Comparison of market-based and state-based economies

S. A will be our case study. The hypothesis that this study aims to prove is whether Market-based economies perform better than state-controlled economies in the creation of wealth. In the real world, studies of the market and state-led economies are essential for nations to understand how and when they should intervene through measures such as protection on investments and trade, tax reforms, and legislation to ensure development is equal and fair. Additionally, the process of development is complicated; the research on the type of control is crucial for nations to understand motive and capabilities so that they can improve their economic development. S as a market controlled economy and Sweden as a state-controlled economy. Detailed Description Different diverse ways of running a political economy but the main ones are capitalism and socialism.

Capitalism or market-based control is a political economy in which distribution and production of goods are privately or corporately owned. In the book “The wealth of nations” (2010) Smith expounds that in a capitalists system the government does not meddle with the economy whatsoever, the economy runs smoothly and efficiently on the laws of demand and supply the laws to fulfill the needs of individuals (Smith 104). In a capitalist approach, buyers struggle in competition with other buyers while sellers compete with their fellow sellers. In simpler terms, Graham states that capitalism is disadvantageous in developing an economy because of its exploitative nature. Further, Graham believes that the capacity of capitalism to create monopolies is exploitative on the poor while taking advantage. In another study, Adler postulates that capitalism leads to adverse effects (Adler 223).

For instance, a market controlled economy is more likely to contribute to higher pollution effects, a distribution of income that lacks proportionality and higher rates of unemployment. Additionally, a market-led economy has seasonal cycles that oscillate between highs and lows. S, markets are competitive leading more efficiency since businesses counter fewer expenses to run thus leading to better economic performance. By extension, there is more economic freedom compared to Sweden where economic freedom is minimal. Else, those businesses that run in the U. S, which is a market controlled political economy have a large variety of goods since the market controlled encourage differentiation. Compared to Sweden the level of innovation and technology is high in the U. The market-controlled economies enjoy the freedom to choose, economic freedom and economic growth courtesy of Market control compared to the state-controlled political economies.