Market Economy and Its Limits:
In the modern era virtually everywhere the market economy is playing the central role in economy. Though seemingly beneficial, in fact, this system has greatly damaged our society and we must find alternative means for this system. The systems whose foundations and framework were chalked out by Polanyi, still remains little understood in our lives though it occupies immense importance. Simply defining, in market economy the market is at the centre of all the functions and can only exist in Market Societies i.e. where markets determine the social structure.
It is not true that economies cant run without markets, earlier all the economies used to operate on non-market basis. But with the passage of time the market economies took over from societies and replaced the core human principals, torment to the human values.
This economic system that talks about Money, Land and Labor is prone to different disasters from time to time till it finally came to an end in WW2 according to Polanyi and resulted Keynesian theory for labor that was in fact a step to save this system for time being which lasted for 30 years almost but it again revitalized it self and led to current disaster. This system uses violence either natural or created and uses illusions to portray sufferings and disasters as development.
Comparison of Market System from Social System:
As Polanyi argued previously to our time, no society has ever existed that, even in principal, was not controlled by the market. But this argument is against the traditional wisdom of Adam Smiths barter, track and trade. A strong argument in this regard is that the activity in market economy can not be achieved by the commodity money that existed in the earlier times as market economy focuses on the growth i.e. inflation for its sustainability as against deflation threat and inflexible money supply offered by the commodity money standard. But market system was not able to rule out commodity money as it was the only alternative available for international trade as against fiat money. But within the economies it has achieved great success.
Basis and development of market economy:
The structure of market economy as pointed by Polanyi is dependent upon three factors.
 Money.
 Land.
 Labor.
It is one of the characteristics of market economy that it hostilely takes over social economies that is the case proven in the course of history. What this new system did is that it hampered the Social system that had characteristics of low GNP but no concept of poverty as the distribution of wealth was fair and there was a strong social infrastructure to ensure the flow of resources from wealthy to poor.
But for the market economy, it needed labor for running its factories and production and it was only possible when the people with low resources were deprived off and made desperate to sell themselves against wages. The process started in England with the concept of Pareto Optimality i.e. sacredness of private property and as rich people started occupying the land.
As a result, a large number of people living on these lands were either displaced or lost their livelihood that they used to get by using those lands. As a result the concept of poverty evolved and to further promote this system it was given backing by ideology that for smooth functioning of markets excess labor is required and that can be achieved by depriving the poor from all resources.
 Ricardo said, If we help the poor, the society will be at loss
 Pittsburg said, If we showed pity towards the poor, system will not work
 Theory of markets suggest that any intervention i.e. subsidies will distort the market and benefits of free markets will be lost
History, aftermaths and working of market capitalism:
Founded in England 50 years before the industrial revolution, when it achieved its objectives i.e. excess productivity via excess labor. It entered into the second phase i.e. to sell that produce. For this, it adopted the concept of free trade and England started to export its excess production to the Europe and US. Soon these countries realized that these countries were at loss because of the free trade that was destroying their own industries. So they developed protectionist policies to develop their own industrial base. As a result, England and other countries following the market structure started colonization in order to sell off their commodities that not only jeopardized the independence of colonized countries but also stopped industrial development in those countries. The economic power vested in the market economies helped them to exploit the others which ultimately led to WW2 in which Japan was forced to surrender on free trade!
This kind of aftermath led to some adjustment meant to save the system from global unacceptability. JM Keynes introduced his labor theory where Govt was urged to intervene in the labor market to lower unemployment. This theory held up till stagflation of 1970s when it was assumed that the 1930 recession was not a result of the market system rather is was due to administrative lapses on the part of Govt. So the system was revitalized and creating a series of other crises it finally led to another global recession in 2008.
The system recognizes Money is the ultimate objective of all human activates.
This system measures human being on the bases of its earning stream generated through its life.
Value of Human Being = Discounted cash flows generated
This philosophy leads to a serious implication that people who do not posses the means to create money dont posses any value what so ever in the society or effectively dont deserve to be a part of society, a route cause that leads to all the social evils.
Conclusion:
After stating all the above facts. We come to a conclusion that the capitalism only promotes greed, hunger and disparity as development and progress and as Muslims we should do our best to promote welfare culture in our society for the improvement of above issues.
