market AspectOpenness to Global trade and investmentHigh amount of exports- cars, engineering goods, etc.Amount of items being exported balances out the high taxesFreedom score of 73.8 ranked 16thmeans that Germany is ranked 16th for a laissez faire style economy.Quality of life is second highest in the worldMost Germans are pretty well off

GERMANY The German Economic Miracle and the "Social Market Economy"Retrieved Birthplace of laissez-fairepolicy of minimum governmental influence in the economic affairs of individuals and societyRecent Economic Model: state capitalism and indicative planning (1945 to 1982) Dirigisme - control of economic activity by the stateOver the past five years, Frances economic freedom has waned as the size and reach of the government has expandedCurrent Freedom Score: 62.5 (Ranked 73rd)Last 20 years, legal dos and donts are smothering growth

FRANCE

"France Drowning in Rules and Regulations, Critics Say." Washington Post.Regulations flow from a desire to meet social goals, such as:environmental protectionaccident preventionwelfareRanked 1st in social spending at nearly 32% of GDP (OECD)Overall government spending = 57% of GDPFrance is the second largest exporter and importer in EuropeGovernment has pursued reform measures to increase the economys competitiveness and flexibilityFRANCE

Economy: Facts, Population, GDP, Unemployment, Business, TradeFrance Trade, Exports and Imports.COMPARISONS

Business freedom is a quantitative measure of the ability to start, operate, and close a business that represents the overall burden of regulation as well as the efficiency of government in the regulatory process.heritage.orgCOMPARISONS

Trade freedom is a composite measure of the absence of tariff and non-tariff barriers that affect imports and exports of goods and services.heritage.orgCOMPARISONS

Fiscal freedom is a measure of the tax burden imposed by government. It includes both the direct tax burden in terms of the top tax rates on individual and corporate incomes and the overall amount of tax revenue as a percentage of GDP.heritage.orgCOMPARISONS

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Monetary freedom combines a measure of price stability with an assessment of price controls. Both inflation and price controls distort market activity. Price stability without microeconomic intervention is the ideal state for the free market.heritage.orgCOMPARISONS

In an economically free country, there would be no constraints on the flow of investment capital. Individuals and firms would be allowed to move their resources into and out of specific activities, both internally and across the countrys borders, without restriction.heritage.orgCOMPARISONS

Financial freedom is a measure of banking efficiency as well as a measure of independence from government control and interference in the financial sector. State ownership of banks and other financial institutions such as insurers and capital markets reduces competition and generally lowers the level of available services.heritage.orgCOMPARISONS

The property rights component is an assessment of the ability of individuals to accumulate private property, secured by clear laws that are fully enforced by the state. It measures the degree to which a countrys laws protect private property rights and the degree to which its government enforces those laws. It also assesses the likelihood that private property will be expropriated and analyzes the independence of the judiciary, the existence of corruption within the judiciary, and the ability of individuals and businesses to enforce contracts.heritage.org COMPARISONS

Corruption erodes economic freedom by introducing insecurity and uncertainty into economic relationships. The score for this component is derived primarily from Transparency Internationals Corruption Perceptions Index (CPI) for 2010, which measures the level of corruption in 178 countries.

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The labor freedom component is a quantitative measure that looks into various aspects of the legal and regulatory framework of a countrys labor market. It provides cross-country data on regulations concerning minimum wages; laws inhibiting layoffs; severance requirements; and measurable regulatory burdens on hiring, hours, and so on.heritage.org

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