The UK economic system is based on the free market system and is one of the most globalised economies in the world. It is a successful country which accepts this system. Although many countries have success in this system, sometimes it is not suitable for developing countries such as China or Thailand. Most countries try to practice the free market trading in order to enhance their economic system and undeniably, this system is an ideology which each country may have to adapt appropriately. Even though capitalism and free trade are currently allowed to operate in UK, the role of government also plays a crucial role in many economic activities to ensure fairness of exchange transactions.

Free market can be defined as an economic system which buyers and sellers are responsible for making their choices without regulation by the government. The price mechanism plays an important role in a free market to determine allocation and distribution goods and services. This system has several benefits which both of the producers and consumers satisfy with the price. It seems to be that free market system has many great advantages but there are a number of arguments which indicate the possible disadvantages. The fundamental characteristic of a free market is that people who can control resources and wealth have privilege to purchase goods and services at high price so the poor people are thrown out of the market implicitly. Because of this situation, several ethical problems such as unemployment, crime, and environmental problems increase.

This essay will focus on an analysis of ethics and benefit of the UK free market since 1990. The first section examines the benefits and drawbacks of free market trading. The feature of free market is based on individualism and utilitarianism which form two sides of the argument. Next, the ethical problems caused from free market system will be highlighted. Due to the aspect of freedom, people may do what they want to regardless of reconsideration of society. The last point will analyze the possibility of the UK free market trading in the future and evaluate advantages and disadvantages for developing countries.

1. An analysis of benefits and drawbacks of the free market trading

1.1 Background the UK free market

The free market system was accepted since the eighteenth century in the UK. This system was continuously developed until now so as to obtain maximum benefit. Even though the freedom, which is the basic concept, plays a key role in the UK economic system, practically the government may enter to the market in some sections especially public goods and services. In other words, most decisions in UK are made by the price mechanism in the market and some decisions need to manage by the state such as education, hospital, and public utility. For example, road users have to pay for the road network through the petrol tax system controlled by the UK government (Bearshaw et al., 2001). They also confirmed that the state is responsible for almost 40% of all expenditure in the UK.

1.2 The concept of free market

Individualism is the basic feature of the free market system. It can be defined as ‘the nature, evolution, and function of such institutions in terms of the unplanned and unintended action of free individual agents’ (Schotter, 1990, p. 6). Buyers can easily purchase any commodities and sellers also produce and distribute whichever products they want to. There are no obstacles put in place by the state to limit the flow of goods and services between trading nations (ibid., p.7).

1.3 The benefits of free market

Based on the concept of individualism, there are three benefits of the free market system. First of all, Schotter (1990) stated that the entrepreneurs can make their own decisions about quantities and what goods should be produced. He also explained that if they produce a product which nobody want to or they produce too much, their profit will be decreased, reducing their income and forcing the production of new different products which the market demands. Secondly, the consumers may have various choices and can choose to buy quality goods. Every entrepreneur wants to produce the products which are sold to many people so there are also many competitors that can produce the same goods or better through the market. Therefore the producer should create distinctive products or produce high quality goods and services in order to increase sales. Lastly, there has been an increase in higher levels of education for graduate employment. Philo and Miller (2001, p.3) stated that ‘The essential individual freedoms were for employers to employ, for workers to be able to sell labor without the ‘restrictions’ of the trade union and for consumers to be able to buy’. The demand for the right to work is therefore converted to workers who have the individual’s right to go to work. It is suggested that the workers attempt to enhance their skills so as to satisfy the wage rate because everyone can sell their abilities into the market and the employers are free to hire employees at the lowest possible price. If people have different skills which are required in the market, they will have several opportunities to choose their jobs and request higher salaries.