Title: Free Market Definition
Headings: Free Market
Free Market
What is a Free Market?
Key Takeaways
What are Free Market Economies?
Understanding Free Market
The Free Market's Connection With Capitalism and Individual Liberty
Free Markets and Financial Markets
Common Constraints on the Free Market
Measuring Economic Freedom

Content: Common justifications for politically imposed constraints on free markets include consumer safety, fairness between various advantaged or disadvantaged groups in society, and the provision of public goods. Whatever the outward justification, business firms and other interest groups within society often lobby to shape these constraints in their own favor in a phenomenon known as rent-seeking. When free market behavior is regulated, the scope of the free market is curtailed but usually not eliminated entirely, and voluntary exchanges may still take place within the framework of government regulations. Some exchanges may also take place in violation of government rules and regulations on the so-called " black market ," which may be in some ways considered an underground version of the free market. However, market exchange is still heavily constrained because, on the black market, competition often takes the form of violent conflict between rival groups of producers or consumers as opposed to free market competition or rent-seeking competition via the political system. As a result, in a black market, competitive advantage tends to flow to those who have a relative advantage at violence, so monopolistic or oligopolistic behavior is likely and barriers to entry are high as weaker players are driven out of the market. Measuring Economic Freedom
In order to study the effects of free markets on the economy, economists have devised several well known indexes of economic freedom. These include the Index of Economic Freedom published by the Heritage Foundation and the Economic Freedom of the World and Economic Freedom of North America indexes published by the Fraser Institute, which measure. These indexes include items such as the security of property rights, the burden of regulation, and openness of financial markets, among many other items. Empirical analysis comparing these indexes to various measures of economic growth, development, and standards of living shows overwhelming evidence of a relationship between free markets and material well being across countries.