Let’s Talk About Which Economy Is Better
4:26 AM
Last Monday in my Economy
class, we were asked to choose between Market Economy and Command Economy. I’m
for Mixed Economy but we were only asked to choose between Market and Command
Economy. So, let me define first what are Market Economy and Command Economy.
According to my research, what to produce by the Market Economy is determined
by the consumer’s preferences. And how to produce is determined by the
producer’s seeking profits while for who to produce the goods is determined by
the purchasing power. In Command Economy, what to produce is determined by the
government’s preferences and how to produce is determined by the government and
their employees. While for whom to produce the goods is also determined by the
government’s preferences as well. So if I have to choose between Market Economy
and Command Economy, I would rather choose Market Economy. Why? Here are some
of my reasons.
First,
incentives to work are high because workers benefit themselves unlike in
Command Economy wherein the incentives to work are low because the distribution
is set by the government. Second, people in Market Economy have their own
property or private ownership of property unlike in Command Economy the
government most likely own the place itself. Third, is that in Command Economy,
people have their own freedom of choice. They are free to choose how to manage
their business properly and efficiently and the market is quick to adapt to
changes that may happen because in Command Economy, the government are the ones
who take charge of almost everything. People don’t have their own freedom
because of government’s limits so tendency is that it can have mis-allocation of
resources and reduction or even elimination of personal choice.
If
we have Market Economy, people become more competitive. With that, productivity
and allocation of resources will be efficient. People who will consume the
goods will be the ones to decide what to produce that’s why people in the
market gets to plan more likely correct in making decisions in economy. The
firms will have their own choice in preparing what will the consumers need or
want to buy. That’s why if people are free of their own, without much control
of the government there will be no restrictions on what the firms can produce.
They have their own choice so the tendency is that there will be a much larger
choice of goods and services in the Market Economy compared to the Command
Economy. Another thing is that in Command Economy, people get to be more
creative because of the competition between firms. Firms will likely be looking
to produce something new so that they would be ahead of their competitors.
Firms may produce goods that are new, and better in terms of quality. With all
these things, surely the economic growth will be higher. That's why I chose Market Economy than Command Economy.
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