Question

what are the main differences between the way decisions are made in politics and the way decisions are made in free markets? What are the pros and cons of each decision-making framework, and which system do you think is optimal?

Answer 1

The decisions making in politics is based on creation of wealth and ownership of capital and government controls production and pricing; while decisions making in free markets is focused on the exchange of products and services, or wealth. In free markets the basic economic decisions about the resources allocation is determined by supply and demand, without any political intervention and any outside forces intervention.

Advantages of decisions making by free markets:

--As free market economies are very competitive thus leads to efficiency

-- Free markets results to innovations due to competition

-- It often results to higher economic growth compared to command economy

-- It is powered by the customers

Advantages of decisions making by politics:

--There are low levels of inequality

-- The primary motive is to can tailor goods and services to benefit the common good without regard to profits and losses

-- There is less unemployment

In my opinion the free economy is better because the forces which regulate the economy in an approach that maximizes economic efficiency and benefits the most people.