The downside of this system is the producers coming together and forming a monopoly and charging unreasonably high price. Economists have also for long argued whether essential areas like education, health care, road and rail, defence etc should be allowed as free enterprise. Here is the summary of the second economic choice for the USA. Resources are owned and controlled by individuals Economic decisions are made by individuals competing to earn profits Individual freedom is considered very important Economic decisions are made by the basic principles of supply and demand Profit is the motive for increasing work rather than quotas Also called capitalist economies There are many economic freedoms There is competition among businesses (Bender, 88).
Competition determines price which increase the quality of the product. The fact that people did not interact much with each other because of geographical location (towns were located far from each other) certainly contributed to this choice in the mid XIX century.
PUBLIC (COMMAND): Here the major decisions to the economic questions are made by the government on behalf of the citizens it serves. The power of the government in such decisions varies. The state usually has a planning commission which decides on the allocation of resources, what to produced, what price to charge, what wages to pay etc. This type of a system ensures that everybody enjoys a fair share of the benefits of the economy. Yet it is the government that determines what is fair (Hakim, 43).
The Essay on How People Make Economic Decisions
... mixed economy is where the market and individuals make the economic decisions; however, the government also plays an important part in ... are; people are rational, people respond to economic incentives, and optimal decisions are made at the margin (Hubbard and O’Brien ... as microeconomics; as supply falls, prices rise, and as demand falls, prices fall. The economic systems consist of four basic ...
The government is made of people who are separated from the other non government people, yet it exercises control over them.
On the other hand what goes against the system is the efficiency of a few members of planning commission deciding the needs and wants of all the nation, the state determining, how much wages to pay irrespective of the personal inputs of the individual to the task. Here is the basic outline of what the USA could face if it chose this type of economy: Change can occur relatively easily at a whim of individual government leader There is little individual freedom to argue against the decisions There is no competition Businesses are not run to create a profit Consumers have few choices in the market place (Filippelli, 125).
Factories are concerned with quotas Shortages are common because of poorly run factories and farms The government dictates the job in which you work The government sets the prices of goods and services Examples of command economies: Cuba, North Korea and the People’s Republic of China: Because the early USA had many people from these countries (China, Cuba) in the mid XIX century technically It was possible to create the command economy in the USA. In a command economic system, the main decision maker is the government. No person may independently decide to open and run any kind of business.
The government decides what goods and services are to be produced. And the government sells these goods and services (Bruchey, 38).
The government also decides how the talents and skills of its workers are to be used. For the USA in the 1830 s and 1850 s for the government that would be an almost impossible thing to do. The government would have to spend tremendous resources on keeping track on where each American is and what she / he does. The government would have to have thousands of translators / interpreters to deliver the communist / command message in hundreds of languages to millions of citizen.
The Essay on Our Political System Elderly People
Our Political System Government Institutions and Public Policy By definition, any government is the individuals, institutions, and process that makes and enforces the rules of society. Government has the responsibility to provide for public good, police powers, public services, taxes, and most importantly, to protect the power of the people. If any of the above is not met, it is up to the people ...
Furthermore, it would have to make sure that at a work place, each individual was able to cooperate with another one to make a product rather than stare at each other and speak different language. Furthermore, the majority of the US immigrants moved to the USA to escape their government control and it is unlikely that they would support such control in the new country. In conclusion I would like to note that the traditional economy in the USA could exist for a limited time, while the communist / socialist economy would not last because the US government would not be able to exercise control of the whole country in the 1930 s 1950 s and thus would fail to do what the socialist systems do: to control. Yet still it could adopt another mixed economic system that is currently in place in this country.
This system incorporates elements of both systems (public and free enterprise).
Usually areas are clearly demarcated and there are certain sectors where free enterprise is allowed and these are certain sectors handled by the state in the form of public sectors. This system is designed so as to do away with the inherent disadvantages of a both the kind of economics. In practice, it is planned economy with the varying degrees of state control and this is the only other government-involved alternative the US people of the XIX century would allow.
Bibliography: Hakim, Joy, An Age of Extremes (A History of Us, Vol 8), Prentice Hall, 2002. Filippelli, Ronald, Labor in the USA: A History, McGraw Hill, 2001. Bender, Daniel, Sweatshop USA: The American Sweatshop in Historical and Global Perspective, NY Random House, 2000. Heartye, A.
, USA in the World Economy: Eminent Economists in Interviews With Professor Arnold Heartye, Penguin books, 2001. Kronenwetter, M, Capitalism Vs. Socialism: Economic Policies of the USA and the USSR, Prentice Hall, 2001. Bruchey, American Business History, Penguin books, 2002. Ted low, Richard, Rise of an American Business Corporation (Fundamentals of Pure and Applied Economics Series), McGraw Hill, 2000.
The Essay on Rent Control People Market Government
In theory rent control sounds like a perfect way to help the poor by setting the price ceilings on the rent, but in reality it only will hurt them. In the real world rent controls do not work like most people would expect them to, maybe its because not many people had their lesson in economics. Controls on rent will lead to less efficient allocation of scarce resources, and people at the top of ...
