Free Trade V.S. Command Economy Essay -- Economics

Free Trade V.S. Command Economy===============================IntroductionPoliticians, countries and ideologies from all over the world learn for historic period been torn between what they should follow and believe. Countriesquarrel over which policies should be adopted and what, how, for whomhave been the economists funda mental question.Adam Smith preached for market economies often referring to theinvisible bowl overKarl Marx preached for command economies often referring to Theproletariat will over run the capitalist classThese two men have substantially shaped the way countries have decidedto run their economies. Not forgetting the names of a great deal ofotherTheir works were published in volumes, therefore I will not attempt tointegrate any of their work in this project, but instead I will referto some of their ideologies.One would think that these two men were totally different from eachother, but in actual fact they are in truth similar.They both wanted to change the way their societies ran things. Resource storage allocation Resource ownership Type of incentives Level of government decision makingThe 2 major economic dodgings are market and MarxistThe first is capitalism an economic system characterised by privateownership of the factors of production, market allocation ofresources, use of economic incentives, decentralised decision making.E.g.(the US adopts an economic system very much similar to the oneabove but does have some forms of state intervention like the Defence)The second is planned socialism an economic system characterised bystate ownership of the factors of production, the use of moral,resource allocation and economic plan and central... ... thus queues for staple food werelengthening and demand was soaring. For most commodities planning haddropped because inter-trading with the USSR had also ceased. Theseex-communist countries were each specialised in supply certainresources (i.e. iron, coal) but after the break of control from Moscow this was no longer possible.The transit in 1991 was less difficult for Poland because theyalready used market forces in agriculture.The USSR succeeded in sending the first man in space during communist recoverIn Russia investment and business were failing to settle because ofthe honest-to-god bureaucratic system still in place, as the example goes (Itshard to teach an old dog new tricks).Another example of failure was that of Military expenditure,production fell, as well as space research, the two earlier accountingfor 20% of the GDP in the USSR.