Market vs Planned Economy Essay Example
When considering the advantages and disadvantages of command and market economies, it may seem like one economic system is better than another, but it all depends on what the viewer deems important. In a market economy, individuals, rather than governments, make the majority of decisions regarding work, consumption, and production. In contrast, a command system is based upon government decision making concerning production, output of goods and services, and use of resources. Both have their good points and their bad, but, each is aimed towards a community that will make use of it. In a market economy, the advantages are normally aimed towards the middle/upper class in a community. The concept of a market economy is to allow people to get through life by themselves. People have the ability to make as much money as they can and do what is in their best interest. The whole system revolves around freedom and private gain where in a planned economy, the system is based upon government control and equality among everyone in a community. The key decisions of what products to produce, how the products are going to be produced, and for whom they are going to be produced are the suppliers prerogative unlike the case of the centralized economy. In a free market, competition is encouraged among businesses to increase efficiency and to allow sellers the freedom to increase or decrease prices according to changing market conditions. Almost always, the demand for a good or service will be met. With government’s little interference in the operation of markets except to mainly protect its property rights, a free market system has it’s downfalls too (enotes.com : economic systems). One major problem in a market economy is that it doesn't always provide the basic needs to everyone in the society. The weak, sick, disabled, and old sometimes have trouble providing for themselves and often slip into poverty. With a market economy, companies are continually being