The term ‘economic system’ refers to
the mode of production and the distribution of goods and services within
which economic activity take place in the country.
Economic system refers to the way different economic elements, i.e, individual workers and managers, productive organizations such as factories or firms and government agencies etc., are linked together to form an organic whole. Basically, there are only three economic systems. At one extreme, there is the free market economy with a very limited role for the government. The command economy is on the other end with the government taking virtually total control. As far as mark market structures are concerned perfect competition and monopoly are the two highly unrealistic extremes. Almost every economy in the world is, therefore, a mix of the two, and is called a mixed economy.
THE MARKET ECONOMY
The market economy is perhaps the oldest among all the economic systems that exist in the present day world. This kind of economic system existed in some of the most advanced countries of Western Europe and America in the earlier days but with the advance of time it was considerably modified and diluted. Although the capitalism has been criticized bitterly from time to time, it still retains its existence in some of the most prosperous nations of the world. The United States of America is the largest capitalist country existing today, although even here, capitalism has almost lost much of its purity and vigor.
A market economy is a type of economic system where supply and demand manage the economy, rather than government regulation. It is a sort of economy is economy in which individuals own all the resources and the decisions about the allocation of those resources are made by individuals without government intervention. There are no completely "free-enterprise" or market economies. ore The characteristics of a market economy are more visible in the United States. In a market economy, the producers decide the goods and services to produce, their volumes, the prices to be charged and the payment to employees. The pressures of competition, supply, and demand in a free-market economy influence these decisions.
The free enterprise has the role of a limited government. Buyers and sellers, not the government, make most economic decisions. A competitive market economy promotes the efficient use of its resources with a self-regulating and self-adjusting mechanism. The government has no significant economic role to play. A number of limitations and undesirable outcomes associated with the market system result in an active, but limited economic role for the government.
In a market economy, individuals own almost everything including private businesses, natural and capital resources like equipment and buildings the goods and services produced in the economy. The private ownership, along with the freedom to negotiate legally binding contracts, permits people to obtain and use resources as they opt.
Thus, capitalism is a system in which on an average, much of the greater portion of economic life, and particularly new investment, is carried on by private units under conditions of active and substantially free competition and under the incentive of a hope for profit.
Features of Market Economy:
1. Ownership
Nearly all of the country's factors of production are owned by private individuals. However, firms own some of the resources, it is private individuals, or groups of individuals, who own the resources to rent them out to the firms so that they can produce the goods and services.
2. The Right of Inheritance:
In a capitalist economy, not only the people have the right to own private property, but they also have the legal right to inherit the property of their predecessors. In fact the right to keep private property and the right of inheritance are so intimately connected that they are sometimes taken to mean the same thing.
3. Profit Motive:
The motive to earn and maximize the private profits is the guiding force for the working of a capitalist economy. Capitalism without the motive to earn private profits is in fact unthinkable. On the other hand, the profit motive does not play much role in the socialist economy. It has little or no significance thereof. But under capitalism, every entrepreneur, producer or businessman is guided by the profit motive in pursuing his economic activities.
4. Free enterprise:
Basically, firms can sell goods and services they want effectively responding to the consumers, who are allowed to buy anything producers sell. Workers can take on any job they want.
5. The level of competition:
Freedom of occupation and the freedom of consumption lead to the emergence of competition, both in the product and the factor market. The laborers compete with each other to get jobs in different lines of production. Consumers compete with each other purchase goods from those producers who sell the cheapest. There is very large number of buyers and sellers in the market. Thus a situation of perfect competition arises in the market.
6. The pricing system:
Nearly all markets are perfectly competitive and the price mechanism allocates the economy's resources. The price mechanism acts as a signal and an incentive for producers to act in the required way so as to maximize their gain, which, in turn, optimizes the allocation of resources in the whole economy.
7. Freedom of Choice to the Consumers:
The capitalist economy is characterized by the freedom of choice to the consumers. Consumer is the king. He is free to choose whatever he wants to consume. He is free to spend his income in the manner he likes. There is no control or regulation of goods which he wants to consume. In fact it is the consumer who directs the production in accordance with his own preference. Under capitalism, the consumer is said to be a king. It is his choice which determines what should be produced. The consumer directs the production through the price mechanism. When he wants more of a thing, the price goes up, indicating to the producers that more of this commodity should be produced. Thus, the consumer’s sovereignty prevails under capitalism.
The free-market economy is the system of economic organization which is absolutely free from the government intervention and control. The market forces operate freely and without the least obstruction from the state. However, the description of capitalism may not tally with the capitalist societies found in the modern world. In all the capitalist countries, the free market economy is regulated by the state in order to promote the social interest. Capitalism, in fact, is a dynamic system. It has been changing according to the needs of time. Thus even in the leading capitalist countries, we find it only in a modified form, its important features being still retained.
Strengths of a free market economy:
1.Efficiency:
Free market economies are very competitive. Majority of their industries are assumed to be perfectly competitive and allocate the resources resulting in productive efficiency. Thus, free market economies allocate their resources more efficiently than other economic systems. People take decisions about the goods and services to be produced.
2. Innovation:
Firms will always be looking to produce something new to get ahead of their rivals. Even though the government's role is limited, one of its tasks is to protect property rights of people including intellectual property rights through patents. In the free market system there are incentives for firms to be innovative and produce better quality products. Evidently, there is no incentive for the planner to be innovative.
3.Capitalism works automatically:
The capitalist economic system works as a self-acting machine not to be manipulated or directed by some outside authority like Planning Commission or the central Government. Price mechanism works with the help an invisible hand that allocates resources automatically into various streams of production. Automatic forces of demand and supply decide the prices of goods and services. The market forces also determine the factor payments. Since the forces are constantly operating to keep the economy on the path of equilibrium every thing moves smoothly. Though there may be some deviations from the path of equilibrium, yet the forces of demand and supply immediately restore the equilibrium and correct the deviations automatically. So the capitalist system of society works in a self acting manner without any external aid or regulation.
4. Higher economic growth rates:
There are evidences that countries whose economic system has been nearer to the free market model have grown much faster than those with a command economy. The United States of America has been the most successful economy in the world. They have been one of the freest economies in the world.
5. Spirit of Enterprise:
The capitalist economy promotes the spirit of experimentation and adventure in the producers. The producers would always be busy in trying to find out new and better methods of selling the products in the hope to maximize their profits and simultaneously would try out new and better methods of production in order to reduce the cost of production and raise the level of profits.
6. Technological Progress:
The capitalist economy provides encouragement to the technological progress. Each producer faces a keen competition from others under capitalist organization, he constantly looks for new products, methods, processes and new ways of marketing and reduce the cost of production and thus maximize the profits. This is only for those who have incorporated the change first. Later every one would come to know about the new method of production and adopt it
.
Weaknesses of a free market economy:
1.Public, merit and demerit goods-
Public goods cannot be provided in the private owing to their two characteristics, non-diminish ability and non-exclude ability. These goods have to be provided publicly. Even in a free market, one among government's few roles to provide defense, for example. However, there could also be a problem with merit goods and demerit goods. However merit goods, like health and education, tend to be below provided in a free market. Definitely in the USA the public health system may be a 'last resort' system. People are suggested to buy health insurance. Of course, the poor would not be ready to afford this, and some people might merely decide not to trouble if they feel notably healthy. Demerit goods are dangerous for people. Government ought to ban such drugs, and impose heavy tax on cigarettes and alcohol. A government with a restricted role would not take enough action in this area, inflicting health issues for the economy. Of course, the advantage of a command economy is that the study government can make sure that public and merit goods are consumed at the proper levels and that demerit goods are restricted or taxed heavily.
2. Unequal distribution of income:
Unequal distribution of income is a big disadvantage of a free market economy with very limited government intervention benefits will be low, the health service poor and schools under funded. If people start life with very little and do not even get a good education, there will be very little protection from destitution.
3.The environment:
Free market economies are likely to produce more pollution. Command economies can ensure that the production processes that they chose are as environmentally friendly as possible and the level of output is socially optimal.
A command economy is associated with a socialist or communist economic system where resources – land and capital- are collectively owned. The state plans the allocation of resources at three important levels. It plans the allocation of resources between current consumption and investment for the future. By sacrificing some present consumption and diverting resources into investment, it could increase the economy’s growth rate. The amount of resources it chooses to devote to investment will depend on its broad macroeconomic strategy: the importance it attaches to growth as opposed to current consumption.
At the micro-economic level the command economy plans the output of every business and firm, the techniques that may be used, and the labor and the different resources required by every business and firm. To conform that the desired inputs are obtainable, the state would perhaps conduct some style form of input-output analysis. All industries are viewed as users of inputs from other industries and as producers of output for consumers or different industries. Such as, the steel industry uses inputs from the coal and iron-ore industries and produces output for the vehicle and construction industries. Input-output analysis indicates, for every business, the sources of all its inputs and the end point of all its output. The state makes an attempt to match up the inputs and outputs of every business so that the planned demand for each industry’s product is equal to its planned offer.
The command economy plans the distribution of output between shoppers. This can depend on the government’s objectives. It is going to distribute goods consistent with its judgment of people’s needs; or it is going offer more to people who produce a lot of, thereby providing an incentive for those to work harder; or more likely it will try to find some compromise between the two. It is going to distribute goods and services directly; or it may decide the distribution of money incomes and allow people to determine how to pay them. If it does the latter, it going still request to influence the pattern of expenditure by setting applicable prices; low prices to encourage consumption, and high prices to discourage consumption.
Strengths of Command Economy:
1. Ownership: The government owns nearly all of the country's factors of production. Labor is only factor over which the government does not have total control, they certainly have indirect control over the workers.
2. Objectives- The command economy is the complete opposite of the pure self-interest of the free market system. No one (in theory) thinks of himself (or herself). The government workers and consumers are all assumed to be working for the 'common good'. This system is often associated with communist Soviet Union (as it was before 1989), but the fascist Hitler ran a 'planned' economy, although dictatorially. However, that system ended up being for the common good! Democratic countries also often attempt a less severe form of planned economy via socialism.
Weaknesses of Command Economy: The command economies suffer from the following evils:
1. Evils of Bureaucracy: A very fundamental weakness of these economies is that bureaucrats manage them. The large number people are engaged in the task of drawing elaborate schemes for economic development. This results in the wastage of financial and human resources. Further, the government officials managing the public enterprises are generally not competent to do so. This results in the expansion of inefficiency in the management of industries.
2. Concentration of Power: The entire economic rise of the people in a command economy is managed by a Central planning authority. Thus, on the one hand power goes on concentrating in the hands of the government on the other the human liberties are drastically reduced. Generally the democratic set up of the government is replaced by a one-man rule. Complete infliction of the economic ad social life of people reduces them to the state of mere wage earners without any individual initiative and enterprise.
Economic system refers to the way different economic elements, i.e, individual workers and managers, productive organizations such as factories or firms and government agencies etc., are linked together to form an organic whole. Basically, there are only three economic systems. At one extreme, there is the free market economy with a very limited role for the government. The command economy is on the other end with the government taking virtually total control. As far as mark market structures are concerned perfect competition and monopoly are the two highly unrealistic extremes. Almost every economy in the world is, therefore, a mix of the two, and is called a mixed economy.
THE MARKET ECONOMY
The market economy is perhaps the oldest among all the economic systems that exist in the present day world. This kind of economic system existed in some of the most advanced countries of Western Europe and America in the earlier days but with the advance of time it was considerably modified and diluted. Although the capitalism has been criticized bitterly from time to time, it still retains its existence in some of the most prosperous nations of the world. The United States of America is the largest capitalist country existing today, although even here, capitalism has almost lost much of its purity and vigor.
A market economy is a type of economic system where supply and demand manage the economy, rather than government regulation. It is a sort of economy is economy in which individuals own all the resources and the decisions about the allocation of those resources are made by individuals without government intervention. There are no completely "free-enterprise" or market economies. ore The characteristics of a market economy are more visible in the United States. In a market economy, the producers decide the goods and services to produce, their volumes, the prices to be charged and the payment to employees. The pressures of competition, supply, and demand in a free-market economy influence these decisions.
The free enterprise has the role of a limited government. Buyers and sellers, not the government, make most economic decisions. A competitive market economy promotes the efficient use of its resources with a self-regulating and self-adjusting mechanism. The government has no significant economic role to play. A number of limitations and undesirable outcomes associated with the market system result in an active, but limited economic role for the government.
In a market economy, individuals own almost everything including private businesses, natural and capital resources like equipment and buildings the goods and services produced in the economy. The private ownership, along with the freedom to negotiate legally binding contracts, permits people to obtain and use resources as they opt.
Thus, capitalism is a system in which on an average, much of the greater portion of economic life, and particularly new investment, is carried on by private units under conditions of active and substantially free competition and under the incentive of a hope for profit.
Features of Market Economy:
1. Ownership
Nearly all of the country's factors of production are owned by private individuals. However, firms own some of the resources, it is private individuals, or groups of individuals, who own the resources to rent them out to the firms so that they can produce the goods and services.
2. The Right of Inheritance:
In a capitalist economy, not only the people have the right to own private property, but they also have the legal right to inherit the property of their predecessors. In fact the right to keep private property and the right of inheritance are so intimately connected that they are sometimes taken to mean the same thing.
3. Profit Motive:
The motive to earn and maximize the private profits is the guiding force for the working of a capitalist economy. Capitalism without the motive to earn private profits is in fact unthinkable. On the other hand, the profit motive does not play much role in the socialist economy. It has little or no significance thereof. But under capitalism, every entrepreneur, producer or businessman is guided by the profit motive in pursuing his economic activities.
4. Free enterprise:
Basically, firms can sell goods and services they want effectively responding to the consumers, who are allowed to buy anything producers sell. Workers can take on any job they want.
5. The level of competition:
Freedom of occupation and the freedom of consumption lead to the emergence of competition, both in the product and the factor market. The laborers compete with each other to get jobs in different lines of production. Consumers compete with each other purchase goods from those producers who sell the cheapest. There is very large number of buyers and sellers in the market. Thus a situation of perfect competition arises in the market.
6. The pricing system:
Nearly all markets are perfectly competitive and the price mechanism allocates the economy's resources. The price mechanism acts as a signal and an incentive for producers to act in the required way so as to maximize their gain, which, in turn, optimizes the allocation of resources in the whole economy.
7. Freedom of Choice to the Consumers:
The capitalist economy is characterized by the freedom of choice to the consumers. Consumer is the king. He is free to choose whatever he wants to consume. He is free to spend his income in the manner he likes. There is no control or regulation of goods which he wants to consume. In fact it is the consumer who directs the production in accordance with his own preference. Under capitalism, the consumer is said to be a king. It is his choice which determines what should be produced. The consumer directs the production through the price mechanism. When he wants more of a thing, the price goes up, indicating to the producers that more of this commodity should be produced. Thus, the consumer’s sovereignty prevails under capitalism.
The free-market economy is the system of economic organization which is absolutely free from the government intervention and control. The market forces operate freely and without the least obstruction from the state. However, the description of capitalism may not tally with the capitalist societies found in the modern world. In all the capitalist countries, the free market economy is regulated by the state in order to promote the social interest. Capitalism, in fact, is a dynamic system. It has been changing according to the needs of time. Thus even in the leading capitalist countries, we find it only in a modified form, its important features being still retained.
Strengths of a free market economy:
1.Efficiency:
Free market economies are very competitive. Majority of their industries are assumed to be perfectly competitive and allocate the resources resulting in productive efficiency. Thus, free market economies allocate their resources more efficiently than other economic systems. People take decisions about the goods and services to be produced.
2. Innovation:
Firms will always be looking to produce something new to get ahead of their rivals. Even though the government's role is limited, one of its tasks is to protect property rights of people including intellectual property rights through patents. In the free market system there are incentives for firms to be innovative and produce better quality products. Evidently, there is no incentive for the planner to be innovative.
3.Capitalism works automatically:
The capitalist economic system works as a self-acting machine not to be manipulated or directed by some outside authority like Planning Commission or the central Government. Price mechanism works with the help an invisible hand that allocates resources automatically into various streams of production. Automatic forces of demand and supply decide the prices of goods and services. The market forces also determine the factor payments. Since the forces are constantly operating to keep the economy on the path of equilibrium every thing moves smoothly. Though there may be some deviations from the path of equilibrium, yet the forces of demand and supply immediately restore the equilibrium and correct the deviations automatically. So the capitalist system of society works in a self acting manner without any external aid or regulation.
4. Higher economic growth rates:
There are evidences that countries whose economic system has been nearer to the free market model have grown much faster than those with a command economy. The United States of America has been the most successful economy in the world. They have been one of the freest economies in the world.
5. Spirit of Enterprise:
The capitalist economy promotes the spirit of experimentation and adventure in the producers. The producers would always be busy in trying to find out new and better methods of selling the products in the hope to maximize their profits and simultaneously would try out new and better methods of production in order to reduce the cost of production and raise the level of profits.
6. Technological Progress:
The capitalist economy provides encouragement to the technological progress. Each producer faces a keen competition from others under capitalist organization, he constantly looks for new products, methods, processes and new ways of marketing and reduce the cost of production and thus maximize the profits. This is only for those who have incorporated the change first. Later every one would come to know about the new method of production and adopt it
.
Weaknesses of a free market economy:
1.Public, merit and demerit goods-
Public goods cannot be provided in the private owing to their two characteristics, non-diminish ability and non-exclude ability. These goods have to be provided publicly. Even in a free market, one among government's few roles to provide defense, for example. However, there could also be a problem with merit goods and demerit goods. However merit goods, like health and education, tend to be below provided in a free market. Definitely in the USA the public health system may be a 'last resort' system. People are suggested to buy health insurance. Of course, the poor would not be ready to afford this, and some people might merely decide not to trouble if they feel notably healthy. Demerit goods are dangerous for people. Government ought to ban such drugs, and impose heavy tax on cigarettes and alcohol. A government with a restricted role would not take enough action in this area, inflicting health issues for the economy. Of course, the advantage of a command economy is that the study government can make sure that public and merit goods are consumed at the proper levels and that demerit goods are restricted or taxed heavily.
2. Unequal distribution of income:
Unequal distribution of income is a big disadvantage of a free market economy with very limited government intervention benefits will be low, the health service poor and schools under funded. If people start life with very little and do not even get a good education, there will be very little protection from destitution.
3.The environment:
Free market economies are likely to produce more pollution. Command economies can ensure that the production processes that they chose are as environmentally friendly as possible and the level of output is socially optimal.
A command economy is associated with a socialist or communist economic system where resources – land and capital- are collectively owned. The state plans the allocation of resources at three important levels. It plans the allocation of resources between current consumption and investment for the future. By sacrificing some present consumption and diverting resources into investment, it could increase the economy’s growth rate. The amount of resources it chooses to devote to investment will depend on its broad macroeconomic strategy: the importance it attaches to growth as opposed to current consumption.
At the micro-economic level the command economy plans the output of every business and firm, the techniques that may be used, and the labor and the different resources required by every business and firm. To conform that the desired inputs are obtainable, the state would perhaps conduct some style form of input-output analysis. All industries are viewed as users of inputs from other industries and as producers of output for consumers or different industries. Such as, the steel industry uses inputs from the coal and iron-ore industries and produces output for the vehicle and construction industries. Input-output analysis indicates, for every business, the sources of all its inputs and the end point of all its output. The state makes an attempt to match up the inputs and outputs of every business so that the planned demand for each industry’s product is equal to its planned offer.
The command economy plans the distribution of output between shoppers. This can depend on the government’s objectives. It is going to distribute goods consistent with its judgment of people’s needs; or it is going offer more to people who produce a lot of, thereby providing an incentive for those to work harder; or more likely it will try to find some compromise between the two. It is going to distribute goods and services directly; or it may decide the distribution of money incomes and allow people to determine how to pay them. If it does the latter, it going still request to influence the pattern of expenditure by setting applicable prices; low prices to encourage consumption, and high prices to discourage consumption.
Strengths of Command Economy:
1. Ownership: The government owns nearly all of the country's factors of production. Labor is only factor over which the government does not have total control, they certainly have indirect control over the workers.
2. Objectives- The command economy is the complete opposite of the pure self-interest of the free market system. No one (in theory) thinks of himself (or herself). The government workers and consumers are all assumed to be working for the 'common good'. This system is often associated with communist Soviet Union (as it was before 1989), but the fascist Hitler ran a 'planned' economy, although dictatorially. However, that system ended up being for the common good! Democratic countries also often attempt a less severe form of planned economy via socialism.
3. Secures Equitable Distribution of National Income:
A planned economy is a classless society. Therefore, there is no place
for rich or poor or permit the existence of class distinctions in such a
society. Since the state owns the means of production there is no
question of private profits, which increases and perpetuates the
inequalities in the distribution of national income
4. Secures Coordinated Development
4. Secures Coordinated Development
The
command economy being essentially a planned economy, secures balanced
and coordinated development of the various sectors of national economy.
The central planning authority has a complete control over the various
aspects of economic life and has a thorough knowledge of position
regarding demand and supply as against the sketchy knowledge possessed
by millions of isolated entrepreneurs under capitalism. Therefore,
through the process of economic planning a socialist economy can secure a
coordinated and more rapid economic development.
5. The pricing system: There is no competition, so there is no price mechanism. The prices are fixed by the government authorities. It is because they set prices at low levels to ensure that everyone can afford the goods that excess demand occurs causing long queues for goods outside shops and therefore, the creation of black markets.
5. The pricing system: There is no competition, so there is no price mechanism. The prices are fixed by the government authorities. It is because they set prices at low levels to ensure that everyone can afford the goods that excess demand occurs causing long queues for goods outside shops and therefore, the creation of black markets.
6. The planning system:
The planning system is another feature of the command economy. As the
government runs the system, they plan the way how all the resources
ought to be used, what should be produced and in what quantities. They
must decide how the goods are to be made and what human resources should
be used and where? They decide the techniques of production to be used
and the manner the finished goods are to be divided between the workers
(or consumers). They directly set the output levels and price levels.
7. Eliminates cyclical up and down and unemployment:
Business cycles are an inherent feature of capitalism. Cyclical
fluctuations in economic activity are a direct outcome of the
uncoordinated nature of the capitalist economy. Under command economy
the trade cycles are completely absent. When there is no cyclical
fluctuation, the planned economy assures a job to each one in the
society who is able to do work. The economic resources of the community
are being fully utilized and each person is provided with a job
according to his capacity, taste and suitability.
8. Eliminates labor disputes: A capitalist economy is marked by constant labor disputes. Strikes and lockouts keep on occurring every now and then that result in tremendous wastage of man-hours. This is harmful to the labor, capitalist and the society at large in the form of loss of production and higher prices. Labour disputes do not occur in a command economy where no clash of interest between the labor and the management exists.
9. Provides Social Security: A command economy makes proper arrangements for giving social security benefits to the nationals. Immediate aid is provided to the people at times of sickness or accidents. Excellent medical care is promised to those who are subjected to such evils. Old-age pensions are given to all who become unfit for work due to old age. In case of premature death, the state bears the full expenses of the dependents of the deceased workers.
8. Eliminates labor disputes: A capitalist economy is marked by constant labor disputes. Strikes and lockouts keep on occurring every now and then that result in tremendous wastage of man-hours. This is harmful to the labor, capitalist and the society at large in the form of loss of production and higher prices. Labour disputes do not occur in a command economy where no clash of interest between the labor and the management exists.
9. Provides Social Security: A command economy makes proper arrangements for giving social security benefits to the nationals. Immediate aid is provided to the people at times of sickness or accidents. Excellent medical care is promised to those who are subjected to such evils. Old-age pensions are given to all who become unfit for work due to old age. In case of premature death, the state bears the full expenses of the dependents of the deceased workers.
Weaknesses of Command Economy: The command economies suffer from the following evils:
1. Evils of Bureaucracy: A very fundamental weakness of these economies is that bureaucrats manage them. The large number people are engaged in the task of drawing elaborate schemes for economic development. This results in the wastage of financial and human resources. Further, the government officials managing the public enterprises are generally not competent to do so. This results in the expansion of inefficiency in the management of industries.
2. Concentration of Power: The entire economic rise of the people in a command economy is managed by a Central planning authority. Thus, on the one hand power goes on concentrating in the hands of the government on the other the human liberties are drastically reduced. Generally the democratic set up of the government is replaced by a one-man rule. Complete infliction of the economic ad social life of people reduces them to the state of mere wage earners without any individual initiative and enterprise.
3. Loss of Consumer’s Sovereignty:
Under free-market economy customers decide the goods and services to be
produced and consumed. The market forces of demand and supply determine
prices and volume of goods and services. However, under planned economy
the central planning authority determines prices the price-mechanism
does not operate freely.
4. No Freedom of Occupational Choice: The planned economies do not allow people to select or change their occupation consistent with their own will. The workforce and other resources of the community are controlled by a central planning authority that directs them into numerous channels of production consistent with a general plan of the economy. Of course, as far as possible, the workers are placed into different occupations consistent with their capacity, fitness and quality.
4. No Freedom of Occupational Choice: The planned economies do not allow people to select or change their occupation consistent with their own will. The workforce and other resources of the community are controlled by a central planning authority that directs them into numerous channels of production consistent with a general plan of the economy. Of course, as far as possible, the workers are placed into different occupations consistent with their capacity, fitness and quality.
No comments:
Post a Comment