The Differences between Command Economies and Free Market...

The Differences between Command Economies and Free Market Economies The prime difference between command economies and free market economies is the method used to answer the three central questions of what, for whom, and how? Each of these questions relates to production. In a free market economy, the answers to these questions are decided by the consumer and overseen by a government that practices a laissez-faire economic policy. Production is decided on a supply and demand basis- resulting in a capitalist society. This happens due to the dispersion of wealth throughout an economy, the richest dictating which products should be produced due to their own demands, and the poorest having little†¦show more content†¦This type of economy works in the private sector of business ie. Individual firms. A command economy is an entirely different system in which a central government decides how to answer the three central economic questions. The government would decide what is to be produced, how it is to be priced etc. resulting in a far more communist state. This obviously gives the government a far more autocratic role in their economic policy in contrast to the free market economy. Products are designed with the incentive to meet consumer needs rather than to meet the wants of the richest. This way is far more practical towards ensureing the production of necessary goods. This type of economy works under the public sector- everything is funded and controlled by the central government. Discuss Whether there are Lessons to be Learned Between the Two Systems No economic system will ever work flawlessly so it is undoubtable that these two systems would be able to adapt to become more practical. For one example, in the free market economy, there have often been problems with failure to produce medicines that are seen bt medical companies to be unprofitable but that are ncessary to public health. At this point, it would be wise to adopt a more command economy in which it can be assessed which medicines are needed andShow MoreRelatedDifference Between Command Economy And Free Market Economy1617 Words   |  7 PagesOVERVIEW The major 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 determinedRead MoreA Free Market Economy Is Better Than Command Economy Essay1247 Words   |  5 PagesA 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 interventionRead MoreMarket vs. Command Economy Essay1069 Words   |  5 PagesMarket vs. Command Economy What is the main purpose of the economic system? The main purpose of the economic system is method used to produce and distribute goods and service. The three economic questions are: â€Å"What goods should be produced?† â€Å"How should these goods and services be produced† And â€Å"Who consumes these goods and services?† The characteristic of a market economics is that self-interest is the motivating force in the free market, self regulating market. The interaction of buyers andRead MoreMajor Differences Between A Command Economy And A Market Economy1538 Words   |  7 Pages1.1 Market Economies There are many major differences between a command economy and a market economy. To start out with, a command economy is planned, where the government decides the main economic decisions. Next, a market economy is when individuals are free to make their own decisions as they buy and sell products. So between both economies, the command economy is planned and the market economy is free. In conclusion a command economy and a market economy, are two completely different thingsRead MoreMain Economic Characteristics Of A Free Market Economy1506 Words   |  7 PagesThough there are three different types of economies that exist – free market economy, planned (also known as command) economy, and mixed economy, this essay will focus mainly on free market and planned economies. It will examine the main economic characteristics of each of the two economies and compare how they differ from each other, while in relation to the UK public sector. A free market economy is based on supply and demand and all major economic decisions are made by individual economic agentsRead MoreCultural Differences and Similarities Between France and Germany1352 Words   |  5 PagesA. Cultural Differences/Similarities Both France and Greece are Mediterranean countries in Europe. They are both part of the EU and have a shared Western Civilization heritage. Both have moderately high power distance and uncertainty avoidance. However, France scores much higher for individualism and Greece for masculinity. Hofstede does not outline time horizon for Greece; France scores as a short-term time horizon society. II. Cultural Dimensions There are five dimensions under Hofstede. PowerRead MoreNational Differences in Political Economy1295 Words   |  6 Pages2 National Differences in Political Economy Global Political Economy Global political economy (GPE) is an academic discipline within the social sciences that analyzes international relations in combination with political economy. Political economy is most commonly used to refer to interdisciplinary studies that draw on economics, law, and political science in order to explain how political institutions, the political environment, and the economics mix with each other. 1 Roles of HistoryRead MoreThe Problem Of National Self Reliance Essay1473 Words   |  6 Pagesthat the global economy is already integrated; not perfectly, not in every field, and not even necessarily well. But it seems as if it is already irreversible. So by fighting to preserve protectionist ideas do states inadvertently hurt themselves while pleasing their constituents? Is it too soon to tell? Research shows that command economies grow at a much higher rate than free market economies. However, free market economies have a higher grow ceiling. In other words, command economies grow faster butRead MoreMarket Economy988 Words   |  4 PagesMedicare, the people will be helped and still remain free to purchase and buy what they want. Another disadvantage that is stated is the possibility of economic failure. The economic could fail if there is not enough competition. In a mixed market economy, the government helps prevent monopolies and to ensure competition (Economics, pg 39). Wit h the competition, motivation is created to strive to be successful. The goals that a mixed market economy is trying to accomplish are economic freedom, economicRead MoreEssay On Starting A Business1042 Words   |  5 Pagesmajority ownership, second, the process to start a business can be daunting for someone who does not know how to navigate the tricky business registration process, third Dubai is a tax fee but do not hold a free trade agreement with the U.S. so tariffs can still be raised when engaging in trade between two nations. (http://istizada.com) In Asia I chose Singapore was named the best startup ecosystem in the Asia –Pacific region. It is a thriving business center and is have to the Asian headquarters of major