Free Trade V.S. Command Economy Essay

Two of the world’s most popular and diverse economic systems are Communism and Capitalism. Capitalism, or a free enterprise economy, is an economic system constructed by the freedoms of the marketplace. The capitalist economy has several promising advantages. The capitalist government subtly changes and adjusts to the current conditions with ease. A communist system can be defined as an economic system where many, if not all, factors of production are controlled and owned by the government.

In A Capitalist Manifesto, Gary Wolfram provides an explanation of how free market systems work in society and highlights their benefits compared to socialist economies. The first chapters of the book are an introduction to microeconomics: how marginal analysis, supply, demand, market equilibrium, opportunity cost, and profits work. According to him there are three fundamental advantages to a market economy: it allocates resources efficiently, consumers determine wages and therefore income distribution is fair, and finally it’s the only method of organizing society that is consistent with individual liberty. He explains that socialism is an economic system that is is unable to provide a decent standard of living for people and that it cannot survive, giving as an example the fall of the Iron Curtain. The reason is that

== == == == ==

== == == == ===

According to the Investopedia, ‘a free market system is a market economy based on supply and demand with little or no government control. It is a completely free market in which buyers and sellers are allowed to transact freely based on a mutual agreement on price without Government intervention in the form of taxes, subsidies or regulation’. Therefore, the free market system is good for Belize. Belize positively benefits from this system because it ensures competitive markets, the consumers are part of the decision making process, and the supply and demand create competition.

Capitalism and communism are polar opposites when it comes to how much the government is involved in a country’s economy. On the one side capitalism has very little to do with it and lets the people run it mostly by themselves. Communism is when the government owns everything and people work for them and are payed equally by the government. Capitalism and communism are the extremes and both have their up and downs. Capitalism allows us to make as much as we want and communism is supposed to make sure that everyone is payed and there is no poverty. This does not always happen for either one but there are things that government should do when it comes to the economy. In Naked Economics it says “One crucial role for government in a market economy is dealing with externalities—those cases in which individuals or firms engage in private behavior that has boarder social consequences” (56).

tariff classes, quite cleverly lettered A, B, C, and C+, to be reduced to zero

The North American Free Trade Agreement (NAFTA) is an agreement that lowers the trade restrictions between the neighbouring countries of the United States which include Canada and Mexico. It was signed by President George Bush on December 17th, 1992 and approved on November 20th, 1993 by the Congress and signed by President Clinton on December 8th, 1993. It came into effect on 1st January 1994 (Villarreal & Fergusson, 2015).

Free trade has been a part of the liberal prescription for international relations for a long time where it is often defined as the economic policy that allows imports from and exports to foreign jurisdictions. Unlike trading within nation, free trade allows buyers and sellers from separate economies to trade goods without the domestic government applying tariffs, quotas, subsidies or prohibitions on their goods and services. Therefore, free trade is often seen as desirable because it allows customers to get what they need with the lowest price along with the good quality, thus it promotes economic efficiency for both the nation and its citizen. Free trade is necessary and desirable due to the division of labor and the primary of the

The major difference between command economy and free market economy is the degree of government intervention and the reliance of market to determine prices (Cherunilam, 2009). Command market is the system in which the market is centrally controlled and regulated by the government; free market economy is the system demand and supply determine the market prices and regulations. However, mixed economy is a combination of Command and Free market economy (Bogolib, 2013); the market price is determined by demand and supply but the government intervenes to ensure stability and economic growth. This intervention has a major impact in the position of an economy in the business cycle. This report evaluates the advantages and disadvantages of England being a mixed economy, and shows how the government intervenes in the market.

The U.S. has a huge trade imbalance with most trading nations. The imbalance is not in agriculture, although many food products -- both raw and processed -- enter the U.S. at prices below those for comparable U.S.-grown foodstuffs. To a large degree the imbalance is in manufactured goods. One reason is that many nations have lower costs of production -- based upon a lower standard of living, cheap labor, inexpensive raw materials, protective government policy, etc. Multinationals who have moved their plants to foreign locations enjoy the best of both worlds -- inexpensive manufacturing costs and unlimited access to the world's biggest consumer market, the USA. Our laissez-faire trade stance, when

== == == == ==

Historically, Republican Presidents have often been considered to be wholeheartedly dedicated to the doctrine of free trade, with the common consensus being that “Republican Presidents have championed laissez faire foreign commerce since the end of the Second World War” (Batra, 1996, p1). Consequently the idea of protectionism under Republican governments has too often been reflexively denounced by US trade analysts.

Free trade is a system where the governments of two countries do not discriminate between the imports and exports of the other country. In particular, free trade in the modern sense applies to tariffs and other trade barriers, or the non-existence thereof. Ricardo described free trade in terms of absolute and comparative advantage. Usually, this concept is described using a simplistic, fictional world in which there are two countries and maybe only two goods. In this example, countries should produce the good in which they have comparative advantage, and in doing so the two countries combined with have a higher aggregate output than if only the country with absolute advantage produced everything. The reason is because there are tradeoffs in production, and if one country has absolute advantage in two goods and the other in zero goods, the productive country will not be able to meet total demand; thus the country without absolute advantage should produce the good in which it has comparative advantage (Formaimi, 2004).

Free Trade occurs when goods and services are traded between countries without the use of import controls. For most of the late twentieth century, the prevailing wisdom has been that free trade can lead to improvements in economic welfare in the global economy. However this has not prevented regular trade disputes between countries - often when one country feels that unfair trade practices have caused the benefits from trade to become distorted. Free trade is very important to all developed countries as there are likely to be economies of scale - when producing for larger markets (foreign markets), average costs of production will be lower. There is likely to be a wider choice