What are the main advantages and disadvantages of both the pure command and pure market economic systems?

Evaluating Pure Command Economy vs . Pure Market Economy

Comparing the Advantages and Disadvantages

The economy represents an integral component in every society and individuals ' lives , the success to which the economy is organized and mitigated upon will largely impact on the kind of life that people in that society shall have . While the concept of pure command economy and pure market economy has been proposed in the literature , the attainment of pure market and pure command economies in reality has yet to exist However , pure command economy which were the basis of

the economic models of communist states such as Soviet Union in the earlier decades has yet to exist , it has important implications on the communist and socialist economic models . On the other hand , a pure market economy came closest to reality during 19th century England but is also yet to be realized . While this is the case , pure market economy and pure command economy both offers advantages and disadvantages to the economic system of the world and among countries . This essay provides an analysis on the advantages and disadvantages of pure command economy as well as pure market economy

Advantages and Disadvantages of Pure Market Economy

A pure market economy exists free from government regulations restrictions , taxes and laws that would govern labor , businesses enterprises and profits . The primary advantages of this system includes the following : 1 ) increased efficiency due to lowered cost of production 2 ) ownership of people on their labor and control of their lives 3 ) increased production 4 ) decreased unemployment 5 ) fairer distribution of wealth and 6 ) increased incentive for innovation and inventions . First , in a pure market economy , the private ownership of the resources and labor leads to an incentive for the individuals in the society to maximize their resources by allocating it efficiently as well as in determining the cost of their labor vis a vis the market . This occurs because every individual in the society is an entrepreneur who capitalizes on his labor and individual capability . The absence or elimination of government taxes and interests as well as the absence of regulatory laws on the individuals removes the barrier that most poor individuals and poor nations experiences from richer countries . The presentation of an equal opportunity to offer their labor thereby provides the incentive for the individuals to manage their rent resources and capabilities efficiently . In doing so , the individuals in the society attain the second advantage- the ownership of the individuals on their labor and hence , control of their lives . The alienation of labor that Marx has pointed out is eliminated because the individuals now own their labor . In essence , they are also taking control of their lives- they are no longer consumed by the need to produce in to meet their daily financial needs with salaries dictated by the market- which is oftentimes not enough . Hence , the ownership of labor and the lack of restriction would lead to the third advantage- the increase in production . Increase in production occurs...