About The Market Economy …
February 6, 2010
Amrita School of Business, Bengaluru
What does globalization mean? What is the role of the state in a market economy? Why are property rights important? What is the rule of law?
Paras Katoch, M.B.A./M.S. student at Amrita’s Bengaluru campus, joined twenty-four other students from around the country for an elaborate discussion on these topics of contemporary interest.
These students were invited to the Bangalore Management Academy (BMA) after being short-listed in a national-level essay competition conducted on the topic, The Market Economy and its Impact on the Global Financial Crisis.
“In the world of desires, everyone has an inclination for required goods and commodities,” Paras had written. “Although our wants are unlimited, the resources available to fulfill them are limited.”
He had defined the market economy. “An economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country’s citizens and businesses and there is little government intervention or central planning.”
In his essay, he had taken on questions such as the following. What is the optimal level of regulation in the economy? Was lack of regulation the cause of the financial crisis in the US in 2007? Is innovation fostered better under a market economy?
“Upon studying the impact, we come to the conclusion that lack of regulation was one of the causes for the financial crisis in the U.S economy last year,” he had written. “No checks were performed by the financial institutions for loan agreements or the status of the customers.”
“Information is coordinated better in the market economy as compared to the highly regulated central planned economic system, wherein the government plays a major role in making decisions. Here interactions between suppliers and buyers are frequent, however failure in understanding the market, led to this crisis.”
“The future of the economy after this downturn probably indicates the rise of a new era of mixed economy, in which most economic decisions will result from the interaction of buyers and sellers in markets, but the government will also play a significant role in allocation of resources. Let’s hope for a bright way ahead.”
At BMA, Paras debated with his peers on more topics of contemporary interest. All participants were judged based on their performance in the essay-writing, presentation, and question-and-answer segments. A three-member jury from industry, media and academics awarded points to the contestants for their style, flow, conviction and language.
Three best presentations were chosen. Paras’s compelling arguments won him the second place in this nation-wide contest. We congratulate him on this achievement.