Explain why a pure market economy would not work well if all people were guaranteed the same income by the gov?
Incentives, there are non. Those with the easier jobs.... won't have any intiatives to worker harder or more. Those with difficult jobs.... will work less... due to the comparative easier jobs. productivity will not maximize... nor will it be something that would promote much growth. Just status quo. pretty boring my 2 cents
Does a free market economy have taxes?
Maybe.A “free market economy” is an economy where the government does not intervene in pricing and does not have any government-run corporations.Taxes are when the government needs money to provide services, so they take the money from the citizens. This can be good or bad, but it has little to do with government intervention in the market.Here are some hypothetical situations involving markets and taxes:Free Market Economy, No TaxesThis is also known as anarcho-capitalism. There is a government, but with no sources of income, they don’t do much besides print money. To the best of my knowledge, there are no countries like this (besides maybe Liberland: https://liberland.org/en/about/)Free Market Economy, TaxesMost people would say this fits the definition of Libertarianism. The government has taxes (usually small taxes) and provides (usually few) services, and they don’t interfere in the markets. This more or less describes the United States.Planned Economy, No TaxesThe only way this would work is a Megacorporation. The government sells stuff and turns a profit. I cannot think of any non-fictional example. Maybe early Switzerland; I don’t know enough history to say.Planned Economy, TaxesThis is Marxist Communism. The government controls the economy and taxes the people. The Soviet Union is a good example.
In a pure free market economy, who would assume responsibility for defending the country against external attacks? How would this service be paid for?
This question makes me think of compounds in countries like south-africa, united states and israel. They have shields consisting of high thick walls of concrete or lead, equipped with lead glass at places, electrified protective fences, cameras and in addition servants carrying rifles etc with dogs. Initially the inhabitants of these compounds have to contribute protection taxes. However this protection is most likely not sufficient to keep the bad guys out. So as a second solution a private army with very heavy armor and weaponry is required. Special protection taxes have to be paid to the organizer, probably the “strong man”. This organizer collects the contributions that are obligatory. The “strongman” next offers his protection to others in the country. So he can use all kinds of weapons against intruders. He still has to be paid “protection tax contributions”. But there is hardly any difference with a dictatorship.
Why are there no pure free market economies in the world?
Well markets would fail without regulation. Regulation, is what causes equality in an economy. It causes income distribution to be as high as possible. It acts to ensure social welfare. Without regulation, like in a completely pure free market economy, productivity and efficiency would fall. So think about it, if there was no regulation there would be a few rich individuals who basically control the economy and those individuals aren't going to act to ensure social welfare for everyone other than those working for them. What does that mean? No health care, no crime protection, no public services! Which means output decreases. Hence the pure free market economy fails to perform as well as a mixed economy. There would be no efficiency either. If there's no competition, whats forcing a company to think of new ways to improve technology and increase output. Like John D. Rockefeller's oil company.
Why are there no pure free market economies in the world?
It's just part of how governments work. In order for their to be a pure free market economy the government would have to not intervene in the economy at all, which is obviously something no government would want to do. Governments always want more power and having a free market economy removes government power from a huge portion of people's lives. You could even argue that you can't have a free market as long as there is a government. Government funds come from taxation, tariffs, etc., which are all interventions in the market.
How would the market economy work if advertising was not fully tax deductible?
If you tax something, you get less of it. So the higher the tax rate on advertising, the less advertising there would be. You'd also have less stuff which is provided for free, but supported by advertising, like YouTube, or free newspapers.Advertising gets a bad rap as wasteful, but it does occasionally provide useful information to consumers, which helps the market function. If people find out about new goods, they will spend more, and they will get products they want. Advertising also provides a signal as to which companies are successful and which products they think you will like.
Which goods will not be produced in a pure free market economy and why not?
You would certainly expect that things that are today subsidized would be produced in reduced quantities in a free market, and things that are today taxed, or heavily regulated, would be produced in greater quantities.But would any items not be produced at all? You might think that the market for tax auditors would be eliminated. Or the market for wars in the Middle East would be gone. Or that the market for SWAT teams to break down doors in the middle of the night to arrest people for victim-less drug crimes would go away.On the other hand, I’m led to believe that it is possible today to hire someone to put you in handcuffs and whip you. There is a market, in Berlin, for those nostaligic about communism to drive around in Trabants. (They call it “ostalgia.”) To the extent masochistic consumers, or those nostalgic about Big Government, exist, almost any form of goods and services, including depravity of government, might still find a select clientele. Whether or not these government bureaucrats-for-hire would wear leather or latex is anyone’s guess.
In a market economy, economic activity is guided by ?
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