Most modern nations have elements of a free market economy but are more correctly characterized as mixed economies. A mixed economy contains elements of command-style government control and spontaneous market order. In a broad historical context, nations of the 20th and 21st centuries are far more free market than any other time in world history.

Evolution of Free Market Economies

The first conscious effort to create a free market economy was in Great Britain between 1760 and 1860. Great Britain's political climate was heavily influenced by protestant emphasis on individualism, the rise of capitalist economics from Adam Smith and John Locke's theories on property rights.

These philosophies also impacted the British colonists who revolted and founded the United States. These initial free market economies also became the first to undergo large-scale industrialization and sustained per capita GDP growth.

Following World War I and World War II, the U.S. and Great Britain both saw pullback from free market ideologies. Nevertheless, the next four-plus decades after WWII served as an ideological battle between mixed capitalist economies in the west and socialist economies in the USSR and China.

After the fantastic failure of command-style economies in Cuba, North Korea, China and the USSR, many of the developing countries in the world elected to attempt western-style free markets. The free market successes of the so-called "Four Asian Tigers" of Hong Kong, Singapore, South Korea and Taiwan further exemplified capitalist growth.

Free Markets in the Modern World

Despite the longer trend toward free markets, most nations have large and growing government influences in economic activities. There are many reasons for this, although economic historian Robert Higgs suggests major crises, such as recessions or wars, are mostly to blame.

Higgs points out that governments ask for more power and influence during crises and never relinquish that control once it is given. In modern society, the U.S. federal government accounts for nearly 40% of total GDP.

According to the Heritage Foundation's 2015 Index of Economic Freedom, the most free national economies in the world are Hong Kong, Singapore, New Zealand, Australia and Switzerland; the U.S. comes in 12th on the list.

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