The market mechanism can be defined as the technique used to allocate resources. In the UK, we follow the form of a mixed economy where all of our resources are split up between the private and the public sector. The other two types of markets are planned, where all resources are allocated by the government, and a free market where resources are left to be allocated by individuals.
When individuals are left to allocate resources for themselves huge problems usually arise. This is known as market failure. The market, if left alone, is not allocating resources efficiently. For example, a monopolistic company can set high prices for its product, meaning only the rich can access it. Without the interference of the government to implement competition policies or laws, the company can get away with being very inefficient.
If humans are to be left alone then we shall face huge inefficiencies. We are already seeing them today. The world is a finite place.
For example, we are producing more CO2 emissions than the plant life can absorb. we are allowing the sun's radiation into our atmosphere by omitting pollutants . We are wasting land by feeding our demand for meat. We are filling up land-fill sites. We are using machines that damage our organs. We have made a majority of the world poor, whilst the minority are rich. We are over -fishing many oceans. We are over-consuming many resources.
Humans are running on a free economy. Our government is nature itself.
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