No. 25




Liberal or Capitalist Market Economy – That Is the Question

14 June 2014


RiTo No. 25, 2012

International comparative studies mostly define Estonian economic model as free market economy.

Pursuant to the generally accepted conception in research circles, a market is considered free and price fair if the suppliers and buyers are free in making their decisions. This paper introduces one possible view on the method of describing the economic model of a state, and analyses by applying the case study method if the prices in Estonia are fair.

The purpose of the article was to study the differences of liberal and capitalist market economy and their impact on real economy. During the research, clear differences between them became evident, and also the fact that from the viewpoint of continuing economic policy research, adopting multi-dimensional approach would be effective. One possibility could be to implement the concept of social organisation of life. Implementation of multi-dimensional model would reduce confrontations in society and the conflicts caused by them; in the case of one-dimensional model the acceptance of one ideology automatically means confrontation with the opposing ideology.

The article offers one possibility for orienting in the social space, analysing and describing the processes and discussing the rationality of implementing them without direct opposing. It is especially important at the time the world economy is hit by harsher and harsher crises, and the need to develop new bases for economic policy increases.

The most important result of the research, however, was explaining the differences between liberal and capitalist market economy and presenting the relations in a civil society. Considering the importance of cooperative form of entrepreneurship and the International Year of Cooperatives declared by the UN, it is high time to start a public discussion on the subject in Estonia. Economists have a special role in starting this discussion and keeping it going.

Full article in Estonian