Free Market, Planned Economies
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In the last few decades, planned economies around the world have succumbed to the challenge of the free market. Before analyzing why this has happened, we must understand the economic distinction between a free market economy and a planned economy. The free market, on the one hand, sings the siren song of self-regulation. If you allow companies to operate on their own, free market advocates maintain, unhindered competition will yield the highest level of efficiency while keeping prices at the optimal place. In the economists' parlance, companies will set their prices where marginal cost equals marginal revenue. Free markets, however, break down when it comes to producing public goods, or goods that are indivisible and unexcludable (McConnell and Bruce 81-82). The most traditional example is that of a lighthouse. A lighthouse is beneficial for society, or economically justified, if its costs are less than its benefits. However, because it benefits all ships that pass by it, it is impossible to exclude a ship from using it and thus impossible to set and enforce a price on its use. Because the public good of the lig
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Some common words found in the essay are:
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Approximate Word count = 760
Approximate Pages = 3 (250 words per page)
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