turumajandusi

Turumajandus, also known as a market economy, is an economic system characterized by the decentralized decision-making of economic agents. In a market economy, the production, distribution, and prices of goods and services are primarily determined by the forces of supply and demand, rather than by central planning or government regulation. This means that individual consumers and producers, acting in their own self-interest, make the vast majority of economic choices.

Key features of a turumajandus include private ownership of the means of production, freedom of enterprise, and competition. Private individuals and firms own land, capital, and other resources, and they are generally free to use them to produce whatever goods and services they believe will be profitable. Competition among producers is encouraged, as it is believed to lead to greater efficiency, innovation, and lower prices for consumers. Consumers, in turn, have the freedom to choose which goods and services to purchase.

While the concept of a pure turumajandus is largely theoretical, most modern economies incorporate elements of market mechanisms alongside some degree of government intervention. This mixed economy approach aims to balance the efficiency and dynamism of markets with the need for social welfare, environmental protection, and economic stability. The role of government in a turumajandus can include enforcing contracts, protecting property rights, providing public goods, and addressing market failures such as monopolies or externalities. The degree of government involvement varies significantly across different countries.