International Trade: Market vs. Mixed Economy

Introduction

International trade is doing business between different countries. It involves a country either importing or exporting goods or services from another country. This helps a lot in economic growth as well as creating investment avenues internationally. However, many countries have different views on international trade (Gallagher & Zarsky, 2007).

This paper will be about international trade by debating on the benefits and drawbacks of both market and mixed economies on the discussion board, proponent’s arguments, and answering arguments made against my position.

A market economy is a type of economy where the actual cost or price of goods and services is determined by the changes in the rates of demand and supply of goods and services. On the other hand, mixed economies are a market where both the state and the private sector have direct control over the economic activities of that particular state or country.

Mixed economies come with some advantages as well as drawbacks. Some of its advantages include: There is the involvement of both the free market and other forces that are used to regulate the working of the economy. Some people argue that the economy is at its best when both forces are working together and this can be illustrated by the working of the economies of some of the world economic powerhouses like the United States.

The government also can offer advice to investors on the best business decisions which can also be accompanied by the support which may include financial support when the investor faces hard financial times.

The fact that mixed economies allow for free private participation and production means that there is room for healthy competition which in turn increases the profits levels. The little government involvement also provides a sense of security which helps maintain a stable economy.

However, these kinds of economies face some drawbacks. One of which may be the fact that the business owners have to individually look for their markets; this can be demanding especially when we put the willingness of the consumer to buy (Whale, 2008).

Looking at market economies, some of its advantages are: Capital market is characterized by working hard and patience which about the levels of hard work, it’s easier for the owner to better his or her life and that of the immediate family. This also depends on the person’s levels of innovativeness. There is also a wider variety for the consumers to choose from which increases the buying power of the consumer which increases the amount of revenue resulting in the growth of the economy in general (Feenstra, 2004).

Market economies like the free markets have some drawbacks too. These may include its inability to cater to all the basic needs of the consumers. Since people in a society cannot be equal, putting into consideration people with disabilities such as sickness and mental problems. These markets have proven their inability to fully take into consideration their needs and wants. Putting all these into consideration, we can conclude that mixed economies are the best suited for world business (Harrigan, 2004).

Questions to my opponent

Can the opposing side explain in-depth how the government has taken into consideration the issue of people with disabilities in society in the case of the market economies? The point about patience, for how long, should one be patient and what are the drawbacks of being patient and impatient?

The argument made against my position

The issue about taxation, does it not impact negatively on businesses in the case of mixed economies? Taxation results in an increase in the income of the government, these, therefore, imply that the government has the capital to take care of the basic needs of its citizens and also improve on its infrastructure. Infrastructure improvements mean an increase in production levels resulting in the maximization of economic growth (Howse & Trebilcock, 2005).

References

Feenstra, R. C. (2004). Advanced International Trade: Theory and Evidence. New Jersey: Princeton University Press.

Gallagher, K., & Zarsky, L. (2007). The Enclave Economy: Foreign Investment and Sustainable Development. Massachusets: Massachusetts Institute of Technology.

Harrigan, J. (2004). Handbook of International Trade. Oxford: Blackwell Publishing.

Howse, R., & Trebilcock, M. (2005). The regulation of International Trade. New York: Routledge Press.

Whale, P. B. (2008). International trade. London: Frank Cass and Company Limited.