The Command System Versus Market System

Command System Versus Market System

There are two overarching types of economic systems that occur within the world, the command system and the market system. The market system is an economic system in which the decision making of the economy is decentralized with little government control. This is also the system that most of the world uses, including countries such as the United States of America, Canada, and Denmark. The main idea behind the Market system is that the economy is primarily driven through private ownership of resources. Along with private ownership of resources the market system is commonly associated with freedoms of enterprise and choice, self-interest, and competition. This is very unique from the command system. There

If people are purchasing high amounts of a certain product then the market system would allow for the company that produces that product to make more of that product in order to compensate for the increase in demand. This is as simple as the law of supply and the law of demand. Consumers that want a certain product bring about producers that will create the wanted product. This does not happen in a command system since all resources are centralized to the government. The government will not look at what people want but rather the government looks at purely what is seen as needed. If the country needs more plastic cups then the government will not be likely to direct plastic resources towards the production of a trend item that requires plastic to be produced. Because there is no possibility to create the wanted product this leads to a population that lacks drive and incentives to further itself. There is no creativity and without creativity there is a lack of creating new products that could help further the economy through trade. This also leads to no incentive for higher learning either purely through a university education or even a certain trade. The population will only be acquiring the skills that are useful according to the government. There will be no education outside of the government and then there will

This is the essence of what the “American Dream” is. A person that comes to America with little money has the ability to work hard, invest that money, and see a profitable return. This is because they have the ability to decide where their money will go and eventually there decisions can lead them to economic stability or financial gain. You would never hear of someone immigrating to a command system economy such as China or Myanmar because they want to find financial prosperity. When you live in a country that has implemented a command system then there is no social mobility. Everyone is at the same level. The mountains and valleys of economics have been leveled and there is no freedom to try your hand at financial prosperity. You cannot start your own restaurant in order to try to provide for your family, instead you will be handed a job based on some skill requirements you have met and you will make the same amount of money as everyone else and you will never have the financial freedom to try and make more money no matter how hard you work. The market system here in America is the opposite. You have the freedom to make as much money as possible depending on the decisions you make. It is ultimately your decision how successful you will be and this leads to incentives and competitions. These are the things that make economies thrive. This is because it leads to higher quality products