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

Free Trade V.S. Command Economy===============================IntroductionPoliticians, countries and ideologies from all over the world have foryears been torn surrounded by what they should follow and believe. Countriesquarrel over which policies should be adopted and what, how, for whomhave been the economists fundamental question.Adam Smith pr separatelyed for market economies practically referring to theinvisible handKarl Marx preached for command economies often referring to Theproletariat will over direct 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 to fuse 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 antithetic from eachother, but in actual fact they are very equivalent.They both wanted to change the w ay their societies ran things. Resource allocation Resource will power Type of incentives Level of government decision makingThe 2 major economic governing bodys 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 call down 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 supply 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 fromMoscow this was no longer possible.The transition in 1991 was less(prenominal) difficult for Poland because theyalready used market forces in agriculture.The USSR succeeded in sending the first man in space during communistruleIn Russia investment and business were failing to settle because ofthe old bureaucratic system still in place, as the example goes (Itshard to teach an old dog unsanded 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.