V1's market was an open system, while V2's is a closed system. The market had infinite money, and always bought all production. The market then held them in big stockpiles until people wanted to buy them. Pops and factories drew their raw materials from the government's own stockpiles, too.
This had a number of advantages; it essentially acted as a middle-man, which is a desirable aspect of the system (though wealthy 'merchant' pops could perform the same role if provided with a factory-like stockpile). It also meant that there was never a danger of the game running out of money (a constant problem in V2, where cash growth can never keep up with industrial expansion, causing liquidity crunches; a relatively straight-forward fractional reserve banking system can cover that, though). Money can also be used as a resource under such a system, while in V2 any money the player has on hand is automatically bad for the economy as a whole (since if it's in your pocket, it can't be spent by the population). Oh, and the whole thing is massively easier to balance and script than the V2 economy, which is so hilariously complex that any approach to balancing is largely a matter of sticking random numbers in and running the sim to see what happens (I'd guess this is largely why Johan would prefer to do away with a V2-style WM).
The downsides include that it's pretty immersion-breaking when you understand how the thing works; the market is largely incapable of boom and bust, it can't generate a depression by itself (where V2 was only too prone to doing so), and you can't exercise the same level of macro-control as V2 allowed (since V2 is a closed, zero-sum market, you can do a number of pretty awesome manipulations if you understand what you're doing; this simply cannot be done in V1's non-closed system). Also, the nature of the market meant that basically all economic systems in V1 were state capitalist in practice. Besides this, the many armchair economists who love V2 find any deviation from a 'pure' system to be marginally offensive (despite there being no agreement between us all on what a 'pure' system actually is).
Anyway, we shouldn't read too much into Johan's statement - a direct, 100% return to V1 economics would be largely impossible with most of the other elements in V2 (unemployment, automatic promo/demo etc), and I doubt he'd want to revisit it too closely anyway (I remember at least one interview where he described Vicky 1 as impossible for the player to understand and riddled with mistakes).
