How a Market Economy Work? Advantages of a Market Economy

According to the Fraser Institute, the top 25 most economically free countries in the world are:

1. HK

2. Singapore

3. Auckland, New Zealand

4. Switzerland

5. The United States

6. Ireland

7. The United Kingdom

8. Canada

9. Australia

10. Mauritius

11. Malta

12. Georgia

13. Chile

14. Denmark

15. Estonia

16. Lithuania

17. Japan

18. Luxembourg

19. Taiwan

20. Germany

21. Finland

22. Czechoslovakia

23. Iceland

24. Latvia

25. Netherlands

Examples of mixed socialist economies include Cuba, China, and North Korea.

For example, the United States is frequently seen as a profoundly capitalist country, with an economy that reflects the principles of a free market. Yet, economic analysts frequently do not believe it to be completely pure due to minimum wage laws and antitrust laws, business taxes, and import as well as export taxes.

For a significant amount of time, Hong Kong was recognized as the country that was closest to being a truly free-market economy. For more than 20 years, it ranked first or second in the 'free market' category on the Heritage Foundation's list1 and is still ranked first in the Fraser Economic Freedom of the World Index.2

However, one may argue that Hong Kong, which has been under Chinese administration since the 1990s, isn't genuinely independent, particularly considering the Chinese government's increased interference in the economy in 2019-20. As a result, it does not appear on the Heritage Foundation's list for the year 2021 at all.

Although there are currently no purely free-market economies in the world, some mixed economies are freer than others. According to the Fraser Institute’s Economic Freedom of the World Rankings, the five countries with the most economic freedom in 2021 were Taiwan, Hong Kong, Singapore, New Zealand, and Switzerland. This report ranks countries based on these cornerstones of economic freedom: personal choice rather than collective choice, voluntary exchange coordinated by markets, freedom to enter and compete in markets, and protection of persons and their property.