Market/(Capitalist) Economic System Command/(Socialist) Economic System Ownershi
ID: 1132587 • Letter: M
Question
Market/(Capitalist)
Economic System
Command/(Socialist)
Economic System
Ownership of Resources
Who owns the means of production: land, labor, capital, entrepreneurship?
Role of property rights
Are individual property rights strongly enforced through laws, government agents and agencies or not?
Role of prices
Are market forces of supply and demand allowed to set prices or does a central planner set prices?
Self-interest v social interest
Which is valued more by society, self-interest or social interest?
Freedom
Do individuals have more freedom or less freedom?
Entrepreneurship/innovation
Does the economic system foster and reward entrepreneurship and innovation?
Give an example of a good in the U.S. economy, perhaps one you buy or sell, which is predominantly driven by a capitalist, market system. Explain how it fits a market economy.
Give an example of a good in the U.S. economy, perhaps one you buy or sell, which is predominantly driven by a command, or socialist, system. Explain how it fits a command economy.
In your opinion, are most individuals motivated by self-interest or social interest? Please explain, in a few sentences. Give an example which illustrates your point.
Market/(Capitalist)
Economic System
Command/(Socialist)
Economic System
Ownership of Resources
Who owns the means of production: land, labor, capital, entrepreneurship?
Role of property rights
Are individual property rights strongly enforced through laws, government agents and agencies or not?
Role of prices
Are market forces of supply and demand allowed to set prices or does a central planner set prices?
Self-interest v social interest
Which is valued more by society, self-interest or social interest?
Freedom
Do individuals have more freedom or less freedom?
Entrepreneurship/innovation
Does the economic system foster and reward entrepreneurship and innovation?
Explanation / Answer
Introduction:-
A market economy, is largely known as one, in which the market forces make the basic decision as to what goods and services will be produced, in what quantity they will be produced, and the price at which it will be sold in the market. Basically speaking it is assumed, that the economy will be in balance it it decides to operate in such a market structure, since they will produce those products, that will be in maximum demand and at a reasonable cost since one distinct feature of such an economy is also that new enterants can easily enter.
On the other hand, in a socialist economy the decisions as highlighted above, are undertaken by the government in consideration of the public at large.
Answer-
Q1:-
Question
Market/Capitalist System
Command/Socialist System
Ownership of Resources
Who owns the means of production: land, labor, capital, entrepreneurship?
The factors of production are held by private players that produce, in order to attain maximum profits
The ownership of resources is by the government as the aim is equal social justice
Role of property rights
Are individual property rights strongly enforced through laws, government agents and agencies or not?
Individual Property rights are strongly enforced. People are free to hold land
Strict policing is done on holding land in higher proportion. The government holds most of the property which it aims to use for social benefit
Role of prices
Are market forces of supply and demand allowed to set prices or does a central planner set prices?
Market prices are set by market forces of demand and supply. The producers are free to charge, what the buyers are ready to pay for
The prices of goods and services are charged by the government and are set in accordance with helping even the poor people to be able to purchase goods
Self-interest v social interest
Which is valued more by society, self-interest or social interest?
Self-interest is of prime importance, every business house aims at maximizing profits for itself and profit making is seen as the end goal for the society
Social Interest is considered as the top priority for such a structure. It aims to reduce and even remove the gap between rich and poor.
Freedom
Do individuals have more freedom or less freedom?
Individuals tend to have more freedom since they can easily chose the quantity in which they purchase, and the quality which they expect for such a price.
Since, all production is done for masses, people do not enjoy freedom of deciding what to buy therefore they enjoy limited or no freedom at all.
Entrepreneurship/innovation
Does the economic system foster and reward entrepreneurship and innovation?
Since producers are free to choose what to produce, it encourages entrepreneurship and innovation due to higher competition
There is absence/very slow growth of entrepreneurship/innovation and reward recognition as the basis for such a system is ultimately not linked to individual benifit
Q2:-
Give an example of a good in the U.S. economy, perhaps one you buy or sell, which is predominantly driven by a capitalist, market system. Explain how it fits a market economy.
A simple example of such a good or commodity is a laptop or a phone which we purchase in the market. It has a variety that can go from a simple small screen setup that allows one to make basic calls to an Iphone X extending upto a 1000 dollars. It is highly driven by a capitalist mindset and is produced in order to be able to generate maximum revenue.
Q3) Give an example of a good in the U.S. economy, perhaps one you buy or sell, which is predominantly driven by a command, or socialist, system. Explain how it fits a command economy.
An example of such a good would be basic goods such as food grains, pulses etc. These countries seek to produce more of basic goods that help in feeding mass populations and their focus on secondary items are extremely low.
The basis of this is that they want to do more of social good than have a business oriented indent
Question
Market/Capitalist System
Command/Socialist System
Ownership of Resources
Who owns the means of production: land, labor, capital, entrepreneurship?
The factors of production are held by private players that produce, in order to attain maximum profits
The ownership of resources is by the government as the aim is equal social justice
Role of property rights
Are individual property rights strongly enforced through laws, government agents and agencies or not?
Individual Property rights are strongly enforced. People are free to hold land
Strict policing is done on holding land in higher proportion. The government holds most of the property which it aims to use for social benefit
Role of prices
Are market forces of supply and demand allowed to set prices or does a central planner set prices?
Market prices are set by market forces of demand and supply. The producers are free to charge, what the buyers are ready to pay for
The prices of goods and services are charged by the government and are set in accordance with helping even the poor people to be able to purchase goods
Self-interest v social interest
Which is valued more by society, self-interest or social interest?
Self-interest is of prime importance, every business house aims at maximizing profits for itself and profit making is seen as the end goal for the society
Social Interest is considered as the top priority for such a structure. It aims to reduce and even remove the gap between rich and poor.
Freedom
Do individuals have more freedom or less freedom?
Individuals tend to have more freedom since they can easily chose the quantity in which they purchase, and the quality which they expect for such a price.
Since, all production is done for masses, people do not enjoy freedom of deciding what to buy therefore they enjoy limited or no freedom at all.
Entrepreneurship/innovation
Does the economic system foster and reward entrepreneurship and innovation?
Since producers are free to choose what to produce, it encourages entrepreneurship and innovation due to higher competition
There is absence/very slow growth of entrepreneurship/innovation and reward recognition as the basis for such a system is ultimately not linked to individual benifit