An essay on which economy is the better choice.
By Kiros Johnson
An economy, as defined by dictionary.com, is the management of resources of a country with a view to its productivity. There are multiple economies in this world, all of which think they are better than the other. It’s almost as if the economies are political parties fighting over a piece of land. However, economies vary among all. The writer will now describe two economies and contrast them and try to shed light on which is the preferred economy.
According to Russell Kirk, writer of the A Beka book Economics: from the
Christian perspective, a free market economy is an economy where the market is free to operate based on the forces of “Supply”, “Demand”, and “Competition.” Many economies are actually a mix, including the United Kingdom and South Korea. These countries are open to the idea of free market economies, but also have to involve some government action. There are two economies being discussed in this research paper and the other is command economy. Command economy, often called planned economy, controls all ways of production; the government decides what products will be made and sold at what price. Examples of this economy are General Mao’s “Great Leap Forward” and Stalin’s Five Year Plans.
To decide which government is better one must look at the differences of the two; as well as, one must know something about each economy. so to decide we must first mark the good and bad things of each and decide from there. First, we shall view the pros of the free market, capitalist, economy. To begin, the pros of capitalism are largely due to gains from international trade and national efficiency through competition and consumer market signals. Meaning buyers are free to purchase whatever they want from whichever company they want in any amount. Being so, producers are able to take the risks and rewards that come with the increase or decrease of the product the consumers are buying. There is no government interference with the functions of the forces of the market. The largest advantage that a market economy has is that the setting of a unique price is determined by the demand and supply without monopolistic or many oligopolistic influences. The decisions of what to produce, who to produce to, and how much is being produced is taken by the forces of the market not by the central government. The market system is based on the idea that everyone involved acts in his own best interest. This means producers seeking the highest profit to maximize their interest, and consumers bettering their interests by searching for the best quality product for the lowest price. From these conflicting interests arises the actual price as if, in the words of adam smith, guided by an “invisible hand.”
In contrast, under a command economy, Marxism, governments own all of the factors of production such as land, capital and resources, and government officials determine when, where and how much is produced at any one time. This is also sometimes referred to as a "planned economy." The most famous contemporary example of a command economy was that of the former Soviet Union, which operated under a
Communist dictatorship. Since decisionmaking is centralized in a