Market Economy and Planned Economy
Essay Assignment
Introduction
From1760s to 1830s, UK originally completed the industrial revolution and achieved the large-scale production of the machines. And then other European countries followed the UK and finished the industrial revolution. All these greatly promoted the development of the market economy in Europe. From the ending of the 19th century, the major capitalist countries in Europe and the United States had successively entered the stage of monopoly capitalism from the unrestricted competition of the capitalist stage. In order to get more resources, some capitalist countries started twice world wars. After the world war two, United Stated became the most powerful country in the world. And the market economy began to be developed in the all world.
At the same time, the planned economy, a completely opposite economic system, had been developed in some socialist countries such as Soviet Union, Cuba and China. Over a period of time, the planned economy showed its persuasive power in these after-war countries and made significant contributions to the economic development of these countries. But after the disintegration of the Soviet Union, the planned economy began to disappear in the world, and there are only two countries in the world who implement the planned economy. In the capitalist world, many countries began to realize that the market economy was not a panacea after the Great Depression of America in 1930s. In today 's world, there are no countries that use the pure market economy as its monetary system, and the mixed economy is more popular. In this task, we have to discuss the advantages and disadvantages of the market economy and explore one question: is the market mechanism better than the planned economy as a means of allocating scarce resources?
What is the market economy?
According to Chris and Demand (2010), a market economy, as known as capitalism or a free enterprise system, is an economic mechanism in where goods and
Introduction
From1760s to 1830s, UK originally completed the industrial revolution and achieved the large-scale production of the machines. And then other European countries followed the UK and finished the industrial revolution. All these greatly promoted the development of the market economy in Europe. From the ending of the 19th century, the major capitalist countries in Europe and the United States had successively entered the stage of monopoly capitalism from the unrestricted competition of the capitalist stage. In order to get more resources, some capitalist countries started twice world wars. After the world war two, United Stated became the most powerful country in the world. And the market economy began to be developed in the all world.
At the same time, the planned economy, a completely opposite economic system, had been developed in some socialist countries such as Soviet Union, Cuba and China. Over a period of time, the planned economy showed its persuasive power in these after-war countries and made significant contributions to the economic development of these countries. But after the disintegration of the Soviet Union, the planned economy began to disappear in the world, and there are only two countries in the world who implement the planned economy. In the capitalist world, many countries began to realize that the market economy was not a panacea after the Great Depression of America in 1930s. In today 's world, there are no countries that use the pure market economy as its monetary system, and the mixed economy is more popular. In this task, we have to discuss the advantages and disadvantages of the market economy and explore one question: is the market mechanism better than the planned economy as a means of allocating scarce resources?
What is the market economy?
According to Chris and Demand (2010), a market economy, as known as capitalism or a free enterprise system, is an economic mechanism in where goods and
References: Joseph, C. & Media, D (2011). Features of the Market Economic System. Houston Chronicle. Retrieved 27,10,2012, from http://smallbusiness.chron.com/features-market-economic-system-3887.html World Economic Outlook Database, October 2012. International Monetary Fund. Accessed on October 10, 2012. Norton, M, I. & Ariely, D (14.11.2010). The gap between rich and poor in America is bigger than people think. Los Angeles Times. 2010 Alec Nove. (1987). Planned economy. The New Palgrave: A Dictionary of Economics, v. 3, pp. 879–80. Martin, M. & Drahokoupil, J. (2010). Transition Economies: Political Economy in Russia, Eastern Europe, and Central Asia. Hoboken, New Jersey: Wiley. ISBN 978-0-470-59619-7. Gallo, A, E. (1999). America’s Eating Habits: Changes and Consequences. U.S. Dept. of Agriculture, Economic Research Service (1999). Kouwenhoven, R. (1996). A Comparison of Soviet and US Industrial Performance: 1929-90. Groningen Growth and Development Centre Research Memorandum GD-29 May 1996 1997.