Communism And The Free Market System In China

1377 words - 6 pages

Capitalistic and communist economic systems have been in the forefront and have been popular and spoken about in recent times. In our world today, we have countries that are either pro capitalistic or procommunist. In this paper we are going to look at the ideas of Milton Friedman, Hernando Desoto, and MacGregor, whom all have different theories. We will take look at two countries, one being the United States, and the other being China. Currently both countries are competition to reach the number one spot in GDP and china has recently been making it to the number #1 spot. Both countries their on ideas of what is best for the people in both eliminating poverty and promoting jobs domestically, but although both countries have similar goals, the major differences lay in the ways the countries regulate economic policy. Would a free market system prevail in making the people well off, or would government institutions set to protect those and create a safety net be better off in boosting the well being of its citizens. Will China’s hybrid system succeed in maintaining the communist party’s dictatorship and rule; archive U.S. levels of wealth?

Milton Friedman was one of the main figures speaking about a market where there are no government restrictions. He believes that with ought any sort of regulations (Do Nothing policy) individuals would make themselves wealthier by following their own self-interests to better their selves. In his belief if there is some sort of regulation (taxes) on corporations or if the government offers to use the money to distribute it to the public; the end result would be poorer people. What Milton Freidman wanted was put no regulation on corporations, because with ought taxes the business would work in fulfilling their own self-interests and when that happens people in the less regulated country would have more money in their pockets.

DeSoto unlike Friedman argued that pre-conditions for wealth creations to occur in a market based system, there has to be institutions and laws set up. Desoto States the following “for better or for worse, people outside the West are fleeing self-sufficient and isolated societies in an effort to raise their standards of living by becoming interdependent in much larger markets” (De Soto, 70). Many countries lack the institutions to deal with tons of migration into urban areas as a result, “the fragmentation of their property arrangements and the unavailability of standard norms that allow assets and economic agents to interact and governments to rule by law” (De Soto, 76). It is clear that the poor want to merge into the the larger system. DeSoto looks into the US in his example of the west of the shift from a developing area to a developed. “more than 150 years ago, it (the U.S.) too was a third World country”. The United States though its history has experienced a large amount of migrations into the major cities. The countries should have institutions that deal with formal property...

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