Planned Economies, also known as Centrally Planned
Economies is and economic system which decisions are controlled by the
government, this means they are responsible to dictate the production type and
levels, the prices and wages. It is the government whom is in charge of the
economic problem. The resources are fully owned and controlled by state-owned
enterprises.
Currently there are only three countries, which
develop this type of economy.
There are numerous benefits as well as immense
quantities of flaws within this type of economy use in a country. This is
specifically designed to help the citizens have economic equality because of
the fact that it is the government who controls the resources therefore every
single individual will benefit economically in the same level, as well as Planned
Economies are designed so absolutely everyone gets a job education and
healthcare, therefore unemployment does not exist and you are guaranteed
certain standard of life,
All the factors above provide the country an
opportunity to obtain the basic needs for everyone in it, so basically poverty
is not a factor.
Nonetheless the fact that the government is in charge
and owns the resources of production disables the citizens to gain economic independence;
therefore the standard of life does not grow as fast. It takes a way the
possibility for the individual to obtain infinite financial progress.
Individual studying, work and innovation efforts are
not taken into account, so workers are not benefited economically for their
hard work and effort.
Free Market Economies are handled by private
enterprises; therefore the government has no control over them and resources of
production are privately owned.
Subsequently to the inexistence of government
intervention over this enterprises, it is the individual whom provides the
demand and supply wage. This means that the citizen’s decide their best
interest; making it a free market.
In contrary to Planned Economies, Free Market
Economies also known as Capitalism, does reward the individual’s achievements.
The harder one works and progresses, helping and innovating, the better the
economic reward would be. Therefore the standard of life within a country with
this type of economy will rapidly increase. Also it is the same individual,
which chooses for itself their “best interest”
Nevertheless, because of the lack of government
intervention it basically transforms into “every man for itself” so certain
standard of living is not guaranteed meaning that government does not assure
anything. The individual isn’t guaranteed neither a job, nor education or even
healthcare, you are responsible for those yourself, resolving in huge economic
and standard of living inequality.
Personally I can conclude that overall I prefer much
more Free Market Economies because it encourages society to progress through
hard work and innovation. The fact that nothing is guaranteed it determines
society to progress in order to survive. A more knowledgeable society will
exist because of the on-going pressure to overpass and exceed expectations work
wise, only benefiting ourselves. The
more economic resources a better standard of living is presented, therefore if
a big number of individuals are presented with it the better quality of life
would be.
Inequality is a factor needed for supremacy, this
means that the rich need of the poor to produce and work hard, this way a
country can maintain itself, but at the same time the hard work coming from the
poor would lead them out of poverty or out of low economic resources.
Also because the government has no power or intervention
over these private enterprises, anyone has the opportunity to gain big economic
rewards not just a few lucky people, members of the government that promote
corruption.
