Free Market Economy Vs Command Economy

“[Without trade restrictions] the obvious and simple system of natural liberty establishes itself of its own accord. Every man...is left perfectly free to pursue his own interest in his own way.... The sovereign is completely discharged from a duty [for which] no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society” (Adam Smith Institute). In this quotation, the “Father of Economics,” Adam Smith, was speaking of the resulting environment created by a free market economy. Indeed, the free market economy will always be the most complementary to the desires of mankind. However, not only will man be

History proves this point solidly. As written by Kyle Smith of Forbes: “GDP under Reagan was turbocharged compared to the Obama years. The Reagan years brought annual real GDP growth of 3.5 percent -- 4.9 percent after the recession. In inflation-adjusted 2009 dollars, GDP jumped from 6.5 trillion at the end of 1980 to 8.61 trillion at the end of 1988. That's a 32 percent bump. As Peter Ferrara pointed out on Forbes, it was the equivalent of adding the West German economy to the U.S. one.” Reagan’s economic policy, dubbed “Reaganomics,” was staunchly free market. Undoubtedly, with his influence, the American economy flourished. On another note, some may object to the use of U.S. President Barack Obama’s administration to symbolize the command economy in this case, but evidence shows for itself the seeds of a command economy that were planted in his administration: massive, ineffectual federal bureaucracy, socialized medicine, and higher taxation of the affluent (Morrissey). While it was not a fully matured command economy, the foundation had been

Paramount to the success of a free society is choice—specifically, choice of labor, or as Adam Smith called it, division of labor. Smith strongly vied for the division of labor to provide the most efficiency to a business, and, as a result, provide wealth to all levels of society. Of this Smith states: “It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people” (Adam Smith Institute). Efficiency in the free market is also caused by competition. Competition in a free market economy allows employers to determine how their business will be run to increase income and production to their maximum potential. Likewise, consumers in a free market economy reserve the right to buy from any company they choose because competition creates a market replete with a variety of sellers (enotes). In a command economy, none of these factors are brought into play. In a command economy, employers are told what and how much to produce, and what to charge employees (Investopedia). Similarly, consumers have little choice in what they buy because competition is nonexistent, creating excessively high prices and little industrial progress (Investopedia). On competition, Smith declares: ”In general, if any