Economic System Essay Example | Topics and Well Written Essays - 1000 words

Economic System - Essay Example Free market economic system induces competition among different companies for there is no external evaluation. Presence of numerous competing companies brings great benefits to the consumers. Each company would strive to give their best as they would be thrown out of the market if found inferior. Free market permits full competition between companies. This would force companies to offer their best goods and services so that they will not be neglected by the consumers. Companies would compete in making better cheaper products in free market economies. Higher quality services and excellent products would fill the market because of competing companies. Free market also offers better freedom to consumers as they would be free to buy what they choose. Free market is therefore considered more effective than other economic systems. Mixed economy does not offer freedom and choice for consumers as well as companies. Restrictions, interferences and extreme control over business activities woul d discourage businesses. Excessive control would also make businesses incur more costs. Restrictions would limit certain companies with providing competitive products and services. This would make consumers deprived of numerous choices that they enjoy in a free market system. Mixed economy system is thus considered less efficient than free market system. ... If free market system is imposed, business would flourish, producing varieties of products. More people would continue to buy products and services as numerous varieties of products and services arrive in the market. As businesses grow and flourish more people would be hired for work. This would lessen the problem of unemployment in the society. If businesses flourish and expand the society would be freed of unemployment. This would stimulate the economy and brings an overall growth. In a mixed economy there would be heavy taxation and external interferences. Excessive taxation would affect the incentives and benefits directly. This would discourage people so that they would not work efficiently. Lack of incentives dishearten employees and make them deliver less work. This would affect companies and the products they offer. This hampers development in all sectors of the society. Mixed economic system is thus considered less efficient than a free market economy. In a free market econo mic system agreements are made faster compared to a mixed economy system. Interference from government would slow down the agreements in a mixed economy system. Governments are notoriously slow in making decisions and implementing it. Policy making takes its own time and delays all the subsequent activities. Government would make decisions and assign the work to the concerned departments. This allocation, decision-making and implementation lag and often shift towards a pending status. Allocation of resources and its disbursement also get delayed in a system where government is in control. In a free market economic system such delays and laggings are absent as there is no intervention or restriction from the