from command economy to a market economy due to the fact that in a market economy, there

is consumer sovereignty. According to a nobel prize winner in America, Paul Samuelson, he put
forward that, ‘A consumer is a king’. This means that in a market economy production is carried
out with consistence to consumer taste and preferences. Usually all the consumers prefer
higher quality products. This is what is taken into a consideration by producers in a market
economy ,hence allocative efficiency is achieved , and to that extend wastages are minimized
in the economy because resources are devoted to the production of a product mostly
demanded by the society , thus a market economy is beneficial to the national society
compared to a command economy .

Although the action of changing from a command economy to market economy can be argued
to beneficial to the national society , however, empirical solid evidence by different groups of
economists disregarded and destroyed this assertion due to the fact that, in a market
economy there is a problem of market failure. Market failure was defined as a situation
whereby the operations of the invisible hand fail to allocate resources in the best way the
society wants.
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Economists delineates that, a market economy is not beneficial to the nation in the sense that
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there is no provision of public goods. Public goods are goods that are characterized by two
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unique features of non excludable and non diminishable. Public goods are said to be non
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excludable this means that it is impossible to separate payers from non payers, hence they are
characterized with the problem of free riders. They are also non diminishable, this means that
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the consumption of public goods by one person does not diminish the amount available for the
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next person, for example street lights. It is argued that the amount of street light enjoyed by an
individual who pass by firstly is the same amount of light enjoyed by the eighth person to pass
by hence proves non diminishable in consumption. Economists stresses that public goods are
not economically packed and priced hence they are not produced in a market economy, thus
the word market failure came into existent.

Furthermore, a market economy is said to be non beneficial since there is the existence of
unfair distribution of income and wealth. Economists emphasize that, in a market economy
wealth accumulates in the hands of the few. There is a issue that some individuals become rich
on the expense of others. This is proved by the operations of the invisible hand on the
distribution of scarce resources to the national society in a market economy. Price is used as a
rationing factor, hence elimination of poor consumers, thus the rich become richer and the poor
become poorer. That inequity results in market failure.

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