Capitalism and free market are terms that both refer to an economy where the government takes no part or involvement. Free market and capitalism are not two different systems, but rather different models. Both ideologies share similar roots and ideas, but they can also differ from each other depending on how the government wishes to set up its economical system.
The free market economic system is a market where the price of an item is arranged by the common interest of the sellers and buyers. The supply and demand of an item is not regulated by the government, but controlled by the producer of said item. This is the strongest point of a free market that other economies, such as a command economy, tend to eliminate. Where capitalism and free markets tend to differ is in the type of systems they are. It is true that a free market and capitalism are the same systems, capitalism is a type of economy, while a free market is a market system.
A free market can fit with any type of economy as long as the government is willing to implement it. A capitalist economy would be running under the free market or any other type of market. Economic systems, such as capitalism, determine how capital goods are regulated and how means of productions are owned. For example, in the United States, citizens can start businesses in order to make profit. These citizens are the ones who own the means of production, not the government.
Capitalist economies and free markets can coexist in harmony because they share one important principle: the government has little or no involvement in what is produced, does not own the means of production, and does not regulate supply and demand. A free market and capitalist economy collectively...