What is free-market capitalism? How are resources distributed in a free-market economy? Free-market capitalism is an economic system where factors of production are controlled by private entities (individuals and firms) with little to no government intervention. Firms charge the highest price consumers are willing to pay and workers earn the highest wages firms are willing to pay for their labor. In a free-market capitalist economy, firms are motivated to operate as efficiently as possible to keep their market share. In this article, we’ll discuss the ideology of free-market capitalism and what happens when it’s realized in practice.
What Is Free-Market Capitalism? Definition & Examples
