Command economic system and

Free market economic system

Advantages of Command economic system

2. Monopolizing is not allowed.

1. Industrial power is boosted.
To realize massive projects and attain imperative
social goals, command economy would try to boost
industrial power.
3. Production rates and availability of completed
The main reason for this is that all the forces in a
goods are adjusted. 4. The society and government are streamlined.
command economy are regulated by the
In a command economy, production rates can be This type of economic system has the capability to
government. There will be no provider that is given
adjusted to meet the exact demands of the transform the society to be streamlined with the
control to set the market and rule apart from the
population. Though it limits choices as compared nation’s vision. This means there is harmony
government. While monopolizing certainly exists in
with other economies, it is still effective in lessening between these two units.
other types of economy, it is not present in a
the chances for a shortage to occur.
command economy.

6. There exists easy response to internal disasters

and emergencies. 7. Social welfare is seen as priority.
5. There is room for the better mobilization of
The central and command authority in this type of Social welfare is a major concern in a command
resources.
economic system can easily boost production in economy, where one of its overriding objectives is
Because command economy has a unique make-up,
many of its facilities that are not impacted by a ensuring that maximum social welfare will take
production is done as effectively and efficiently as
calamity or disaster. This is essential to maintain place. This system breeds a sense of community
possible. Therefore, all resources will be mobilized
continuous flow of goods on the market. Apart from because of the lack of income inequality, so the
on a huge scale, which makes sure progress is
this, there will be a rise in production of certain society as a whole can take on production and can
quickly achieved.
products, which is a great help to communities in benefit from it.
overcoming disasters.
Disadvantages of free
market economic system

• Disadvantage: Limited Product Ranges

• Sine businesses are free to pursue profit in whatever way they please, goods and services that are
not profitable generally will not be produced. This can limit the range of goods on offer to
consumers and may impact certain groups of consumers more than others. For example, if it is too
expensive to ship goods to, or open services in, rural communities then services may be
withdrawn and these communities will miss out.

• Disadvantage: Dangers of Profit Motive

• The primary objective for any company in a free market economy is to make a profit. In many
cases, companies may sacrifice worker safety, environmental standards and ethical behavior to
achieve those profits. The early 2000s saw such unethical behavior run rampant at companies such
as Enron and WorldCom. The Deepwater Horizon oil spill in 2010, one of the largest
environmental disasters in U.S. history, was largely attributable to the use of substandard cement
and other cost-cutting measures.

• Disadvantage: Market Failures

• When a free market economy spins out of control, the consequences can be severe. From the Great
Depression of the 1930s to the real estate market crash of 2008, market failures have devastated
the lives of millions in lost income, unemployment and homelessness. Many of these failures have
stemmed from those seeking short-term profits over slow and steady gains, usually aided by loose
credit, highly-leveraged assets and minimal government intervention.