Question

Free Market driven societies reward individuals according to their output; Government or communist driven societies rewards people according to their needs. How might these different systems affect work effort? Which is more fair?

Answer 1

The work efforts under the free market economy are comparatively greater than the socialist economic structure. Under free market economy the median income will rise with respect to the increasing work effort. There is a free trade occurred between the nations by this increasing level of production through rising work effort. Free markets know the individual needs of the people than a government oriented economy. This will increase the productivity of the economy and also motivated for high rise in profit. Consumers get benefit through new innovations which having easily implementation in the free market. Workers and other employees considered as the economic agents to attain maximum profits. High level working strategies help to increase the matching between buyers and sellers.
On the other hand, socialist economies give more preference for society than individuals. This will increase the efficiency of market in terms of welfare. The working hours in this economic system were based on the preferences of worker rather than final decisions of the producers. Most of the economic activities were controlled by the government. There is an assurance of the authority on the income after the retirement of the workers. This tries to increase the welfare in the economy. Most of the welfare motive employees tried to do their jobs in this kind of sectors. There is also a high level insurance over the life of every worker. There is a substance level of work efforts created under socialist economic system. The workers having more confidences about their rewards and insurance regarding the works and also the efforts behind their works.