Which economy fits better to the people?
First to do is to understand what a planned and free market economy is.
What is a planned economy?
The planned economy is knows as the command economics, it is similar to communism, but its NOT. When there is a planned economy, the goverment is the one who handles everything, this means that the goverment dictates the production type and leves, even the prices and wages. Resources and incoming money is owned by the state. The goverment has total control over the allocation of resources.
So what are the pros and cons of planned economy?
Pros: Since the money is divided equally between the people, it means that the gap that separates poverty to rich is going to be smaller, because there is income equality. Also, products and goos will be distributed equally, givin everyone affordability of goods and services.
Because the goverment tell what products and goods need to be sold, the allocation of goods will go towards one product, therefore there is a potential to get things done very quickly.
Cons: There is no competition withing the economy. No matter how hard some one works as a doctor, the doctor will earn the same income, services and goods as someone who works as a janitor in a school.
In the planned economy there is less choices for consumers, since the goverment makes decisions of goods and services.
The quality of the goods produced and consumed are unfavorable.
There is lack of freedom and personal gain, since the goverment takes control of everything. The citizens do not own anything, and cannot advance in their profesional carrer.
Generally, a con about planned economy, is that no one understands it.
Also, there is a lowerd standard of living compared to a free market economy. Take as an example the standard living of Chinese citizens and American citizens.
What is a Free Market Economy?
Mostly known as Capitalism. Here there is no goverment intervention, the resources and goods are privatly owned. Everything is privatly owned. In Capitalism there is individual choises of resources and the goods. The Free Market provides a self-fightig system, in which competition is more.
Pros and Cons?
Pros: People are free to make their own choices, no matter on choice of job, goods, resources and services. This is because the goverment has no intervention compared to Planned Economy.
There is a system to produce efficiently and reduce the ammount of resources wasted. Producers gain more money when there is less producs wasted. Consumers will spend their money in ways that maximise satisfacion and divide the income between goods and services.
Cons: Some people arent guaranteed to have a job, making unemployement rise.Because there is too much competition, some people will not have an income, making them poor and increasing gap of rich and poor.
People are not paid the same ammount as others. The wage and income of a bussiness manager will not be the same as a taxi driver, making some people prosper and others suffer.
So, which economy do you think is best?
In my opinion i go for Free Market Economy.
