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Article review on two types of economy- Free market and Command
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Article review on two types of the economy- Free market and Command
The article about the free market economy has been written to understand the after-effect of the end of the free market. The researcher has focused on comparing the winner of the war that exists between large corporations and states within the free market economy (Bremmer, 2010). The researchers have focused on secondary sources to identify the practices of the government. Background research shows that the authoritarian governments are completely embraced the entire capitalist system because the sole motto of the government is to maximize the economy. Maximizing profits and promotion of political goals in order to achieve political dominance has been the motivating factor. However, crisis related to the global capitalist system led to severe unmanageable issues. The global economic crisis challenged the concept of free-market capitalism. The emergence of state capitalism occurred and this in turn, challenged the free market capitalism. The authoritarian leaders now have an alternative and the emerging challenges within the economic system can be handled using state capitalism. In order to sustain under the influence of state capitalism, free markets need to use smart regulation tactics and practice free trade in a pure manner as it continues to preach. It is evident from the research that policy-makers did not embrace state capitalism as a means of recovering from recession because it is only chosen when a long-term policy is to be chosen. Moreover, the state capitalists view markets as merely a tool for serving nation-based interests. Hence, in this system, markets are used to leveraging the economic and political interests of the state capitalists only. After the Great Recession, 2008, the demand for a “better government” emerged. At this instance, free markets emerged to face the challenge, and the durability of free market will depend on the believers of free market.
The research article on command economy aims to examine the possibilities of the system on a global scale. The researchers at first pointed out that globalization post-Cold War era have changed the entire world economic system. Globalization has undoubtedly created a decentralized system and further gave rise to liberalization. However, the researcher argued that at international levels, globalization has led to the creation of a regimented centralized economy. The rise of the new “global command economy” is the subject of discussion of this article. The centre of gravity of power has shifted and therefore, the entire political and economic system has shifted as well. At first, the researcher attempted to point out the concept of geopolitical economy and the complexity of interaction between the world and the state economies. Following that, the researcher has stated that global institutions exercise “command” and it is similar to the system of regimentation. Centralization of power exists as well. Comparison has been drawn between the practices that were prevalent during the Cold War era. At that time, economies were controlled by a centralized power and a planned system was prevalent as well. Thirdly, the author focused on the practices prevalent in the new “global command economy”. The development of partnership at a global level and the development of multilateral institutions in developed and developing nations is the result of the global command system. In this article, the author pointed out the significance of non-market forces, which are often neglected. The non-market forces have continued to shape the world economy as well as the entire trajectory of the global market. The rise of private enterprises or the laissez-faire economy led to the development of the world economy. A slow transition from command economy to mixed or free market has already been witnessed before.
References
Bremmer, I. (2010). Article Commentary: The End of the Free Market: Who wins the war between States and Corporations?. European View, 9(2), 249-252.
Ould-Mey, M. (1999). The new global command economy. Environment and Planning D: Society and Space, 17(2), 155-180.