Economics in an International Context Assignment

Economics in an International Context - Assignment Example gibe to Paul (2012), communism refers to the political and economical development model which was proposed by Karl Marx and later on back up by Lenin. The concept of the communism refers to the final part of the human historical development, where people are in charge of both the political as thoroughly as the economical system. In his book he also mentioned that according to Marxist theory, brass can be defined as an instrument of strain operation. Communism promises to provide each individual their needs despite of whatever class they belong to. correspond to Paul, command economy can also be referred as a planned economy. It can be defined as a specific economic system where the government has the power to control around or all the associated factors related to deed. It generally exists when government decides to use the central planning system to share resources and funds as well as determine the volume of output across the segments. (Paul, 2012, p. 15). 2. Advantage of intend/ Command Economy There are various favors associated with command economy. In command economies, the central government control what and how much of most products will be produced. By controlling as well as deciding the prices and wages the central government also able to control and monitor how much of the return is allotted to each household. concord to Katkoff (1961) The central government controls production and income in command economies. Due to this singularity of command economies, the price could not be resolved based on how much would be the production and how much peoples demand is, In command economies, the price of the product is to always outride stable. In most planned economies, prices are determined by the policy makers. Hence, one major advantage of implementing the planned economy is that it is helpful to eliminate the chances of inflation and price fluctuations which are the two main challenge s to the capitalistic free market economies. Another important advantage associated with planned economy is the planned use of manpower, as well as the highest rate of social development (katkoff, 1961, pp.371-372). 3. Disadvantages of Planned/ Command Economy According to Glisenberg (2001), a planned economy is with the character of satisfaction must. But, along with this advantage it also weakens the incentive as well as inspiration for the labor Because there is a rational system of condition for wants. Asa result it is nearly impossible to allow a workers dependents to experience the full consequences of his or her lack of faculty in production systems. The most recent example of this lack of employee motivation and responsibility situation was find in China but later on in 1980 the great economic reform in the country helped them to overcome the situation. During the command economy phase , allocation of goods was depending on the labor hours and individuals were not trust y for the penalty of their works. As a result , the labor efficiency was much lower in China. According to his review, another key disadvantage associated with this type of economies was there were very less chances of technological innovations because they were not propel to do so as there would be no obvious rewards for such good performance. The lack of competition also means that there are less efficient and innovative. As the main blueprint is non-profit so the mindset of improving as an aim as well as an employee also bring down drastically. Sometimes there are