Free Market Economy

RUSSIA: FREE MARKET ECONOMY AND COMMAND ECONOMY

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Free Market Economy and Command 

Economy 

Market economies and command economies occupy two polar extremes in the organization of economic activity. The primary differences lie in division of labor or factors of production and the mechanisms that determine prices. The activity in a market economy is unplanned; it is not organized by any central authority and is determined by the supply and demand of goods and services. Alternatively, a command economy is organized by government officials who also own and direct the factors of production. 

Multiple Select

NAME 3 CHARACTERISTICS OF MARKET ECONOMY.

• people are NOT free to create their own businesses

• There can be competition between businesses

• There can be many Entrepreneurs

• The system is present in the US, Canada and Russia

Market Economy - The "Free Enterprise System" 

The two fundamental aspects of market economies are that there is private ownership of the means of production and voluntary participation. Some characteristics of a Free Market are: 

a. People are free to create their own business

b. There can be competition between businesses.

c. There can be many Entrepreneurs

d. This system is present in the US, Canada, and Russia today

CONTINUED...

The most common title associated with a market economy is capitalism. Individuals and businesses own the resources and are free to exchange and contract with each other without control from government authority. The collective term for these uncoordinated exchanges is the "market." 

MARKET ECONOMY CONTINUED

Prices arise naturally in a market economy based on supply and demand. Consumer preferences and resource availability determine which goods are produced and in what quantity; the prices in a market economy act as signals to producers and consumers who use these price signals to help make decisions. Governments play a minor role in direction of economic activity. 

Fill in the Blanks

What are prices based on in a free market economy?

COMMAND ECONOMY

Under a command economy, governments own all of the factors of production such as land, capital, and resources, and government officials determine when, where, and how much is produced at any one time. This is also sometimes referred to as a "planned economy." The most famous contemporary example of a command economy was that of the former Soviet Union, which operated under a Communist system. 

Multiple Choice

Who owns all factors of a command economy.

• the people

• the state

• the KGB

• the Government

COMMAND ECONOMY CONT.

Since decision-making is centralized in a command economy, the government controls all of the supply and sets all of the demand. Prices cannot arise naturally like in a market economy, so prices in the economy must be set by government officials. 

CONTINUED....

In a command economy, governmental considerations determine who has access to economic resources. However, in a market economy, the profits and losses of individuals and businesses determine who has access to the economic resources. 

Russian Language 

Russian was the sole official language of the Russian Empire which existed until 1917. During the Soviet period, the policy toward the languages of the various other ethnic groups fluctuated in practice. The state helped develop alphabets and grammar for various languages across the country that had previously been lacking a written form. Though each of the constituent republics had its own official language, the unifying role and superior status was reserved for Russian. 

LANGUAGE CONT...

Russian lost its status in many of the new republics that arose following the 1991 dissolution of the Soviet Union. In Russia, however, the dominating status of the Russian language continued. Today, 97% of the public school students of Russia receive their education only or mostly in Russian, even though Russia is made up of approximately 80% ethnic Russians.

Open Ended

During the Soviet period in Russia, what was the superior and government supported language?

LANG. CONT...

Pretty much all of the ex-Soviet Union countries that surround Russia still have Russian as an official state or regional language. These include Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and some regions of Georgia and Ukraine. 

Religion of Russia

Historically, the predominant religion in Russia was Russian Orthodoxy, a type of Christian Church. After Russia became a communist state with the revolution of 1917, the militant atheism (atheism is the lack of belief in the existence of God) imposed by the government persecuted all religious beliefs. The communists destroyed thousands of churches (mostly Russian Orthodox). All but two Catholic parishes were liquidated, the buildings being destroyed or converted to other uses (e.g., archives, animal stables, libraries, museums—even museums of atheism). 

RELIGION CONTINUED

Some churches were allowed to stay open if they were licensed by the communist government, but they were very restricted in what they could do. They could celebrate liturgies and the sacraments, but they could not teach religion, either to children or to adults. The Orthodox Church became highly regulated by of the Soviet government, with all newly ordained priests and bishops becoming agents or cooperators of the Secret Police. 

CONTINUED....

All children were forced to learn and believe atheism as scientific truth in all levels of school and in all youth organizations. No private schools or clubs were allowed. The harsh religious persecution and the Stalin terror (1927-52) made parents afraid to tell their children about God. 

CONTINUED....

The Soviet Union collapsed in 1991, and the Communist Party was outlawed. 

Today, Russia is a multi-ethnic and multi-faith nation. Orthodox Christianity is Russia's largest religion with 75% of the population belonging to the Orthodox Christian denomination. Islam is professed by 5% of the population. Catholicism, Protestantism, Judaism and Buddhism are professed by 1% of the population each. Other religious denominations represent 1% of the population, while 8% consider themselves atheists.