Economics Current Event Essay
The first ever use of the phrase “command economy’ was to describe that of the Nazi economic system. Though, the first successful communist system, or “command economy’ was that of the Soviet Union (1922-1991). The Soviet Union’s way of dividing pay equally among all working citizens began to butt heads with the U. S. ‘s capitalistic, market system. Immediately after the end of World War II came the start of the Cold War.
The United States, was out to stop all further spread of communism, but the Soviet Union was out to further increase its political and economic ideology. The key preferences between a command system and a market system are defined by what goods and services will be produced, how they will be produced, and who will consume them. There are both positives and negatives in both systems. A command system is defined as “a system where the government, rather than the free market, determines what goods should be produced, how much should be produced and the price at which the goods will be offered for sale. Due to no incentive to make profit, there is little innovation and a lack of quality in goods and services produced. Though, within
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An economy that uses a command system can quickly mobile resources to produce whatever the economy needs. In a market system, society’s wants determined what’s produced and how resources are allocated. A benefit of a market system is the private ownership of land, unlike in a command system where all land is owned by the government and distributed out. This creates incentive for landowners to take care of and maintain the land they own. Two aspects of market systems are freedom of enterprise and freedom of choice.
Freedom of enterprise ensures that entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice of goods and services, and sell them in chosen markets. Freedom of choice enables owners of businesses to employ or dispose of their property and money as they see fit. This all contributes to competition, a key part of all market system, which enables buyers to buy the best good for the lowest price. A downside of a market system is the inability to allocate resources quickly to solve economic shifts and changes.
There are both positives and negatives to both economic systems. I think there is no greater system to live in, or one that outranks the other. If I had to choose one to live in I would live in one that has a combination of both systems, known as a mixed system. This is the same as the United States, it combines command system aspects, such as public education and transportation, and market system with economic freedom, including choice, enterprise, and property. Economics Current Event By huntresses