Originally Posted by The Demon

The former. They love the idea of a classical free market economy.

Originally Posted by u-Bob

completely laissez-faire.

- The free market is the whole of all voluntary transactions that take place.
- People act.
- People act because they want to accomplish certain goals.
- These goals are different for every individual (some people prefer wine, other prefer beer, other prefer water. Some like to travel, others like to stay at home. Some like to watch reality shows, others like to watch sports...)
- To accomplish those goals, people use scarce resources (there isn't an infinite supply of gold, iron, oil, wood etc).
- All people are different so everyone is good at different things.
- People can increase the amount of goals they are able to reach by 'working together' instead of doing everything themselves.
- 'working together' = the free market. People specialize in what they do best or like doing most and then trade with each other. This allows for a much higher output then when everyone would do everything themselves. (Law of comparative advantage)
- Money is just an intermediary medium of exchange.
- The process that coordinates the market is the price mechanism. The price people are willing to pay for a product or service gives you information about how badly people want that product and about how scarce that product is.
- The factor that drives the market is entrepreneurship. Entrepreneurship = "finding 'new combinations' of labor, natural resources or capital goods for the purpose of making a profit." The entrepreneur is able to make a profit by finding out what people want (for example: if the price of widgets goes up because more people are now willing to pay a higher price for those widgets, that tells the entrepreneur that there are people who want widgets) and by offering people what they want or by finding a new product that performs the same function (or more) than the product people originally wanted.

What causes problems: Aggression. When some entity (like the government) forces people to buy products at a price they are not willing to pay for it. Or when that entity forces people to sell products at a price that they don't want to sell their products. Or when that entity forces people to buy products they don't want to buy. etc