Economic Systems: Command and Control and Laissez-faire (Essay Sample)

Economic Systems: Command and Control and Laissez-faire Student's Name Department, Institutional Affiliation Course Code: Course Title Professor's Name Due Date Economic Systems: Command and Control and Laissez-faire Content 1 Differences between laissez-faire and command-and-control economic systems The potential approach for gaining a deeper understanding of the distinctions between command and control and laissez-faire economic systems is to examine the United States as an example of a laissez-faire system and China as an illustration of a command and control system. In the United States, the laissez-faire system emphasizes little regulation of economic activity. The system under discussion is unique in that it promotes individual initiative, protects the rights of private property owners, and encourages healthy competition in the marketplace. Market forces control pricing, resource allocation, and economic progress (Olssen, 2020, p. 126), and it is the government's principal role to respect contractual agreements and ensure a stable economic environment. In the United States, for instance, businesses and individuals have a great deal of economic freedom and independence, with most resource allocation left to the free market. The Chinese government, on the other hand, exerts a great deal of influence on the country's economy through its Command and Control System. The state plays a significant role in economic planning, resource allocation, and market regulation within this framework. In many countries, state-owned enterprises (SOEs) play a crucial role in the economy, with the government exercising control through long-term strategies and policies (Olssen, 2020, p. 126). In China, for instance, the government's central planning and direction have a significant impact on the pace of economic development, making China a model command and control system. This includes government-led initiatives, targeted industry strategies, and significant investments in backbone industries and infrastructure. The level of government involvement in economic matters is the primary dividing line between these two models. Between the two extremes of economic management, laissez-faire, and command and control, the government plays a less important role and relies more on market forces to accomplish its goals. The economic performance, personal liberties, and social results are all affected by the system chosen, reflecting a society's ideals and objectives. Content 2 Comparison of political economy in the United States and China Examining the United States and China's political economies in depth reveals the complex interconnections and complexities that characterize their economic successes. Political economy The United States has been able to establish itself as a dominating economic force on an international level as a direct result of its economy, which is both highly developed and diverse. The relatively high GDP per capita of the country is an indication of the relatively high quality of life that its people enjoy. The adoption of a laissez-faire economic policy has created a climate that is suitable for the development of innovation and entrepreneurship, which has resulted in the proliferation of a large number of profitable technical corporations, startups, and enterprises (Dunstan, 2020). Because of the current dynamic environment, which creates a climate that supports both risk-taking and competition, this has the effect of boosting economic growth and enabling the creation of new technologies. On the contrary, China's economic growth during the last three decades has shown a striking pattern of fast expansion, which stands out among other developing nations. As a result of the country's remarkable economic expansion, it has moved up to the position of having the world's second-largest economy. This accomplishment may be credited to a number of variables, including its large population and the execution of a strategy focused on exports. However, while having a sizeable gross domestic product (GDP), China's GDP per capita is still much lower than that of the United States, indicating that there are significant discrepancies in the distribution of wealth (Guriev, 2022, p. 780). The command and control system in China, which is marked by solid government engagement, has been crucial in successfully facilitating effective planning, infrastructure development, and strategic investments. However, the command and control system is full of its negatives, which include, but are not limited to, difficulties related to wealth imbalance and apprehensions about the durability of its economic growth framework. Moreover, the command and control system has its benefits. In conclusion, the two countries exhibit different approaches to economic governance: the US places more emphasis on state-led growth and strategic planning. At the same time, China emphasizes market-driven individuality and innovation. These different systems produce different economic outcomes: China concentrates on fast economic development while battling income inequality, whereas the United States excels in GDP per capita and innovation. Economic Policy: An in-depth analysis of China's and the United States' economic strategies highlights the fundamental distinctions in their respective methodologies. The United States adheres to free-market principles in economic policy, which places a premium on limiting the role of government in the economy. This free-market strategy relies on the efficiency-boosting potential of market forces to distribute available resources. The government's primary responsibility is to guarantee the rule of law, enforce contracts, and make it easy for businesses to operate (Dunstan, 2020). Key aspects of this system are low taxes and a regulatory atmosphere that promotes entrepreneurship and competition. The United States encourages people to make their own choices about the economy, which has led to a dynamic and varied economy. In contrast, China follows a state-led growth model that places a premium on central government planning and involvement. China's government invests strategically in infrastructure, prioritizes export development, and employs careful planning to maximize the country's economic potential. The government aggressively implements industrial policies to boost vital industries, such as manufacturing, technology, and renewable energy. Expanding exports, advancing technology, and creating new jobs are just a few of the national economic aims that these programs aim to accomplish. The state also has considerable influence throughout economic growth via its guidance of resource allocation and investment choices. The United States and China have quite different approaches to economic policy, and these differences reflect their divergent views on the proper role of government in the economy. While the United States lays its reliance on market-driven systems, China places a major focus on state intervention and planning to attain economic goals. There are substantial ramifications for economic results and national economic structures resulting from these policy differences. Outcomes: Comparing the United States and China through the perspective of macroeconomics reveals how their political economies have generated very different social and economic environments. The laissez-faire economic system in the United States has led to rising income inequality and a thriving economy. Despite having a high GDP per capita and being home to many prosperous enterprises and individuals, the country struggles with a sizable income gap (Guriev, 2022, p.780). Health care, education, and welfare are more unequally distributed in the United States than in other industrialized nations because of the country's less robust social safety net. Individual and regional economic fortunes vary widely, creating prosperous enclaves alongside those that struggle mightily. However, it is important to acknowledge that China's command and control system has successfully enabled a notable socio-economic transformation, leading to the improvement of a considerable number of people from destitute circumstances over the last several decades. The government has shown a proactive stance in the execution of initiatives designed to foster economic growth and development, with specific emphasis on expenditures in infrastructure and the advancement of industrialization. Despite China's notable achievements in economic growth, it continues to confront the challenge of income inequality. Over the past few decades, towns and manufacturing sectors have proliferated, creating differences between regions. Coastal areas have seen more economic growth than less developed inland regions (Guriev, 2022, p.780). Concerned about the differences found, the Chinese government has implemented stricter rules in order to improve social aid programs and make safety nets available to more people. The main goal of these programs is to reduce economic imbalance and figure out how to make medical care, schooling, and social support more accessible to everyone. In conclusion, the observed economic ramifications in the United States and China serve as evidence of the inherent trade-offs within their distinct political economy systems. The United States has a dynamic economy that exhibits both vibrancy and disparities, with a limited social security framework. On the other hand, China has made significant strides in addressing poverty while it still faces obstacles related to economic inequality and geographical disparities. The discrepancies that have been discovered provide evidence for the complex interaction between economic systems, political policies, and sociological structures within each country. Content 3 Pros and cons of the laissez-faire system in the United States and command and control system in China The command and control system that is used in ...