The Two Powers Essay

Submitted By universalsandman
Words: 1126
Pages: 5

The Two Powers
In the world of economics two major powerhouses rule, and those are the market based economic system and its polar-opposite the command economic system. These two systems are almost exact opposites in that one, the market-economy, is much more focused on keeping its consumers happy and prepared to buy more. The command economy on the other hand is much more determined centralized leaving the decision making to the few with little to no regard to the consumer only to the goals set before them. Command and Market-based economies vary in many different ways with how they develop their economy, regulate it, and how they see it grow but there are ways in which one could compare them such as the government intervention both experience in the modern world. Command and free market-based economies are the two extremes in economics in which one is completely without intervention and the other is only intervention by the government the gap between them is where modern economies can be found but that does not mean the ideas behind the two are still not felt. The two systems are complete opposites one based on the “invisible hand” the other on the “iron grip” but even though they are on opposite sides of the spectrum similarities between the two still exist.
A free-market economy is one in which the economy is based around the market of two main sources the household and the firms. In this economy nearly all of the country's factors of production are owned privately. It is private individuals, or groups of individuals, who own the resources. They then rent them out to the firms so that they can produce the goods and service and the individuals then get money in return through rent and wages from the factories that the firms set up. This type of economy or at least a form of it exists in the United States today. While a pure market economy would be fairly hard to implement as it requires no government intervention and even the U.S. has a few government regulations its advantages can still be felt inside the United States. With the government regulations aside the U.S. mainly functions as a market based economy with private business both large and small dominating the economy and competing with each other to get the consumer attention needed to make a profit and self-interest. Another staple of the free-market economy is its free-enterprise nature in which the firms can sell anything they want and respond to the demand of consumers without having to worry about too much government regulation. This free nature experienced in a market economy is what makes it the dominating economy in the modern world because it can freely stretch and flex to fit any demand needed by modern-day consumers. On the other hand there is the Command Economy sometimes referred to as the communistic economic system. This term mainly is derived from the fact that one of the longest lasting and most successful of the command economies came out of the former Soviet Union which existed as the largest communist power from 1917-1991. What drives the command economy and the success it experiences is the complete and utter control by the government which in turn decides quotas, production rate, and prices leaving nothing to chance and little innovation. While this economy does leave the consumer out in the cold not allowing them to dictate what they will receive based on demand it does provide excellent job security as since the government decides what runs and how it is run the employee can feel relatively safe in their current employment. What the command economy also thrives at is quantity since the government sets all quotas in the economy and failure to provide the right amount could lead to closure the quotas are almost always meant even if the quality of the product suffers. Command economy mostly occurs in authoritarian governments as its basic principles require complete control by an outside force other than the consumer and this can easily be…