Question

What are the two major economic theories in Commanding Heights?

Answer 1

The Commanding Heights was written by Daniel Bergin and Joseph Stanislaw and is built on two key economic theories which are namely the forces of socialism and capitalism.

Every economy across the globe, can chose from the available three options in which it may run their economy. These are namely socialist, capitalist or mixed economies. While capitalist economies lay focus on the power of capital to be able to set in the forces of demand and supply, socialist countries on the other hand lay focus on the government controlling all resources.

The central problems for any economy are managing what to produce, in what quantity to produce and for whom to produce.

When the governments decide over how resources are to be distributed in any country, they promote socialism. Even though, these countries are very few in existence, the trade barriers remain high and the general public can choose only from a few available options in the market place.

Over the years, capitalist societies have increased which is the main focus of the book. It says that free market economics and allow consumerism is the key to development of the developed as well as the developing world. Reduction in tax rates and allowing for demand and supply to set in prices of goods and services is essential to development of any country.

The core conclusion which we can draw is the fact that two major techniques or economy forms exist and the later i.e. socialist economies are not good for markets nor do they help in growth in general.

Please feel free to ask your doubts in the comments section if any.