Alternative Ways of Solving the Economic Problem:
Command versus the Market Pricing System
Question for Thought: What would be the economic significance of Mitt Romney’s election as President of the United States over Barack Obama?
- Heilbroner, The Making of Economic Society, Chapter 1
- The Wall Street Journal
- BBC4: The Story of Economics, especially Episode 2: Cogs
- Heilbroner, The Making of Economic Society, Chapters 2, 3, 11 & 14
- Friedman and Friedman, Free to Choose, Chapter 1, esp. pp. 1-15.
- “The Modern Adam Smith,“, The Economist, July 14-20, 1990, pp. 11-12
- Friedman, Capitalism & Freedom, Chapter 1
- R. A. Radford, “The Economic Organization of a P.O.W. Camp,” Economica, Vol. 12, 1945.
- Robert Heilbroner, The Worldly Philosophers, Chapter 3.
LEARNING OBJECTIVES FOR TOPIC 3:
- You should be able to explain what “resource allocation” means.
- You should be able to identify the similarities and differences between traditional, command and market economies.
- You should be able to explain the strengths and weaknesses of traditional, command and market economies.
- You should be able to explain why exchange (i.e. buying and selling) takes place.
- You should be able to explain the gains from exchange.