Free Enterprise and Command Enterprise

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There are two major market systems exists in the world; one called free-enterprise and the other called command-enterprise.

Free Enterprise

Free enterprise means anybody or any industry can produce anything at any quantity by keeping them under legal terms. Legal terms here means the taxes and other government registration terms and conditions. The ruling class never going to interfere with the production of goods.  If I exaggerate it a little more, free enterprise means a country can have 100 dairy processing or textile companies irrespective of its demand could be fulfilled by 10 factories of each. Anyone can develop any type of production line anytime.

Free enterprise is commonly following industrial norms in the world and this system has nothing to do with the civic or state market demand. It is a system followed by capitalist states such as U.S.

Command Enterprise

It’s something very different and not so common in the world, that in command enterprise; the state controls the amount of production or factories in the reflection of market demand. The prime idea of this system is to keep an equilibrium between market demand and production. It controls excess production or lacking market demand.

Command enterprise looks very attractive in term of managing the state affairs, but in reality, this system always fails. None of the systems runs at the full capacity or reliability of system always falls short then the prediction.

It is a system followed by communist and socialist states such as North Korea, Cuba and China.


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