Question

According to narrators and interviewees in Commanding Heights the video, how are economic forces suppose to be used?

Answer 1

Commanding Heights was a famous novel, which was by Daniel Yergin and Joseph Stanislaw and it was finally developed into videos to display the same outlook.

It focuses on the two main categories of economies which exist across the globe. These are namely socialist and capitalist or market-based economies.

Socialist economies focus on government control on the market place. The government decides the quantity, quality and types of goods and services to be produced and directly control supply lines and develop their own methods of distribution networks within the country. Usually an economy which follows this model has high tax rates and consumer choices in the market place remain limited.

Capitalist societies on the other hand, focus on creating capital, and private control of business is encouraged with markets having numerous buyers and seller for different products or services. The consumer is the king in this market type and the forces of demand and supply help in setting the prices.

For example, if the consumers demand more of tea than coffee, tea would sell freely in such an economy and producers would prefer to manufacture tea and sell the same as they would earn higher profits.

The book as well as the videos, suggest that the economy should follow capitalist or market-based economies as it allows for higher returns for business owners, better choices for consumers and the government can focus on administrative and political considerations only. It says that this is a win situation for all and leads to higher efficiency and growth in any economy.

Most countries have also seen similar results when they shifted from socialist economies to capitalist economies and it is recommended to follow the same.

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