Tamoor Ahmed Malik
As a consumer, when we buy something we make sure that it’s a right thing at a right price. We chose them because they reflect a particular sense and standard of living. The contemporary free markets offer quality and variety; they also provide choices to pick from.
But in developing countries, where inflation hits often, and the other countries where people like to buy best quality, the prices are not integrated with the society. They are higher than average and by cutting the
prices one have to compromise on quality which is again not acceptable in some cases.
But how these prices are carved out, how shopkeepers decide price and what factors are taken into consideration while deciding them. The prices are decided by the seller in which he includes his cost, profit and the taxes. It is indeed a very simple formula but what if they are making huge profits and the
free trade and free markets allow them to do this. The actual price of an item is far lower than on the showroom.
As the population of the world grows so are the demands. With that, production enhanced and it generated employment. The need of technical labor grows in a lightning pace and race to produce on massive scale with cheap prices without compromising on quality have formed competitive markets and from that
development, emerged the world’s biggest and strongest economies. All of this made possible by free trade occurrence.
Elucidating Free Trade
The Free Trade or free market economy is a term used in international trade which helps in overextending imports and exports. The free trade has widened the concept of manufacturing that offered people around the world with lot of options. With this, begins a new generation of technological advancement. Industries expanded to a new level which had not been seen in the past. Due to free market economy, production was not only limited to a specific community but everything was available everywhere.
After the First World War and during the great depression many countries like US and Germany had imposed several barriers in the way of free trade to limit the imports from other countries to support the local industry. Likewise then USSR had claimed to have avoided the depression due to its close markets and socialist economic structure.
However, most of the nations are signatories of the WTO agreements which support and work for the free market economy. But the scale of the industries, the labor wages, laws, environment, efficiency and technological advancement turned some countries, or to be more specific, some manufacturing companies,
so much competitive from others. The free trade, where it help few to emerge big, also pushes many down, i.e it almost vanishes the small industries from many countries. Countries like USA, UK, Pakistan, India, the European continent, they all revisited their trade policies and adopted protectionist policies to help support
local employment and industry such as subsidizing export industries, restricting free trade, taxes, tariffs on imports and to limit exporting precious raw material.
Although, many economists believe that protectionist policies affect the economic growth and many have consensus on the notion that trade liberalization can cause economic dislocation and losses.
Virtues and disadvantages
The way we earn reflects our culture, in many parts of the world, earning livelihoods also formed the culture. In Sub-continent, harvesting crops become festivals. Many Halloween traditions originated from ancient Celtic harvest festivals. In Philippines, every day of the year has at least one festival dedicated to crops harvesting.
Till the past century, a large portion of things were homegrown, countries produce and consume it their selves. There are less ways of transporting materials to another countries and massive production was not fully familiarized.
After the technological advancement and upgraded, fast and cheap transportation mediums made it easy to sell things in Africa, Latin America or in Eastern Europe in virtually same price. This whole new idea of big markets provided opportunities to earn big and created many rich entrepreneurs along with shaped many new fields and opportunities.
The free markets were allowed in order to build a just world where each and every one is able to acquire his due share. But the whole idea is seem to nosedive drastically. Many see it as the policy of the elite against the collective class of the poor. Consumers are left with no choice when it comes to choosing. Branding, fix prices and monopolies make it impossible for them to pay the right prices.
The monopolies have a very apparent role in this newly emerged phenomenon, when the importer and the producer fetch their profits the consumer simply left with only one option to buy and to buy it in a price they offer, which is higher than the original.
The Neoliberal austerity programs brought prosperity for some and deprived many. A large portion of the world’s population today is deprived of whatever these new free market systems had offered to them. The so-called classic narrative of building an equal society had failed and the human kind is still finding answers on to how to fulfill their needs by working less and paying the right price.