Berlin Wall: Free Market Economy vs Command Economy
Once described by Horst Köhler, the former president of Germany, as “a edifice of fear”, the Berlin Wall divided East and West Berlin. Commonly referred to as the “Antifascistischer Schutzwall, or antifascist bulwark”, the Berlin Wall separated communist Soviet Union-controlled East Berlin from West Berlin which was controlled by the Allies (History.com). Construction of the wall began in August of 1961 when barbed wire fencing and concrete walls were installed separating the two territories. During the construction process East Berlin strategically built the wall just inside their territory (“Berlin Wall”). Approximately, sixty-six miles of concrete formed the main dividing line when it
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was completed many years later (Dearden). Over the next twenty-eight years the menacing wall would undergo multiple renovations and improvements to prevent people and vehicles from crossing from East Berlin to West Berlin ("Berlin Wall”). The wall would remain in place until November of 1989 after the President of United States, Ronald Reagan, famously declared “Mr. Gorbachev, tear down this Wall!” ("Berlin Wall”). East Berlin constructed the Berlin Wall to accomplish one main task: to prevent more and more people from immigrating to West Berlin (Dearden). After the Second World War, Soviet Union took control of East Berlin and installed a communist government. This change of government produced a poor economical situation for many citizens. Weary of the little economic opportunity that East Berlin provided, many citizens fled to West Berlin which was controlled by the allies, including the United States (Dearden). It is estimated that over 2.5 million people left East Berlin between 1949 and 1961 to pursue the greater standard of living that West Berlin possessed (Dearden). Investopedia defines a free market economy as “any voluntary economic activity so long as it is not controlled by coercive central authorities”. Countries such as the United States of America, Australia, Singapore, and Hong Kong possess free market economies ("Free Market”). Some common characteristics of a free market economy are they lack government regulation, and the price of goods and services is based on supply and demand ("Free Market Wikipedia). Often times in many other economies, government oversight and regulation reign supreme. This results in government setting the price for goods and services and a general feeling of restriction communicated upon the buyer and seller ("Free Market Wikipedia”). A free economy gives much more freedom to buyers and sellers, allowing the power of supply and demand to come into play ("Free Market Wikipedia”). There are many pro’s and con’s to a free market economy.
One advantage of a free market economy is that a free market “ensures the most desired goods and services are produced” (Amadeo). Furthermore, goods and services are produced efficiently because consumers determine demand as opposed to the government (Amadeo). Another advantage of the free market economy is the power to choose for the consumer. Without government limiting the number of sellers and or quantity of goods and services, buyers in a free market economy have the power to buy without fear of over regulation by the government (Amadeo). One negative aspect of the free market is there are “no mechanisms to care for those who are at an inherent competitive disadvantage” …show more content…
(Amadeo). Investopedia defines a command economy as “system where the government, rather than the free market, determines what goods should be produced, how much should be produced and the price at which the goods are offered for sale”.
Countries such as the Soviet Union, North Korea, and Cuba possess command economies (“Examples of Command Economies”). Command economies feature no competition because the government controls and regulates all business ("Command Economy”). Furthermore, command economies focus on maximizing “social welfare” ("Command Economy”). Another key feature of a command economy is the “central plan” which “sets the priorities for the production of all goods and services” (Amadeo).
There are both advantages and disadvantages to a command economy. One advantage to a command economy is they “mobilize economic resources quickly, powerfully, and on a large scale” (Amadeo). Furthermore, command economies are powerful enough to completely change society in order to “conform to the government's vision” (Amadeo). However, there are many disadvantages to a command economy including: a lack of efficiency and a lack of competition
(Amadeo). One of the main reasons the Berlin Wall was built was because of economic issues relating to free market and command economies. The Soviet Union-controlled East Berlin was heavily based upon a command economy, while West Berlin, controlled by the allies, was a free market economy. These distinct differences are apparent in the many first person accounts of people living in East and West Berlin during the Cold War and time of the Berlin Wall. While there was many advantages to living in East Berlin such as good pay and free healthcare, there remained many issues and problems ("Berlin and the Two Germanies."). One of the main problems was the lack of goods and the ability to distribute these goods to the consumer. Many goods were scarcely available because of regulation and government interference ("Berlin and the Two Germanies."). Discouraging innovation, the command economy weighed heavily on citizens of East Berlin. A perfect example of the issues that surround command economies, East Berlin suffered because of the economics decisions made by the Soviet Union. Furthermore life in East Berlin was restricted by the government and the Staatssicherheit or the secret police of Germany ("Berlin and the Two Germanies."). Known as one of the “most effective and repressive intelligence and secret police agencies to have ever existed”, the Staatssicherheit were in charge of enforcing the rules and regulations of East Berlin ("Stasi.") While East Berlin was struggling under the effects of a command economy, West Berlin was key factor in the prosperity of West Germany. Influenced by the allies, West Berlin possessed a free market economy. B.R. Shenoy writes that while East Berlin remains heavily decimated by the bombings, West Berlin has virtually rebuilt all that was originally lost. Shenoy continues by commenting that many of the working class of West Berlin even own their own cars. Acknowledging the rarity of any country’s working class owning a car, Shenoy links the prosperity of the West Berlin to the free market economy that it possesses. Contrasting the people of West and East Berlin, Shenoy says that while the people of West Berlin are generally kind and friendly, the East Berlin people give the feeling of prisoners in a prison camp. Shenoy concludes his observations be denoting the distinct irony that “West Germany has achieved, in less than ten years, more economic well-being for the citizen than Russia had done after 40 years of ruthless regimentation”. The economies of East and West Berlin are a reminder of the effect an economy has on a country and its people. While East Berlin suffered under the command economy of the Soviet Union, West Berlin flourished under the free market economy of the Allies.
In the year 1961, the building of the Berlin Wall called upon disasters in Germany. The United States controlled the west of Berlin while the German Democratic Republic held the East. Being stuck under the rule of day-to-day terror, people from East Berlin were making their way to the West Berlin. West Berlin is a safe spot and a free checkpoint in the middle of terror. To stop the movement of East Berliners, the East German government decided to build a barrier that limited and halted the East Berliners from leaving.
Overall, free market is a necessity if there is to be any forward movement and progression of society. In a controlled system nothing ever changes, and while this can prevent change for the worse, it also stunts change for the better. In free enterprise systems, people with brains and determination, such as Andrew Carnegie, are able to take advantage of new opportunities. While this system will not help individuals float along, and they are liable to sink (into debt and/or remorse), those who have the courage to try will find that success is only a risk
As economies develop and change we need to look at the factors that influence this. Weather, resources, location and labor prices are a few examples of this. Another influence is government policies. There are three types of economies: command, market and mixed. In a market economy. In a command economy the government controls the economy. It decides what will be produces, wages and prices. Socialism and Communism are examples of a command economy. In a market economy the economy is controlled by individuals. In a pure market economy the government is absent from the economy. A mixed economy has element from both a command and market economy. The economic decisions are made by the people but the government plays a role in the resources. Most developed countries today have a mixed economy.
Living in a centrally planned or command economy would be a strange experience indeed, as I have lived in a nation that employs a free market economic status for all of my life. It would take quite some time for me to become accustomed to having most if not all aspects of my economic life wholly presided over by the government. Though it is true that most financial decisions that pertain to me are still made by my parents, I like to think that living in a free market economy benefits me even as a young person, and I would regret having to relinquish such benefits. Thus, I can easily see how there would be more disadvantages to a command economy than advantages, especially for a person who values freedom. I can, however, notice that there are certain aspects of life in a command economy that I may like. In consideration of such things, if I lived in a centrally planned or command economy, one of the things that I would like would be the fact that I could be assured of having a job and a salary so long as I am capable of work. I would like having the security of knowing that I would not have to worry with the possibility of not having the money necessary for living; that is, at least until the government decides that I am expendable. Most especially in the current world, occupations can prove difficult to obtain and maintain, even for those who have a background of experience and education that makes them more qualified than others for a particular job. It is a worry of mine and my siblings that we will not be able to procure dependable jobs after we have finished our college education, so it would be reassuring to know that I would be mostly guaranteed of a job, albeit one that is specified and proctored by the government. I have k...
After World War II, Germany was separated into four different sectors assigned to the triumphant Allied forces: the United States, Britain, France, and the Soviet Union. (Wolski) The capital was located one hundred fifteen miles into Soviet territory. (Kenny) The Western Allies believed this was unfair because Berlin was the only large city at the time. They agreed to separate Berlin into quadrants as well. (Wolski) The United States, Britain, and France joined their sectors together as a democratic state called the Federal Republic of Germany. (Taylor) Meanwhile, Russia kept their portion separate and it became known as the German Democratic Republic (GDR). However, this caused a problem because the democratic West Berlin was entirely surrounded by Soviet land. (Wolski)
...free enterprise system is very important in today’s society. Because of the capitalistic economy people have incentives to work harder and longer and maybe entice people into starting businesses that would not have been there succeed. The law of supply and demand is a great idea for the free enterprise system because it helps producers and consumers come to an agreement on a products cost. The free enterprise system also helps companies keep striving to become efficient and to produce things cheaper so that the public can get products for cheaper. The capitalistic economy makes a way for companies to change with society in a way that businesses are happy because their sales are improved and consumers are happier because they get the products they want. The free enterprise system is the engine that drives the United States economy and continues to work to this day.
Walls are one of man’s oldest defenses; physical barriers that are erected to keep people out, or, in some cases, to keep them in. Walls are physical fortifications that create tension and distain among people on both sides. This is what the Berlin Wall, or der Mauer in German, was; a physical barrier created in Berlin, Germany during the Cold War. It was created by the East Germans in an attempt to stop East German citizens from immigrating to Western Germany. However, the Berlin wall was a crude attempt to separate the political and social variances in Germany during the Cold War, because, while it created a physical barrier, it still was unable separate people in an ethic manor.
The end of World War II was the beginning of the Cold War between the Soviet Union and the United States. The Soviet Union had control over East Berlin, which was governed by a communist government and the United States had control over West Berlin, which was regulated by a democratic government. Both countries wanted full control over Berlin, so the Soviet Union set up a blockade on the West but was unsuccessful. The Berlin Wall was then built to stabilize the economy of East Berlin, which meant that fewer people could escape the east to live in the west. In the article “The fall of the Berlin Wall: what it meant to be there,” by Timothy Garton Ash, he highlights the feelings of no longer having a “iron curtain” segregating both sides of Berlin.
The Berlin Wall, built in August of 1961, was s physical symbol of the political and emotional divisions of Germany. The Wall was built because of a long lasting suspicion between the Soviet Union on one side and Western Europe and the United States on the other. For 28 years the Berlin Wall separated friends, families, and a nation. After WWII was over Germany was divided into four parts. The United States, Great Britain, and France controlled the three divisions that were formed in the Western half and the Eastern half was controlled by the Soviet Republic. The Western sections eventually united to make a federal republic, while the Eastern half became communist.
The Berlin Crisis reached its height in the fall of 1961. Between August and October of that year, the world watched as the United States and the Soviet Union faced off across a new Cold War barrier, the Berlin Wall. In some ways, the Wall was Khrushchev’s response to Kennedy’s conventional buildup at the end of July, and there were some in the West who saw it that way. However, as Hope Harrison has clearly shown, Khrushchev was not the dominant actor in the decision to raise the Wall, but rather acquiesced to pressure from East German leader Walter Ulbricht, who regarded the Wall as the first step to resolving East Germany’s political and economic difficulties. The most pressing of these difficulties was the refugee problem, which was at its height in the summer of 1961 as thousands of East Germans reacted to the increased tensions by fleeing westward. But Ulbricht also saw the Wall as a way to assert East German primacy in Berlin, and thus as a way to increase the pressure on the West to accept East German sovereignty over all of Berlin.
The major difference between a command economy and a market economy is who makes the decisions. In a command economy, the government decides what to produce, who to produce for, and how to produce. In a market economy, the people get to decide what to produce, who to produce for, and how to produce. The major difference lies with the control and who is in charge.
The Berlin Wall was constructed in 1961 by the GDR (German Democratic Republic - (East Germany) under the pretext of keeping out the fascist enemy infiltrating from West Germany. In actual fact, the wall was built to keep in the population of the GDR, many of whom were fleeing to a better life in West Berlin and other European Countries. Armed border guards were sworn to protect East Germany however they knew that a better life existed on the other side of the wall. The photographer, Peter Leibing, captured the moment in history, when the first GDR Border Guard , Conrad Schumann, finally got the courage to desert his post and leap over the barricade (at that point still a barbed wire fence).
If one looks at liberty and individual freedom, it is evident that command economies tend to oppress their citizens. Therefore, socialism, which allows for basic needs to be met and personal freedoms to be upheld, is the best economic system for all of a country’s citizens. Market economies, as a whole, inherently and inevitably lead to poverty and a large class disparity. In a capitalist society, the ones who supply labor, the ones who work the hardest, are the ones who are paid the least. The owners, who are already rich, receive most of the profit and accumulate large masses of wealth.
Therefore a free market is not desirable as maximizing their utility is priority. So government is expected to correct the market failure by choosing to char...
There are two types of economic systems that a society may adhere to; which are polar opposites. The Command system, also known as communism or socialism. In a command economy, the government owns the majority of the resources, and all decisions for the society is made based on a central plan. The command system has been adopted by countries such as the Soviet Union, China and North Korea. This economic system is commonly used by countries under a dictatorship. Despite the negative aura surrounding a dictatorship this system does have its pros and