Neoclassical economic theories have become a dominating framework, which has had an effect on the approaches used by the government of different countries. Based on the premises of this theoretical paradigm, the market reaches equilibrium when the needs of sellers and buyers are balanced. This condition is seen as the social optimum that can theoretically be reached, but it has never been attained so far. Neoliberal economists believe that demand is the driving force of price development, so equilibrium is possible since companies try to produce goods and services that will be bought. Likewise, people are ready to pay more if they place a high value on the products or some of their attributes.
At that, some believe that equilibrium will never be achieved without a regulator, the role often performed by the government. It is believed that the regulator can undertake some measures (such as stimulating incentives, lower taxation, subsidies, pricing restrictions, and many others) to boost production and demand. Nevertheless, substantial control over markets has proved to be ineffective in many countries, including communist states with their economic models.
The opponents of free markets emphasize that the 2008 financial crisis suggests that some areas need regulation as consumers have inadequate expectations, which leads to serious economic issues for some businesses or even the global economy. Although some measures of control can be used in some areas and at certain periods, any regulatory incentives should be minimal as the market can be balanced, to the appropriate extent, on its own.
