Question

compare and contrast the command and capitalist economic systems

Answer 1

1):-Capitalism

Capitalism is an economic system in which capital assets are privately owned and goods and services are produced for profit in a market

command economy

an economy that is planned and contrilled by a central administration

Capitialism / command economy

The main difference between Capitalism and Command economy is that capitalism involved private enterprises where businesses are owned by private individuals while comman economies have public enterprises where the governemnt controls things including businesses and production. A command economy is much more government controlled while a capitalism (or market economy) has much less government intervention.

A command economy is where the govt. Allocates resources according to a planning process.

The advantages are : 1. The govt. Will ensure a more equal distribution of income and wealth

2. Essential goods/services will be provided to the community. For e.g

education.

3. The govt. Can determine which goods are produced. It has the power

of decision making.

4. It provides a minimum standard of living for all citizens.

The disadavantages are : 1. There is little consumer choice. Since everything is allocated according to a planning process, consumers will have little say in what is provided directly by the state.

2. Little variety of goods and services

3. Loss of individual freedom

4. Leads to allocative and productive inefficiency due to a lack of competition and no profit motive.

5. Subsidies on essential goods and services quickly lead to shortages. Therefore queuing is common in command economies.

"the rich get rich, and the poor get poorer" The advantages of capitalism are the government has limited control over business, which lets business compete. Capitalism lets people choose what kind of work they want to do and where they want to work. Capitalism lets people decide what they want to do with their money if they want to put it into a retirement account or in the stock market. But the disadvantages of Capitalism are barriers between people in terms of how much wealth they have or how much money they make. Another disadvantage of Capitalism is that government control is so limited that it lets a few businesses to dominate their industry and then they become able to make the rules for their industry.

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