Over the past century especially, the great debate over whether
free market economies or planned economies results in better results for a
country's economy have been greatly intensified. Each system has advantages and
disadvantages.
In a planned economy, the government manages all resources. The government decided what to produce, how much of it to produce and how to produce it. The government’s goal is to provide services and goods to everyone. Some advantages are that everyone is guaranteed the same standard of life. Prices are controlled therefore everyone can afford to buy goods and services. There is also no unemployment. Some disadvantages are consumers cannot choose what goods and services are produced and some companies can be inefficient due to the lack of profit motive.
In a planned economy, the government manages all resources. The government decided what to produce, how much of it to produce and how to produce it. The government’s goal is to provide services and goods to everyone. Some advantages are that everyone is guaranteed the same standard of life. Prices are controlled therefore everyone can afford to buy goods and services. There is also no unemployment. Some disadvantages are consumers cannot choose what goods and services are produced and some companies can be inefficient due to the lack of profit motive.
In a free market economy the people choose what gets produced
and how it gets produced. The people have the right to own property and start
their own businesses. Some advantages are the consumers have more choice and
what gets produced depends on their demand. People can make as much money as
they please. Industries are more motivated because their goal is to make a
profit. The market corrects itself and keeps the flow of money going. Some
disadvantages are that there is unemployment. Some small businesses could be
overrun by larger businesses and many people could lose their jobs as a result.
Some workers can be given poor working conditions and poor pay because
companies are not regulated as often. A huge inequality in wealth can lead to
the poor revolting just like during the French Revolution.
Most countries have a mixed economy with only three countries
having a planned economy. Personally, I believe that a free market economy is better
as long as it is regulated and kept fair. A free market economy is better
because people can make their own economic choices and can gain a big profit
from taking business risks.
