CTA PHASE I THESIS STATEMENT Rough DRAFT

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2023

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Economics

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Apr 3, 2024

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CTA PHASE I THESIS STATEMENT Thesis statement: The economics of a centrally planned economy and a free market are fundamentally different, with distinct approaches to property rights, incentives and entrepreneurship, supply and demand curves, and prices and quantities demanded/supplied. While centrally planned economies prioritize collective ownership and centralized control, free markets prioritize private ownership and decentralized decision-making. This paper will explore and compare these key differences, highlighting the advantages and disadvantages of each system. References: 1. Property rights: Alchian, A. A., & Demsetz, H. (1973). The property rights paradigm. The Journal of Economic History, 33(1), 16-27. 2. Incentives and entrepreneurship: Baumol, W. J. (1993). Entrepreneurship, management, and the structure of payoffs. MIT Press. 3. Supply and Demand curves: Mankiw, N. G. (2014). Principles of microeconomics. Cengage Learning. 4. Prices and quantities demanded/supplied: Samuelson, P. A., & Nordhaus, W. D. (2010). Economics. McGraw-Hill. OUTLINE I. Introduction a. Introduce the thesis statement b. Briefly discuss the history and evolution of centrally planned and free market economies c. Preview the main ideas of the paper II. Property Rights and Ownership a. Define property rights and ownership in centrally planned and free market economies b. Compare and contrast property rights and ownership in the two systems c. Analyze the impact of property rights and ownership on economic outcomes III. Incentives and Entrepreneurship a. Define incentives and entrepreneurship in centrally planned and free market economies b. Compare and contrast incentives and entrepreneurship in the two systems c. Analyze the impact of incentives and entrepreneurship on economic outcomes IV. Supply and Demand Curves a. Define supply and demand curves in centrally planned and free market economies b. Compare and contrast supply and demand curves in the two systems c. Analyze the impact of supply and demand curves on economic outcomes
V. Prices and Quantities Demanded/Supplied a. Define prices and quantities demanded/supplied in centrally planned and free market economies b. Compare and contrast prices and quantities demanded/supplied in the two systems c. Analyze the impact of prices and quantities demanded/supplied on economic outcomes VI. Benefits and Disadvantages of Centrally Planned and Free Market Economies a. Identify and discuss the benefits of centrally planned economies b. Identify and discuss the disadvantages of centrally planned economies c. Identify and discuss the benefits of free market economies d. Identify and discuss the disadvantages of free market economi VII. Conclusion a. Restate the thesis statement b. Summarize the main ideas of the paper c. Discuss the implications of the analysis for economic policy and future research PARAGRAPH I Property rights and ownership are fundamental to economic systems and play a significant role in determining economic outcomes. In a centrally planned economy, property rights are typically collective and owned by the state, while in a free market economy, private property rights are recognized and protected by law. According to Alchian and Demsetz (1973), property rights refer to the legal rights to use, control, and dispose of resources, including land, capital, and labor. In a centrally planned economy, the government owns the means of production, and individuals have little to no control over resources. In contrast, in a free market economy, individuals have the right to own and use resources and can exchange them through voluntary transactions in markets. The differences in property rights and ownership between the two systems have significant implications for economic outcomes. In a centrally planned economy, collective ownership can lead to inefficiencies due to the lack of incentives to invest and innovate. Without the ability to own property and benefit from the fruits of their labor, individuals may have little motivation to work hard and innovate. This lack of incentives can result in a lack of productivity and growth. In contrast, private property rights in a free market economy provide individuals with incentives to invest, innovate and create wealth. Individuals have the right to profit from their own labor, which motivates them to work hard and innovate. This results in greater productivity and growth in the long run. In conclusion, property rights and ownership are fundamental to economic systems and have a significant impact on economic outcomes. The differences in property rights and ownership between centrally planned and
free market economies are a critical factor in explaining the relative success of these systems. Private property rights in a free market economy provide individuals with incentives to invest, innovate and create wealth, leading to greater productivity and growth. In contrast, collective ownership in a centrally planned economy can lead to inefficiencies and a lack of incentives to invest and innovate. PARAGRAPH II Incentives and entrepreneurship are crucial for economic growth and development. In a centrally planned economy, incentives are typically limited, and entrepreneurship is often discouraged. The state owns and controls the means of production, which limits the opportunities for individuals to create new businesses and innovate. In contrast, a free market economy offers a range of incentives for entrepreneurship, including the potential for profit, which motivates individuals to start businesses and innovate. According to Baumol (1993), entrepreneurship refers to the ability to create and develop new products, processes, and ideas in order to create wealth. In a free market economy, individuals have the freedom to start and operate their own businesses and innovate. This creates a competitive environment where businesses are motivated to improve their products and services to attract customers. In a centrally planned economy, however, the state controls production, and entrepreneurship is often discouraged. This lack of incentives for entrepreneurship can lead to a lack of innovation and economic growth. Incentives are another critical factor that can impact economic outcomes in both systems. In a centrally planned economy, incentives are typically limited, and individuals have little motivation to work hard or innovate. The state provides basic goods and services, and there is often little room for individuals to improve their economic outcomes. In contrast, a free market economy offers a range of incentives for individuals to work hard and innovate, including the potential for profit and upward mobility. In conclusion, incentives and entrepreneurship are critical for economic growth and development. In a centrally planned economy, incentives are limited, and entrepreneurship is often discouraged, leading to a lack of innovation and growth. In contrast, a free market economy offers a range of incentives for entrepreneurship and hard work, which can lead to innovation, growth, and increased prosperity.
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