Discuss why in reality most economies are mixed economies.

SYSTEM OF THE FREE MARKET ECONOMY

The background of this economy is private ownership and individual economic freedom, i.e. the market of this economy operates only on the demand and offer basis, when buyers and sellers by themselves decide what and how to manufacture (Corsi, C. et al., 1997). This the main point of this system. Therefore this system is referred to as the system of the market-driven economy.

According to Schotter, A. (1990), In the countries of free market economy, thousands of markets are available, these markets are interconnected by millions of interfaces. Under the conditions of such a complex economy, processes are appropriately controlled and regulated by prices. Changes in market conditions are reflected by changes in prices as the prices inform and encourage the market players to change their behavior (Cobin, M., 2009). In this way, they introduce an order in a chaos.

One should not forget that, besides relationship between sellers and buyers and the price arising as the result of this relationship, there are several other market-driven economy elements. One of these elements is private ownership. According to Gianari, N. (1995), Private ownership is the ownership which is disposed by individual personalities and private companies; this is the prime right of the free business system which procures entities with freedom to own and use the products which have a value and to dispose them.