A Free Market Economy Is Better Than Command Economy Essay

A Free-market economy is better than Command economy Free-market and Command economy are the two-major economy system. It has sparked years of controversies among individuals over which system is better. However, no agreement has been reached. Meanwhile, it is obvious that free-market economy predominates all around the world as the majority of countries are following an economy which free-market process the dominating position. The significant difference between is whether government intervention of economy exists. For command economy, the state has the right for all economy decisions, including planning and adjusting. Properties are owned by the government. The other extreme situation is the free-market economy, where the government do not place any intervention. However pure command economy as well as free-market economy do not exist in the world that is also agreed by Samuelson (2010). Throughout the world, free-market economy functions are much more popular as it is the fundamental of capitalism. As the majority of the world economies are mixed economy, the features of command economy cannot be ignored. This essay tends to distinguish the difference between two extreme economies from economic prospects as well as politic prospects which are inseparable. Economic prospects are divided into three parts. The first part is about economic growth. In command economy, the government planned the demand and supply as well as resources distributions, which makes it easierShow MoreRelatedThe Theory Of Economics As A Science1182 Words   |  5 PagesThe economy born since the man realizes that he cannot get everything he wants. The economists analyse the economic problems as it happens, without adding their feelings, thoughts or them owns assumptions. Economics is based essentially in scarcity, if there is not shortage there would be no need of Economics as a science. As there are limited resources choices have to be made in order to allocate resources and factor of productions. According to Anderton (2008:30) when this allocation happens, resultsRead MoreHow A Market Economy Is An Economy1696 Words   |  7 PagesA market economy is an economy in which decisions regarding investment production and distribution are based on supply and demand, and prices of goods and services are determined in a free price system. (Alvather, 1993) Market economies may be practical, but they also rest upon the fundamental principle of individual freedom: freedom as a consumer to choose among competing products and services; freedom as a producer to start or expand a business and share its risks and rewards; freedom as a workerRead MoreThe Four Main Economic Systems and Their Application in South Africa1426 Words   |  6 Pagesfour main economic systems are: Traditional, Command, Market and Mixed South Africa has come a long way since the days of apartheid, from being a country living within sanctions to evolving to a mixed economy. It has become too diverse that citizens are liberated into certain economic activities of their choice. Everyone is entitled to their own private freedom, combined with centralized with economic planning and government regulation. Traditional Economy The traditional system is based on ancientRead MoreExplain how resources are allocated in reference to the different economic systems?1686 Words   |  7 Pagesare: the free market system in which the role for the government is limited and the planned system where the government takes viturally total control. In both of these systmes there are different methods of resource allocation used. There are economies that use a mixture of these systems in particular the planned and free market system also known as the mixed economy in which some of the decisions resource allocation are done by the government and other by the public. In a free market economy: *TheRead MoreBenefits Of A Country Moving From A Economic Economy1017 Words   |  5 Pageswhich a country moving from a centrally planned economy to a more market driven economy is in the interest of both consumers and producers†. A transitional economy is an economy which has previously had a centrally planned economic system of resource allocation and is now allowing market forces, such as demand, supply, price and free enterprise to operate in at least parts of the economy. A centrally planned economy, that is also called command economy, is an economic system in where the country’sRead MoreEconomic Systems And The Economic System808 Words   |  4 Pagesways to run economies, however, they all fall under four general categories: free market, centrally planned, traditional, and mixed. To better understand why societies must choose one of these systems, we must proceed deeper into detail on how these economies function. The oldest and simplest of the economic systems is the traditional economy. It relies on habit, custom, or ritual to answer the three key economic questions. Due to the unembellished nature of the traditional economy, there is littleRead MoreEquilibrium Price and Quantity, Economic Systems; Cross-Price Elasticity of Demand (Cped); Iv) Income Elasticity of Demand (Ieod);1468 Words   |  6 Pagesmeet when the quantity demanded by the customer (market demand) and the quantity that the companies (suppliers) are willing to supply the goods/services. For example if you take a look at this graph you can see that at the cross section, where the lines of supply and demand meet, the equilibrium point is shown. This is the â€Å"market clearing price† where supply equals demand. Equilibrium Point; Equilibrium Point; Figure 1-Sourced from Bized Market clearing price is used as a justification to whatRead MoreThe Business World Is More Challenging1584 Words   |  7 Pagesoperating must be given preference as well as the risk the business is having in the current time being. 1 Task-2 1.1 How the different economic system affects the effective allocation of the resources Command economy: At first we will discuss regarding the command economy. Actually command economy refers to any such type of economic system where the government holds the authority of the major decisions such as how much to be produced, the price quotation for the produced goods and the quality ofRead MoreDifference Between Command Economy And Free Market Economy1617 Words   |  7 Pagesmajor difference between command economy and free market economy is the degree of government intervention and the reliance of market to determine prices (Cherunilam, 2009). Command market is the system in which the market is centrally controlled and regulated by the government; free market economy is the system demand and supply determine the market prices and regulations. However, mixed economy is a combination of Command and Free market economy (Bogolib, 2013); the market price is determined byRead MoreSocialism - The Best Economic System Essay1461 Words   |  6 PagesToday, more than ever, th ere is great debate over politics and which economic system works the best. How needs and wants should be allocated, and who should do the allocating, is one of the most highly debated topics in our current society. Be it communist dictators defending a command economy, free market conservatives defending a market economy, or European liberals defending socialism, everyone has an opinion. While all systems have flaws and merits, it must be decided which system is the best