After watching the first part of the documentary “ The power of the market, I can say I now have a much better understanding of what free markets are, the way these work, and more especially how this ideology developed into the economic hub of the world leading potency, China. A free market economy is an economy in which the allocation for resources is determined only by their supply and the demand for them, not by some designated authority. Hong Kong is an example to this, as they implemented a free market structure and it worked out quiet well. Prices set the foundation to any market, and if a free market economy is to be established, prices must be free to reach their own levels. In a free market, pricing should be based on the preferences of consumers and sellers, putting aside any government rules, regulations and policies that can possibly affect the course of the market. From the author’s point of view, which I happen to share, free markets work best for all members of society in achieving prosperity as each and every person is free to pursue their own objectives. Having the freedom to make the most of each person’s abilities and decide their own price standards, definitely gives people the chance of reaching better standards of living. It is the ordinary people of Hong Kong who benefit from this market structure. People are able to trade with whomever they want, buy from any source they want, sell to whom they want and set the price standards they are willing to work for.
This documentary also served to help understand the constant interaction and interdependence between people regarding trade. As Milton Friedman explained, one simple object like a pencil is made of many different components that come from very distant countries. The interaction among businesspeople is what allows markets to produce sufficient goods as to fulfill peoples’ needs. I