If your civilization has been focusing mainly on trade, Market Economy will help you catch up in the technological and civic races. If your civilization has been focusing on a combination of trade and scientific or cultural development, Market Economy will help you remain at or near the forefront of the race in the final eras of the game. Either way, if you have a lot of Trade Routes running, you'll want to adopt this policy as soon as it's available and make sure it stays in one of your government's Economic slots.
Whereas for several centuries laissez-faire economics operated, by the mid-19th Century such free-wheeling markets faced – for a variety of reasons – opposition; governments in the industrializing countries intervened on the behalf of workers and the general populace, enacting factory standards and consumer protection laws and breaking up monopolies. Arose “market economies,” in which purchase and production of goods are based on principles of supply and demand. Market economies can range from regulated markets to various forms of state interventionist models. In reality, neither market economies nor free markets exist in “pure” form, since throughout the 20th Century, governments regulated most businesses to varying degrees.