Mixed economy for Bangladesh
Wednesday, 25 November 2009
Kazi Shafi Kul Alam, MBA
A free market describes a market without economic intervention and regulation by government except to regulate against force or fraud. A free market requires protection of property rights, but no regulation, no subsidy, no single monetary system, and no governmental monopolies. It is the opposite of a controlled market, where the government regulates prices or how property is used.
The theory holds that within the ideal free market, property rights are voluntarily exchanged at a price arranged solely by the mutual consent of sellers and buyers.
By definition, the buyer and seller do not coerce each other, in the sense that they obtain each other's property rights without the use of physical force, threat of physical force, or fraud, nor are they coerced by a third party (such as by government via transfer payments) and they engage in trade simply because they both consent to the deal and believe that what they are getting is worth more than or as much as what they give up.
Price is the result of buying and selling as determined by the law of supply and demand.
Free market contrasts sharply with controlled market or regulated market in which governments directly or indirectly regulate prices or supplies, which, according to free market theory, causes market to be less efficient. Where government intervention exists, the market is a mixed economy.
Support for the free market as an ordering principle of society is, above all, associated with liberalism, especially the liberalism of the 19th century.
Later ideological developments, such as, libertarianism and objectivism also support the free market, and insist on its pure form. To most libertarians, there is simply no free market yet.
Price fixation: Demand and supply are always equal as they are the two sides of the same set of transactions. However, in a qualitative sense, demand for an item (such as goods or services) refers to the market pressure from people trying to buy it.
They will "bid" money for the item, while sellers offer the item for money. When the bid matches the offer, a transaction can easily occur.
When demand exceeds supply, suppliers can raise the price, but when supply exceeds demand, suppliers will have to decrease the price in order to make sales.
Consumers who can afford the higher prices may still buy, but others may forgo the purchase altogether, demand a better price, buy a similar item, or shop elsewhere. As the price rises, suppliers may also choose to increase production. Or more suppliers may enter the business.
Bangladesh context: The concept of free market economy developed in Europe and America in the 19th century. The socio-economic structure of Europe and America is totally different from that of Bangladesh.
Corruption, bribe, terrorism, un-ethical politics, syndication over market, peddling of government influence etc. are rife in Bangladesh. So, in a country like Bangladesh, the market should be liberalised with limitation.
Economic policy is not the only factor in Bangladesh. Others factors like market syndication, price monitoring etc should also be taken into consideration.
It has been observed that syndicate is a big factor. The government needs only the will to break the chain of syndication.
The government should open a monitoring and price control cell permanently with efficient people, equipped with the latest communication equipments, to collect the latest CIF from every corner of the world for all imported commodities.
The cell can then fix the standard sales price of an imported commodity after calculation of all duties with a certain GP. A task force should be attached to the cell so that they can take necessary action any time. And the standard price chart should be published in the newspapers.
The government plays the most important role in the economy of Bangladesh and mixed economy should be maintained here with a view to doing good to the people.
Kazi Shafi Kul Alam MBA,CACC, House-43,Road-2,
Sector-13,Uttara,Dhaka-1230,
Phone-01711337539
A free market describes a market without economic intervention and regulation by government except to regulate against force or fraud. A free market requires protection of property rights, but no regulation, no subsidy, no single monetary system, and no governmental monopolies. It is the opposite of a controlled market, where the government regulates prices or how property is used.
The theory holds that within the ideal free market, property rights are voluntarily exchanged at a price arranged solely by the mutual consent of sellers and buyers.
By definition, the buyer and seller do not coerce each other, in the sense that they obtain each other's property rights without the use of physical force, threat of physical force, or fraud, nor are they coerced by a third party (such as by government via transfer payments) and they engage in trade simply because they both consent to the deal and believe that what they are getting is worth more than or as much as what they give up.
Price is the result of buying and selling as determined by the law of supply and demand.
Free market contrasts sharply with controlled market or regulated market in which governments directly or indirectly regulate prices or supplies, which, according to free market theory, causes market to be less efficient. Where government intervention exists, the market is a mixed economy.
Support for the free market as an ordering principle of society is, above all, associated with liberalism, especially the liberalism of the 19th century.
Later ideological developments, such as, libertarianism and objectivism also support the free market, and insist on its pure form. To most libertarians, there is simply no free market yet.
Price fixation: Demand and supply are always equal as they are the two sides of the same set of transactions. However, in a qualitative sense, demand for an item (such as goods or services) refers to the market pressure from people trying to buy it.
They will "bid" money for the item, while sellers offer the item for money. When the bid matches the offer, a transaction can easily occur.
When demand exceeds supply, suppliers can raise the price, but when supply exceeds demand, suppliers will have to decrease the price in order to make sales.
Consumers who can afford the higher prices may still buy, but others may forgo the purchase altogether, demand a better price, buy a similar item, or shop elsewhere. As the price rises, suppliers may also choose to increase production. Or more suppliers may enter the business.
Bangladesh context: The concept of free market economy developed in Europe and America in the 19th century. The socio-economic structure of Europe and America is totally different from that of Bangladesh.
Corruption, bribe, terrorism, un-ethical politics, syndication over market, peddling of government influence etc. are rife in Bangladesh. So, in a country like Bangladesh, the market should be liberalised with limitation.
Economic policy is not the only factor in Bangladesh. Others factors like market syndication, price monitoring etc should also be taken into consideration.
It has been observed that syndicate is a big factor. The government needs only the will to break the chain of syndication.
The government should open a monitoring and price control cell permanently with efficient people, equipped with the latest communication equipments, to collect the latest CIF from every corner of the world for all imported commodities.
The cell can then fix the standard sales price of an imported commodity after calculation of all duties with a certain GP. A task force should be attached to the cell so that they can take necessary action any time. And the standard price chart should be published in the newspapers.
The government plays the most important role in the economy of Bangladesh and mixed economy should be maintained here with a view to doing good to the people.
Kazi Shafi Kul Alam MBA,CACC, House-43,Road-2,
Sector-13,Uttara,Dhaka-1230,
Phone-01711337539