Final answer:
The reason there has been an increase in freer markets since 1989 is due to the realization that economic growth is directly related to economic freedom. This has been seen in countries that moved from central planning to market socialism, which resulted in significant economic growth and improvements in standards of living.
Step-by-step explanation:
Since 1989, there has been an increase in freer markets around the world. One of the main reasons has been the realization by many countries that economic growth is directly related to economic freedom. Countries that transitioned from central planning to market socialism allowed market forces to dictate prices and fostered private ownership. This shift has contributed to economic growth compared to stagnation under centrally planned economies.
Market-oriented economic reforms have been instrumental in increasing the standard of living for billions around the world, with notable growth in various regions. Uncertainties and debates around the tradeoff between equity and efficiency persist; however, freer markets tend to promote efficiency and growth over equity. Governments still intervene in market systems to correct for market failures and to manage the fluctuations of the business cycle.
It is evident that introducing free market principles into an economy allows for more dynamic interactions between producers, consumers, and financial systems, challenging the notion that government-controlled economies are the best path to progress.