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International Management (Questions) - Essay Example

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A consensus has developed among economists and observers of the global economic landscape about the principle that countries with the most economic freedom experience the highest rates of economic growth (331). There is no question that the incredible growth that has…
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International Management (Questions)
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International Management (Questions)

Download file to see previous pages... The importance of the free market system to capitalism is its ability to generate growth and innovation. This is demonstrated in an important consequence of the free market system, which is globalization. The more a state is open to the model, to economic freedom in their respective markets, the more economic prosperity is generated. Free market economies provide the most conducive environment for foreign investment and trade. In addition to this, states with free market tend to be less corrupt than an authoritarian state mainly because they are more politically free, having a democratic system that is characterized by civil and legal ways for resolving conflicts Keagley 332). Indeed, in the analysis of the experiences of state-controlled economies, there is the prominence of political economic repression characterized by the stifling of civil liberties and the violation of individual human rights.
The beauty of the free market model is illustrated in the case of China. Through the years, China has implemented economic reforms that saw its economy shift from a heavy-handed control of the central government towards the free market system, greatly contributing to its rapid economic growth. The Chinese economic reform underwent three stages – building an economic system with the planned economy as the main body and a limited introduction of market adjustment in 1980; implementing the planned commercial economy in 1984; and establishing the socialist market economy in 1993 (Monson and Duval 2005, 78). What is apparent here is that for a communist country, the economic reform initiative was leading towards an open and liberal economy. China today is further pursuing the continuing decentralization of management, privatization of ownership and the marketization of resource distribution.
There are, however, economic scholars that would ...Download file to see next pagesRead More
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