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Hong Kong/India Command And Market Economies Essay, Research Paper

The world is run with economic systems. Two of these economic systems are the market economy and the

command economy. These economic systems both greatly differ and are similar in there ways of controling the

factors of production, ownership, and their incentives for efficient production.

An area of the world that has a command economy is India. The government controls and makes

decisions with the factors of production. The factors of production are the resources used to produce goods and

services, such as lonad, labor and capital. Within these socialist areas, there is no presence of motivation, a very

important factor in an economy. This is because no matter what they do for their economy, everyboyd will recieve

the same pay. For example, a doctor would get paid the same amount as a dishwasher. This creates unmotivation

because there is nowhere to progress to. People don’t want to work hard for the same pay as someone who

doesn’t. Also, since the government controls the factors of production, and not the individual consumers

themselves, it is impossible for the few in power to know the many needs, and conditions of resource availability,

within the whole economy. Therefore, many things of importance are not recognized, or over looked and the

economy and people suffer from the loss. It is present in these areas of socialism that many of the people suffer

from poverty because of this economic system.

Hong Kong used to be a command economy. Hong Kong was very poor. This poor area quickly changed

over the years into a very prosporous place. This is due to it’s change to the market economy. Hong Kong is also

the freest of economies. The United states of america also has a market economy. In a market economy, or free

enterprise economy, the individuals own the factors of productin, and make the decisions with them. This is

unlike the command econly becaues their government controls the factors of production. The market economy is

more effiecent because the individuals decide for themselves how to answer economic questions, looking out for

their own personal best interest. This creates motivation, in which the command economy lacks.

Entreprenurs also play a large roll in the economy. In Hong Kong, it is extremely easy to start your own

business. This helps the economy strive, opening up new ideas, and competition. Although it is more difficult to

be an entrueprenur in america, it is still fairly easy to open your own business and start your own line of work. In

indea on the other hand, you can also be an entreprenuer, but it is very difficult to do this because of it’s many

process one must go through with government, because of it’s command economy.

In conclusion it seems that the more free your economy is, the more easy it is to strive together to be

wealthy. The many differences between a command economy and a market economy is why india has such a hard

tome prospering. Although these economies do have their similarities, it is obvious that the difference over rule

them, and it is obvious what is the better economic system.


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