Comparison of Free Market Economy and Mixed Economy Systems - Essay Example

? Free Market Economics vs. Mixed Economy To What Extent Do You Agree With Free Market Economics Being More Effective Than a Mixed Economy? The contemporary world is different with the invention of modern communication and speedy travel. The worldwide market changes constantly and affects every individual. Rigors of several international businesses need a top-down understanding of culture and that of monetary systems. Excluding some economies such as North Korea, there are two different monetary systems, namely, the free market economy and the mixed economy. This explication espouses each system’s demerits and merits, and concludes with a statement of the better market economy of the two. A mixed economy permits parallel operation of private and public entities. The privatized businesses and the government share the control of monetary systems. The government takes control of the financial sectors that it determines significant to security and stability such as production of oil, manufacturing of vehicles and energy production. Such vary among most nations in the globe, which is a mixed economy. In a mixed economy, the government may allow privatization of industrial and manufacturing operations to a degree (Anderton, 2008). A mixed economy market confers various advantages. In presentation of the fundamental advantages, it is pertinent to address every merit with a demerit to acquire a clear perspective of the differences between a free economy market and a mixed economy market. Foremost, the control level that the ruling government holds within a mixed monetary system causes it to hold a chief role in service delivery. The private domain has a responsibility to aid in building infrastructure and offer services. This may elicit an increase in efficiency. Owing to this, a problem would come up if the government refutes to ascertain the type of infrastructure it requires from the private entities. Production may fail to keep on track with demand and supply of the population and create a surplus, or scarcity of merchandise and services, contributing to loss of profits (Anderton, 2008). Numerous mixed economies uphold progressive welfare structures to offer support to unemployed persons and offer quality medical care to the population. This can ensure that qualified medical care practitioners and welfare personnel receive prior training before employment. This ensures that the low earning bracket can access a minimal, equal level of up-to-standard medical care and treatment just like the high-income society members (Anderton, 2008). However, some officials may embezzle government funds while taking advantage of the welfare program. Medical practitioners may see an investment in their course of private practice. Some individuals may want a higher level of medical care than is available from the governing body and may lack freedom to choose. In some industries, the corporate sector experiences increased regulation resulting to decreased corporate greed. An adverse instance would be the Enron case that caused numerous workers to leave without proper retirement packages. This corporation, which the government controls, would control this greed, thus shielding the rights of people (Anderton, 2008). The modes of retirement in an entity that operates in a free market would yield promising returns for employee investments.. A corrupt administration can cut down retirement benefits into reserves of few. When entities facilitate businesses in a fixed economy, individual relationships may favor and push someone ahead when they cannot trace other methods. This holds a downside in business ethics in most mixed economy markets. USA citizens would find this issue debatable. Methods such as guanxi to fortify business initiatives, or business processes can result into bribery or corruption. A free market economy functions via voluntary exchange without control from a capitalist monetary system. A free market economy has numerous benefits to clients and businesses. Most demerits of any market economy lie within the issues of microeconomics, namely employment, laws, and wages. With this, this study espouses various matters in microeconomics (Anderton, 2008). In nations that have a free market monetary system, financial freedom promotes high living standards and high wages. Such economic freedoms, however, are never always the case for new nations assuming a free market-based monetary system. For instance, Poland has a homogenous structure owing to views of outstanding macroeconomic trends in the event of transformation of mixed monetary methods in the early nineteenth and twentieth century. Free market economies depict a low unemployment rate in comparison to that of the mixed economies (Anderton, 2008). In current times, unemployment is a rampant factor that causes companies to commute overseas to nations like China to seek affordable operating cost and decreased labor costs. This elicits an increased unemployment and a potential stressor for numerous of today’s market centered economies. Free market-centered economies administer the intellectual property rights to a high degree than that of mixed monetary systems like China. To conclude, such demerits, and advantages presented for every type of economy are transferrable. Apparently, a negative listing within a mixed monetary system can pose as a positive for a free market monetary system and conversely (Anderton, 2008). When learners studying international business, it is most pertinent to examine and understand such matter to a substantial extent. A question regarding the better of the two market economies would be intricate to answer. It would be difficult for numerous scholars and researchers in this field to answer such a query. The Western Europe exhibits a mixed economy where there exists an equal balance between state planning and free market planning is weak. The state decides on the correct extent of mixing in terms of business activity within both the private and the public sectors of the economy. In nations where the state plays a key economic role, social planning is excellent and wealth distribution is proportional (Anderton, 2008). In countries where the private domain holds the most pertinent role, social planning is low with meager services, goods, taxes decrease, and wealth distribution is quite unequal. Thus, from a personal viewpoint, a free market economy is better than a mixed economy, which ensures that there are no contrasting issues, which may affect the country’s economic market system. However, most countries have the mandate to select their market economies with regard to their economic statuses and plans. Bibliography Anderton, A. 2008. Economics (5th ed.), Pearson Education India, Noida, UP. Read More