The need for planning emerges from the following weakness of the free ...
The free market can distribute resources according to consumer preferences; firms have an incentive to provide goods and services in demand. However, others argue that a free market creates many problems; notable inequality of distribution.
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The need for planning emerges from the following weakness of the free ...
Introduction:
The free market system is an economic system that operates based on the principles of supply and demand, without any interference from the government. It is also known as capitalism. However, this system has its weaknesses, which can lead to negative consequences for society. Hence, the need for planning emerges from the following weakness of the free market system.
Exploitation of workers:
In a free market system, businesses aim to maximize their profits by minimizing their costs, including labor costs. This can lead to the exploitation of workers, as businesses may pay them low wages, offer poor working conditions, and deny them basic rights such as healthcare and retirement benefits. Planning can help to ensure that workers are treated fairly and that their rights are protected.
Inequalities:
The free market system can also lead to economic inequalities, as some individuals and businesses may accumulate wealth and power at the expense of others. This can result in a concentration of wealth and power in the hands of a few, leading to social and political unrest. Planning can help to address these inequalities by redistributing wealth and power more equitably.
Instability:
Another weakness of the free market system is its tendency towards instability. Markets can be volatile, with prices fluctuating rapidly and unpredictably. This can lead to economic crises, such as recessions and depressions, which can have severe consequences for individuals and society as a whole. Planning can help to stabilize the economy by implementing policies that promote growth and stability.
Conclusion:
In conclusion, the free market system has its weaknesses, which can lead to negative consequences for society. Planning can help to address these weaknesses by ensuring that workers are treated fairly, inequalities are reduced, and the economy is stabilized. Therefore, the need for planning emerges from the following weakness of the free market system - exploitation of workers, inequalities, and instability.
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