In command economy, it is easier for a central authority to focus on an exporting industry to develop, but it is not so easy to select which industry because the future is uncertain. North Korea is also a good example of that. They failed on choosing one, so they have advanced missiles and war technologies but they are still one of the least developed countries. Furthermore they have nothing except the technology. Only a better technology is not enough for the development of economy. They need people who can lead their development on the right direction.
On the other hand, if there is a person who comprehends the international market and leads the country, command economy is able to develop faster because they fund capital only for a strategic industry and take advantage there. In Japan, people borrowed funds from the international market, invested on a second industry and have developed the country. Moreover, if a government could lead economic controlling energy prices and encourage companies managing business to be more economy before price-system re-act on the increase of demand, their companies could adopted in the high petrol price better, or the government could stabilize the energy price. A central authority would support domestic industries in the international market well.
In market economy, a government can work less to lead their country. That means they cannot concentrate their capital on a strategic industry, and tend to develop slower. In contrast, market economy tends to encourage ordinary people to invest to make a profit or lose. Every person has their own favorite, so they are likely to invest on different industries that they prefer. This behavior would diversify their economic system, and they would catch up with any changes in the global economy. Principally, when the demand and supply price-system does not work as prediction of innovation.
If people want more bread, the increase on demand will raise the price of bread and the higher price would tell firms to supply more. On the other hand, new technology or products doses not have their price system. Then it does not appear on a price system a substitute even though it will affect and change the structures of industry. For example, both of USSR and U.S. had developed satellite technology, but only U.S. also used it for private broadcasting, and developed international mass media. That shows that a market economy culture tends to find out potential demand more and catch up with reorganizing of industry structure, than command economies do.
The concentrating of investments maximizes a result; profits or losses. In South East Asia, many countries have a strategy of development on increasing their exporting, so they are inclined to borrow funds from international investors who are expecting a high return from the currency trade easily. However, no country can keep importing goods from them, and once they face a decline in exporting they cannot borrow in a local currency, and if they are likely to import more they have to face a higher interest rate of their national security and weakened local currency. In that case, they have difficulty with funding. Even though global trading is going to increase productivity and wealth in the world, it does not solve a problem of poverty. In United States, people do business without border and it is the richest country, but the division between rich and poor is increasing. That means international free trade is not an answer that solves the problem of poverty on earth.
Consequently, unless a developing country has to import daily commodities they should close their border to save money domestically. When they prepare investments inside their country they do not have to lay on a risky loan. Then, when their economy does not depend on global trading, they do not have to care about international relations, and they have more opportunities in international politics. Moreover, the later they start they can pass more steps of development, and the domestic industry is able to have time to improve its technology. In a market of commodities that require high technology such as the airplane industry or the construction of nuclear power plants, few companies are competing. So, if the developing country can join there, they can sustain their development with less competition.
Where a central authority can concentrate their investment on an industry, its technology will develop much faster. However, in North Korea, people developed advanced missile technology, but it does not help their economic development.
People look at economic development with political and technological development, and they say Japan take advantages of better technology and United State develop with market economy. They are also talking that developing countries cannot grow up because they do not have money to encourage their development. However, China has developed their country on the way they are changing the form of economy, and USSR could not exist with advanced technologies. Then, every advanced county has started their development when they were not. Moreover, American computing companies are looking for workers in India, one of developed country.
I do not know what people at least need to develop their economy. I do not think that development must require technological or fiscal advantages, or special political condition. Economy can develop even in poor country or in command economy, if there is a person who can lead it. Furthermore I do not know whether people need developed economy to have happier lives or not.
On the other hand, if there is a person who comprehends the international market and leads the country, command economy is able to develop faster because they fund capital only for a strategic industry and take advantage there. In Japan, people borrowed funds from the international market, invested on a second industry and have developed the country. Moreover, if a government could lead economic controlling energy prices and encourage companies managing business to be more economy before price-system re-act on the increase of demand, their companies could adopted in the high petrol price better, or the government could stabilize the energy price. A central authority would support domestic industries in the international market well.
In market economy, a government can work less to lead their country. That means they cannot concentrate their capital on a strategic industry, and tend to develop slower. In contrast, market economy tends to encourage ordinary people to invest to make a profit or lose. Every person has their own favorite, so they are likely to invest on different industries that they prefer. This behavior would diversify their economic system, and they would catch up with any changes in the global economy. Principally, when the demand and supply price-system does not work as prediction of innovation.
If people want more bread, the increase on demand will raise the price of bread and the higher price would tell firms to supply more. On the other hand, new technology or products doses not have their price system. Then it does not appear on a price system a substitute even though it will affect and change the structures of industry. For example, both of USSR and U.S. had developed satellite technology, but only U.S. also used it for private broadcasting, and developed international mass media. That shows that a market economy culture tends to find out potential demand more and catch up with reorganizing of industry structure, than command economies do.
The concentrating of investments maximizes a result; profits or losses. In South East Asia, many countries have a strategy of development on increasing their exporting, so they are inclined to borrow funds from international investors who are expecting a high return from the currency trade easily. However, no country can keep importing goods from them, and once they face a decline in exporting they cannot borrow in a local currency, and if they are likely to import more they have to face a higher interest rate of their national security and weakened local currency. In that case, they have difficulty with funding. Even though global trading is going to increase productivity and wealth in the world, it does not solve a problem of poverty. In United States, people do business without border and it is the richest country, but the division between rich and poor is increasing. That means international free trade is not an answer that solves the problem of poverty on earth.
Consequently, unless a developing country has to import daily commodities they should close their border to save money domestically. When they prepare investments inside their country they do not have to lay on a risky loan. Then, when their economy does not depend on global trading, they do not have to care about international relations, and they have more opportunities in international politics. Moreover, the later they start they can pass more steps of development, and the domestic industry is able to have time to improve its technology. In a market of commodities that require high technology such as the airplane industry or the construction of nuclear power plants, few companies are competing. So, if the developing country can join there, they can sustain their development with less competition.
Where a central authority can concentrate their investment on an industry, its technology will develop much faster. However, in North Korea, people developed advanced missile technology, but it does not help their economic development.
People look at economic development with political and technological development, and they say Japan take advantages of better technology and United State develop with market economy. They are also talking that developing countries cannot grow up because they do not have money to encourage their development. However, China has developed their country on the way they are changing the form of economy, and USSR could not exist with advanced technologies. Then, every advanced county has started their development when they were not. Moreover, American computing companies are looking for workers in India, one of developed country.
I do not know what people at least need to develop their economy. I do not think that development must require technological or fiscal advantages, or special political condition. Economy can develop even in poor country or in command economy, if there is a person who can lead it. Furthermore I do not know whether people need developed economy to have happier lives or not.