Command Economy Vs. Command Economies
A countries decision of whether to follow a command or market economy has significant influences on the countries potential and its people. A market economy is one that gives the people the freedom to shape the economy. Countries that have a market economy include the USA, Canada, and UAE. Command economy on the other hand, does the opposite where the government has full control on the economy. The USSR and North Korea both have a Command economy. Both of these types of economies have social goals and strive to benefit the country in different ways. Both Command and Market economies have their advantages over the other. A market economy, for example, gives the population a tremendous amount of freedom compared to a command economy. One of
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Although a market economy has great economic growth, it lacks economic stability. Being economically stable means having stable prices and minimal inflation or deflation. Since prices are determined by consumers and producers, the value and prices of products can dramatically change because of the preferences of the people. This can cause prices to peak dangerously high or fall unfavorable low. The market economy offers luxuries, however. only people who can offered it receive it. People who are homeless would unlikely escape poverty. They can struggle to survive even in a developed and rich country. Additionally, a market economy has large income gaps. There can be billionaires, such as Donald trump, who lives an extravagant lifestyle living right next to citizens who struggle to make a living. Command economies too have their disadvantage. The most obvious disadvantage would be economic freedom. Command economies focus on fulfilling everyone needs, not their wants. This causes countries such as North Korea spending the majority of their money on food rather than entertainment. Command economies lack incentives as well since it is a trade off from focusing on equity. Since they are giving everyone the same salary, a student would not feel motivated to become educated and fulfill a difficult job. Command economies might not be efficient in their productions. Since all productions are
Although a market economy has great economic growth, it lacks economic stability. Being economically stable means having stable prices and minimal inflation or deflation. Since prices are determined by consumers and producers, the value and prices of products can dramatically change because of the preferences of the people. This can cause prices to peak dangerously high or fall unfavorable low. The market economy offers luxuries, however. only people who can offered it receive it. People who are homeless would unlikely escape poverty. They can struggle to survive even in a developed and rich country. Additionally, a market economy has large income gaps. There can be billionaires, such as Donald trump, who lives an extravagant lifestyle living right next to citizens who struggle to make a living. Command economies too have their disadvantage. The most obvious disadvantage would be economic freedom. Command economies focus on fulfilling everyone needs, not their wants. This causes countries such as North Korea spending the majority of their money on food rather than entertainment. Command economies lack incentives as well since it is a trade off from focusing on equity. Since they are giving everyone the same salary, a student would not feel motivated to become educated and fulfill a difficult job. Command economies might not be efficient in their productions. Since all productions are