(Eh, I don't intend on making this post too long, especially since I don't care much for discussing about economics, but to the right you can see a graph relating the wealth of nations relative to each other. I also have an Economics exam in 2 hours :/ Go figure, eh?)All of us know the basic economic principles of supply and demand. We demand certain goods and services as long as they are affordable and we are willing to pay for them, and in response - in theory - suppliers will produce the right amount of goods and services to meet our needs. This is what the Scottish philosopher Adam Smith defended; during his age and era, governments were still interfering with the structure of the market, but Smith retaliated with a resounding "Laissez faire" message. His overall concept of a free market economy was that the demands and supplies of the market would be optimized and at equilibrium. I won't say too much more - since I have to study!?! - but clearly, according to this world map and to common knowledge - there are still plenty in poverty. Some arguers state that the free market system is/was not a ideal form of economy, but the exact opposite. What do you all think?
I'd like to note that Adam Smith also believed that the goods and services that were best and offered at the cheapest rates received the richest rewards. This idea supports America's growth towards super centers such as Wall Mart, Etc. Smith's free enterprise ideals were the catalyst for Marxist thinking.
ReplyDeleteWhat about the inequality in the market system? Do you think a Marxist approach would be better at eradicating the problems that free markets tend to ignore? I like the idea of the "Laissez faire" approach in our everyday civil liberties, but I do think that government intervention should be limited in economics, which is perhaps why America has a mixed economy.
ReplyDeleteBut the very nature of a mixed economy implies that the subject take from both sides of the economic spectrum- Capitalism and Socialism. In the ideal sense, both are absolutely perfect. It's when we come to establish nations that there is an issue. Plans that work perfectly on paper rarely transfer to the real world in such a way. In pure socialism, people inevitably give up their rights to the government (That's when the shift from democratic to authoritarian happens- IE, Democratic Socialists voting themselves into Communists). In pure capitalism, the worker is inexcusably taken advantage of by the elite, and poverty runs rampant. So the logical conclusion is compromise- a little from each side. Enter the mixed economy. I'd say that right now, we have about a 80% Capitalist, 20% Socialist economy- the profit motive is important, and the final decision maker when making moves, but we don't approve of the sweatshop model, and we strive to help those we deem unable to help themselves, not just lazy. But what of an inverted mixed economy? 80% Socialist, 20% Capitalist? Where we still buy things, but never does anyone need to worry of not having food. Elective items can be bought with credits, but the basic needs of survival will be met with by the state- and after all, isn't the government just a tool for the betterment of the people as Hobbes says? Only when we're willing to experiment will we find what really works. Who's to say what's better for society- a business man or woman's work ethic, or the heart of a humanitarian?
ReplyDeleteI believe every type of economy looks good on paper, but adding the human element to any of these changes the desirable effect. Some (like Capitalism and Socialism) work better over a longer period of time, but eventually an economic system is going to collapse.
ReplyDeleteJoe is completely right. Any concept can sound good on paper. But in reality many of them will have unforseen flaws due to mankind's way of messing things up. Any economic system will eventually be ruined by someone or some group who tried to find a loophole, tried to "make improvements", or whatever. There are countless ways for the collapse of one of these systems to occur. Government intervention will not necessarily help matters either. It can often make things worse.
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