Market Economy vs Equality Economy

4 min readJul 12, 2022


In a market economy, market competition is the ultimate allocator of scarce resources for the production of products and services that the consuming side (government, business and people) demand.

Is it fair? No. Some will get more than others. Market economy is not about everyone getting the same or equivalent portion. Market economy is not about “who” are the most deserving people to have those resources allocated.

Is it efficient? Sometimes, but when it is not, further market competition will correct the inefficiency. The outcome is usually the most cost effective use of resources to generate the most profitable products and services that the consumers (government, business and people) want and/or need.

As imperfect as market economy, it is still the best system that has lifted billions of people from poverty and created wealth that the history of humankind has never seen or experienced.

Due to the imperfectness of market economy, many progressive leaders in both the academia and political arenas have been pushing the concept of Equality. It is by no means a new concept. It is just socialism or communism disguised by a nobler face intended for the younger generation as many of them have never experienced the loss of liberty and the economic hardship under socialism or communism.

In a market economy, every individual, business, government has a say to what/where/when/how they want their needs fulfilled. It is the aggregate of those wants and needs that create the various demand and that in turn incentivize the market (business and individuals on the supply side) to compete for the privileges and opportunities to fulfill the various demand.

Not all demands will be treated the same by the market. Some demands will not be fulfilled due to lack of available technology, high cost of production or distribution, high opportunity cost etc. Some demand will have many suppliers competing for the same market, driving price lower and quality higher benefiting the consumers (people, business and government).

The competition for market share and profits among the various business suppliers will force them to seek the best way to allocate scarce resources. Those business suppliers who are less efficient than their competitors will be eliminated leaving the stronger companies to take more of the market share.

And the cycle of supply meeting demand continues in a market economy. Products and services are getting higher and higher quality while prices continues to go down. Many once unaffordable products like air conditioners, cars, EV, Big Screen TV, computers, laptops, cell phones, air travel, hotel stays, on-demand transportation, on-demand music etc., are now common place. Many life threatening diseases have met with medical innovations that were only in Sci-Fi story books not that long ago.

Equality on the other hand, is a concept that attempts to guarantee equal allocation of scarce resources to everyone. On the surface, it looks fair. For example, why not let everyone who wants a house to have a house?

For everyone to have a house, that means there must be enough resources allocated to build houses for everyone. Those resources include land, building materials, machinery, human labors skilled and unskilled.

Assuming that there is enough scarce resources to build all those houses for people, which is highly improbable, the houses built will all look exactly the same (size, style, amenities etc.) and the location of those houses may or may not be optimal or desired by the inhabitants. Therefore, very few of the actual housing demand could be satisfied even though millions of houses have been built, significantly depleting scarce resources.

For humans, there is never a uniform demand of any one thing. Yes, we all want to have a house. But we don’t all want the same house or the same house at the same location. Without a market economy, houses can be built but demand cannot be fulfilled resulting in a wasteful depletion of scarce resources.

In an Equality economy, scarce resources are allocated not by the market but by some centralized authority. The government, the politicians and their bureaucrats will allocate the scarce resources.

Politicians need two things — money to drive votes and voters that will vote for them. When politicians have the power to allocate scarce resources, that means those people and business that the politicians need to maintain their jobs/power will have the privileges/advantage to get the scarce resources allocated. Therefore, those who can donate significantly will get the allocation of resources and those blocks of voters that the politicians are chasing after will also get the allocation of resources. Everyone else will be out of luck.

Equality economy, with the lack of competition, will not be able to produce higher quality products at competitive prices. Products and services in an Equality economy will not be able to satisfy demand. The net result of an Equality economy is inefficient use of scarce resources to produce goods and services that is of low quality, higher price and yet cannot meet the specifications of the demand.

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Libertarian. I’ve often written about life as a woman, investment, entrepreneurship, and politics. Follow her on Twitter @Celine2019k