There are two main known types of economies, which are planning economies and also free market economies. Both of these both have their positive but also negative effects for ruling a country.
In the “Planned Economy” it’s something that has commands and is centrally planned. All of the planned economies is handled by the government. The government dictates production levels, how much they’re going to pay the workers, how much people are going to pay for the product they’re buying, they try to make everything for the better interest for the people. All the resources are owned by the state, this kind of economy is efficient because only one person has power for decisions that are going to be made. About ⅓ of the world has planned economies, including North Korea, Cuba and Laus. Most people tend to confuse planned economies with communism, however communism is more political.
In the “Free Market Economy” or otherwise known as “Capitalism” it’s a private Enterprise Economy. Everything is privately owned, and handled privately. This also forces demand and supply which dictate production type, levels and also all the price wages. Since this is individually based, the leader of the company decides on how they’re going to make money and also how they’re going to wisely use their resources. The word “free- market” it’s a self righting system meaning that everyone gets what they want with no government intervention.
Even though in reality, the majority of the world has mixed economies, which both of them have a mixed of free-market and planned economic characteristics. Countries such as China have a higher proportion of planned input compared to countries such as the U.S.A.
In my opinion I believe that a planned economy is more efficient because that way people are earning money without the risk of losing their whole company. In capitalism each person is responsible for their own company, and yes every though people get what they ask for, planned economies seem a lot less chaotic to me. Since it’s all up to the government, it might not be fair, but there are less chances of losing your job. Also with planned economies you are able to limit on your working hours, while making a good amount of money.
Although your opinion is valid, I disagree that a planned economy is better. Most countries that have had planned economies have since integrated free market tactics, giving a great example that a free market is more efficient. Some countries have done well in the beginning with a planned economy, like China and Russia. However, those countries now have mixed economies because a purely planned economy was not very effective. I do agree with you that a free market is chaotic, but in my opinion, it is the better of the two.
ReplyDeleteI also have a leniency towards planned economics,as well, it's more humanitarian and it looks after everyone, I like how you plot your ideas, but don't forget to put your sources.
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